High demand, low stock stoke grain prices

New Delhi: Lower stock of maize, bajra and broken rice and higher demand of wheat and soya bean have increased the prices of these commodities in recent weeks. Maize is up almost 25 per cent in a month while broken rice and wheat have gained 8 per cent in the past two months in the spot market. Grains prices also have an impact on both poultry and cattle feed. Higher prices of the grains prompted dairies to increase the price of milk both for consumers and farmers who sell it.

“There is shortage of maize, bajra and broken rice, which we expect will continue till the new crop is harvested in October-November. We can expect an increase in chicken prices by August-September if the trend continues,” said Ramesh Chandra Khatri, president of Poultry Federation of India. Chicken is selling at Rs 200 a kg in retail while farmers are getting Rs 60-75 a kg, he said. Maize prices has increased by almost 25 per cent within one month to Rs 22 per kg, wheat and broken rice by 8 per cent to Rs 20 per kg and Rs 22 a kg in the past two months, bajra by 10 per cent in last two months to Rs 21 and soya bean de-oiled cake by 5 per cent to Rs 33 a kg in the spot market, said Khatri. According to the industry, the ripple effect of shortage of maize, mainly because of drought, pest attacks and significant reduction in cultivable areas last year across Maharashtra and Karnataka, continues. “Last year, production was 2.5 million tonnes less than the annual requirement of 23 million tonnes. This has led to firm prices of maize and simultaneously boosted demand and price of other grains used is the feed sector,” said Prerana Desai, head of research at Edelweiss Agri Services and Credit.

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The government move to permit import of 4,00,000 tonne of feed grade maize at a concessional import duty of 15 per cent early this month and of over 1,00,000 tonne in June under advance licensing system has also not helped in easing down the prices, said analysts. “Compared to the requirement, the import of maize is very less and we have to see how many contracts are signed. The next crop will come in October-November and till then prices are bound to remain firm,” said Desai.