Maize starch buyers are watching the trend before switching over to tapioca starch on the back of falling tapioca prices in the recent months.
Maize prices have increased by 10-15% in the past one year because of surging demand for the commodity from poultry industry while tapioca starch price declined by a whopping 30% in the past eight months.
According to an analyst from Karvy Comtrade, spot price of maize is currently pegged at Rs 1,125 a quintal at Nizamabad in Andhra Pradesh. The rise in maize prices has pushed starch to over Rs 1,000 per 50-kg mark. Around 65-kg starch can be grinded from 100 kg of maize.
Maize starch is mainly used as raw material for industrial purposes. Industries like textiles, paper, adhesives, confectioneries, dyes and chemicals, pharmaceuticals and corrugated boxes use maize starch as a raw material.
Due to fall in tapioca prices, manufacturers are expected to start buying tapioca starch in place of maize starch, said J Manjunath, member of Sago Serve, the only government-run exchange to trade tapioca products. Currently, price of tapioca starch has declined to Rs 2,100 90-kg bag from Rs 3,200 in January, he said.
Although, price of tapioca starch is almost same as maize starch, traders are stocking tapioca starch on hopes of a rise in maize prices sometime in the coming months, said Rajasekar, a leading tapioca merchant from Salem in Tamil Nadu.
A report released by Karvy Comtrade said that fresh arrivals of maize crop is likely to be delayed this year due to late sowing. The report further added that maize production is expected to touch 20 million tonne this year on higher acreage and improve yield.
Price of the commodity is expected to go up in the coming months over fears of crop damage in Karnataka, one of the major producer of maize in India.
