Maize is likely to turn cheaper in the domestic market over the next three-four weeks following a good output, but strong demand from the poultry sector will check a steep decline in prices, analysts said.
Prices of maize in spot market at commodity bourse NCDEX fell to Rs 698.65 per quintal today from Rs 704.65 on Tuesday.
Analysts said an expected output rise of more than 14 per cent is hurting the prices of the commodity.
“The bearish movement in prices of maize is likely to continue for the next three-four weeks,” Harish G, an analyst with commodity brokerage firm Karvy Comtrade, said.
“However, prices have not slumped in a big way because of the higher demand from poultry feed makers and starch firms, which are increasingly buying maize due to lower price.”
According to the government’s first advance estimate for 2007-08, the production of Kharif maize is expected to touch a new record of 13.07 million tons against 11.43 million tons in the year-ago period. Harvesting is going on in some major growing states such as Karnataka, Andhra Pradesh and Bihar.
Unlike other commodities, domestic maize prices do not have much co-relation with those in the overseas markets, where the commodity is seeing downward pressure.
While the spot price on National Commodity and Derivatives Exchange fell marginally today, the December contract is trading at Rs 756 per quintal. Maize prices in Bangalore are quoting lowest at Rs 655 per quintal, while they are hovering around Rs 780-800 per quintal in Khanna (Punjab).
“Poultry feed manufacturers are switching over to maize because it is cheaper compared to soyabean, which is Rs 1,800 per quintal,” Religare Commodities analyst Abhay Lakhwa said.