February 1, 2013

India's Karnataka's corn prices are trading 29.52% higher at INR1,360 (US$25.5) a quintal compared to last year.

"Due to large scale corporate demand, prices have firmed up in the last one month. Demand is mainly from starch manufacturers and poultry feed makers," B.V. Gopal Reddy, Vice-President, Karnataka Corn Merchants' Association, said.

The major companies sourcing corn for starch extraction from Karnataka are Riddhi Siddhi and few Ahmedabad-based factories. Along with starch makers, poultry feed makers such as Sugana and Venkateshwara Hatcheries are also buying.

According to Reddy, "At present, factory delivery which includes transportation and APMC cess is quoted much higher than the procurement (buying from farmers) price of INR1,450-1,470 (US$27.2-27.6)."

Due to late rains in Karnataka, the corn crop harvested is fairly good. Crop grown in Davengere, Haveri and Shimoga have entered the market.

"Summer corn crop from Tamil Nadu and Andhra Pradesh is expected to enter market sometime in February/March. Till then prices are expected to be firm," Reddy said.

According to the Domestic and Export Market Intelligence Cell (Demic)-Dharwad, Karnataka has 3.44 lakh hectares under corn and the productivity is estimated at 2,869 kilogrammes/hectare.

Corn price in Bidar market is ruling at INR1,385 (US$26). The Minimum Support Price (MSP) announced by the Central Government is INR1,175 (US$22) a quintal.

Keeping in view the market price movements, Demic in its advisory to farmers has said, "Farmers can store corn up to April to get a margin of around INR100-150 (US$1.88-2.82) a quintal compared to February and March prices."