July 5, 2012

India's corn prices may continue to rise next year on poor rains

As poor rainfall affect the sowing across major states like Karnataka Andhra Pradesh and Maharashtra and rising demand from the poultry sector, India's corn prices is likely to increase further in 2012-13.

Delayed rains has slow down the sowing process of all major kharif crops across India and the country is likely to experience the production drop. Farmers are also likely to move to other crops like coarse cereals and soy if the present weather scenario continues. But according to reports corn sowing till June 27 was 8.211 lakh hectares in the country against 16.56 lakh hectares at the same time last year. In addition to it the rising demand from Indian Poultry Industry as soy and corn are the major food for the chickens. Indian Poultry Industry is booming which is emerging as the world's second largest market and is growing at the phenomenal rate of 12-15% every year.

Similarly the prevailing dry weather conditions in US and rising demand from China has also raised the price of the commodity globally. India is expected to produce around 22 million tonnes of corn for 2011-12. In Chicago Board of Trade (CBOT) corn for July delivery traded at US$7.18 6/8 per bushel on July 3. And in India's National Commodity and derivatives Exchange (NCDEX) the commodity for July delivery traded up 0.47% to INR1,270 (US$23)per quintal on July 4.