June 23, 2008

Correction expected in Indian corn prices

Indian commodity analysts said that the corn market could see a correction this week due to a possible ban on corn futures.

The analysts said that a rally in corn prices, nearing INR1,000 a quintal, may not sustain and the market has to come down.

On Saturday (June 21), the near-month contract saw a weakening trend with market closing at INR958 against the previous week's close of INR971.

Record inflation, pressure from poultry industry to curb exports and expected government intervention can cushion the rising prices, observers said.

A decline of around INR15-20 a quintal is expected in the coming week before the market stabilises.

India forecasts to produce around 16 million tonnes this season, slightly higher than the local consumption.

Robust corn exports through private players have resulted in low supply flow in the domestic industries such as poultry.

Since, inflation is ruling at a 13-year high and a ban on corn export is anticipated.

US$1 = INR42.98 as of June 23, 2008