December 12, 2006

Corn shortage in India causes panic in the industry

A steep rise in maize prices in India has hit the poultry industry hard due to crop failure in several parts of the country and traders hoarding of the crop.

Maize prices have risen nearly 40 percent from Rs550 (US$12.3) a quintal last year to Rs 740 (US$16.5) a quintal this year.

This meant a rise in chicken and egg prices in the near future, experts said. At this rate, India's poultry market is in danger of running out of maize by April next year, six months from the next crop in October.

According to Karnataka State Warehousing Corporation General Manager G H Ramesh, the maize crop failure in the USA and to some extent in India, has led to a mad scramble for corn in the market with the result that the future of egg prices is now in the hands of traders and MNCs.

Corn crop losses are estimated at 15 percent this year. Members of the National Egg Co-Ordination Committee blamed the shortage on forward-trading.

Multinational companies have cornered huge quantities of maize and are withholding the grain from the market, said Bangalore Zone Chairman B R Sainath.

Moreover, the prices of de-oiled soya cakes, used as fodder for poultry, have also risen almost 30 percent, after soy export demand went up.

Calls have been made for the government to ban corn exports until the situation stablilises.