May 4, 2007

 

India corn prices down on arrivals, low demand

 

 

Low demand from starch and poultry sectors as well as continued influx of summer crop have dragged down both spot and futures prices of corn in India, traders said. 

 

Mohanbhai Vedant of Nizamabad Corn Products Pvt. Ltd. Told all major markets have been receiving good arrivals but there is no demand from the processing industry.

 

He said traders have also enough stock for the next few months which would make purchases unnecessary.

 

On Thursday, the May contract on the National Commodity and Derivatives Exchange fell by 1.52 percent to 715 rupees per 100 kilogramme (kg), down more than 7 percent since last month.

 

Contracts for June have also fallen by nearly the same margin. Spot prices, too, have moved in tandem. In Nizamabad spot market, prices fell by 58 rupees to 650 rupees per 100 kg.

 

Satish Chowdhary, a Sangli-based trader said the arrivals have continued since last month which gave traders enough stock and "nobody is in a hurry to buy". 

 

A trader from Jalna said prices may decline by 20 to 30 rupees per 100 kg in the next few weeks but will recover from mid-June when arrivals stop.

 

Corn prices are ruling around 650 to 750 rupees per 100 kg in India's major spot markets, from around 570 rupees a year ago.

 

Corn output in the year to September 2007 is forecast at 12.75 million tonnes while demand is pegged at 14 million tonnes.

 

The government has allowed duty-free imports of corn until end-2007 to cover up for a projected shortage.

 

However, traders said imports will not solve the problem as imported corn prices are much higher than domestic prices.