November 29, 2007

Indian corn prices decline after positive yields

India's corn is estimated to turn cheaper in the local market over the next three to four weeks following a good harvest.

However, poultry feed sector's strong demand for corn could offset the plummeting of prices.

Prices of corn in spot market fell to US$17.65 per quintal on Wednesday from US$17.80 on Tuesday. 

Analysts expect an output rise of more than 14 percent will hurt the prices of the commodity.

The Indian government's advance estimate for 2007-08 was for Kharif corn to touch a new record of 13.07 million tonnes against 11.43 million tonnes from last year.

Harvest is still ongoing in some major growing states such as Karnataka, Andhra Pradesh and Bihar.

While the spot price on National Commodity and Derivatives Exchange fell marginally today, the December contract is trading at US$19.10 per quintal.

Corn prices in Bangalore are quoting lowest at US$16.55 per quintal, while it is around US$19.70-US$20.21 per quintal in Khanna (Punjab).

Poultry feed manufacturers are switching to corn since it is cheaper than soy, Religare Commodities analyst Abhay Lakhwa said.