December 20, 2012

India's corn prices rise by 12% on high demand

As demand for Indian corn spurts in export market, corn prices have risen by around 12% to around INR1,500 (US$27.4) per quintal from INR1,350 (US$25) last month.

The demand for Indian corn is on rise in global markets as supply from Brazil has slowed down temporarily due to port congestion. "Prices in India are likely to remain high till Indian corn stays in demand on the international front", said Raju Choksi, vice-president (commodities), Anil Nutrients Ltd.

Choksi added that deficit rainfall has impacted acreage and yield this year, which will affect supply. "Prices are likely to remain high, unless Rabi output offsets some of the loss in production in Kharif season to support domestic demand till next year," he said.

According to the first advance estimates for 2012-13, kharif corn area this season stood at 73.68 lakh hectares compared to 73.88 lakh hectares last year. Kharif corn production is pegged at 14.8 million tonnes, down 8% from the previous year. Corn is sown in both Kharif and Rabi seasons; with the Kharif season output comprising 75% of the total production.