January 17, 2008

India corn prices on uptrend amidst increased corn acreage

Corn prices are still increasing in India amidst efforts to expand land allotted for corn.

Currently, prices for corn have reached INR8,000 (US$204) in Bangalore and are expected to climb further.

A Karnataka Hatcheries Association (KHA) member said that they are worried on the rapid increases in soymeal prices which add extreme pressure to input costs.

A recent report from India's National Commodities and Derivative Exchange (NCDEX), which also quoted statistics from the Union agriculture ministry, stated that rabi acreage under corn stood at 9.5 lakh hectares (as of January 4) compared to 8.1 lakh hectares in January 2007 indicating a 16.9-percent rise.

Only Tamil Nadu has reported a decline in acreage in this rabi season. NCDEX delivery for January 2008 was reported at INR7,790 (US$198) based on a report from the US Grain Council-India.

Trade analysts explained that a rise in acreage does not necessarily translate to higher output as there could be cases of lower productivity in some of the key corn growing areas in the country.

Industry players have requested for an immediate ban on export of corn which is sold to neighbouring countries like Sri Lanka.