Maize demand high, but mandi prices rule below minimum support price

By: |
August 09, 2021 6:30 AM

The government in 2019-20 had allowed import of 5 lakh tonne of maize (non-genetically-modified) at 15% concessional duty against normal import duty of 60% through Nafed and MMTC.

According to official data, the crop area under maize was 3% lower at 8.1 lakh hectare while that of soyabean was about 6% higher at nearly 44.5 lakh hectare.

Even as demand for maize in states like Maharashtra, Karnataka and Tamil Nadu is robust amid poultry feed prices shooting up on record increase in soyabean rates, farmers in Uttar Pradesh and Punjab continue to sell the lentil at below minimum support price of Rs 1,850/quintal.

However, this has not deterred farmers from sowing maize in the ongoing kharif season and area coverage under the coarse cereal has seen a surge in many states.

The average mandi price for maize in July was Rs 1,571 per quintal and arrival was 1.66 lakh tonne in Uttar Pradesh and in Punjab rate was Rs 1,345 and arrival was 18,019 tonne, according to Agmarknet portal. On the other hand, per quintal average mandi rates were Rs 1,830, Rs 1,860, Rs 1,880 in Maharashtra, Karnataka and Tamil Nadu, respectively, where arrivals were very low. Though these three states are also major producers, the demand is quite high as many of the poultry units are located there.

The total area under the crop crossed the season’s normal 74.68 lakh hectare, as of August 6 and was also up by 3% from year-ago, according to agriculture ministry data. The acreage in Madhya Pradesh, Karnataka and Gujarat was higher by 3-16% from their respective year ago level. In Telangana, the area coverage so far was more than three times of previous year.

But in Maharashtra, the acreage was lagging behind this year, largely due to a shift to soyabean crop.

According to official data, the crop area under maize was 3% lower at 8.1 lakh hectare while that of soyabean was about 6% higher at nearly 44.5 lakh hectare.

In Rajasthan, the third biggest producer of kharif maize, the sowing deficit narrowed down to 10% as of August 6 from 17% as of July 30 as it is a good alternative in low rainfall areas.

However, farmers may continue to shift to soyabean after rainfall improved during past week and very little time left to sow maize. Hybrid varieties of maize are of 80-100 days duration and field needs to be cleared before mid-November for rabi crops. Rajasthan had 10% below normal rain until July 31, but an upturn in precipitation after that led to the state having 12% above normal until August 6, since June 1.

“Many farmers in Rajasthan have shifted to soyabean from maize due to higher prices of oilseeds. Since some other states have higher acreage, there is no concern for kharif maize. The rabi season crop is also likely to be good after a good monsoon that will leave sufficient moisture,” said Sain Dass, president of Maize Technology Association of India.

Bihar is a major producer of maize in winter season where the average yield is 10-13 tonne per hectare, more than double of 5.5 tonne all-India productivity. On the other hand, kharif maize’s average yield is 2.6 tonne per hectare (2020-21 estimate), which Dass said is not a correct estimate of productivity. The government has raised MSP by 1% to Rs 1,870/quintal for 2021-22.

“Low yield maize-soyabean production system must be changed to biotech-led productivity enhancement, which has been adopted by maize-soyabean exporting countries,” said Bhagirath Choudhary, director of South Asia Biotechnology Centre. He sought government intervention in expediting process of efficient weed management and insect resistant and herbicide tolerant Bt/HT maize to tackle yield loss due to invasive pest fall armyworm,” Choudhary said.

Soyabean at Indore, Madhya Pradesh crossed Rs 10,000 a quintal on July 31, up by over 40% in a month. Average mandi price in the state was Rs 4,192 in January. Maximum arrival of soyabean, a kharif crop, takes place during October-January. In poultry feed, share of maize is 65-80% while 5% vitamin/mineral and remaining are de-oiled cake (DOC) obtained after extraction of oil out of soyabean.

A consistent policy incentive on maize, similar to the procurement policy on paddy and wheat, will improve maize acreage and farmers will not shift to any other crop, Dass said. India used to be maize surplus a few years back, but had to allow import in 2019-20 due to demand from poultry industry after feed prices shoot up.

The government in 2019-20 had allowed import of 5 lakh tonne of maize (non-genetically-modified) at 15% concessional duty against normal import duty of 60% through Nafed and MMTC.

Prior to this, India had allowed import of 2,25,000 tonne of maize at zero duty in 2016. The import was approved to influence the market sentiments amid price rise, as exports also continued in those years, Dass said. The kharif maize production in 2019-20 was at par with previous year while in 2020-21, it improved by 8% to 20.95 million tonne.

Maize export from India jumped over more than four times to 27.27 lakh tonne in 2007-08, on-year and reached record 47.88 lakh tonne in 2012-13, before started falling. As 28.79 lakh tonne (worth $ 635 million or Rs 4,676 crore) of maize shipped out in 2020-21, experts said the momentum seemed to have returned.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Spices Board to hold special e-auction for cardamom on Sunday
2Diesel price hiked, no change in petrol rate
3Gold prices may fall further next week, MCX silver at fresh low of 2021; here’s what charts say