Mumbai, June 28 (CommoditiesControl): Despite the government's decision to allow maize imports at a concessional duty of 15%, Bihar maize prices remained steady across major centers in India today. Sellers were reluctant to sell at lower rates, supporting prices amid declining arrivals and consistent domestic buying.
In Gulabbagh, prices were quoted steady to slightly firm at INR 2300-2400 today. Market sentiments were further supported by an uptrend in prices in Uttar Pradesh and strong buying interest from buyers in the South. Kasganj mandi saw prices increase by INR 20 to INR 2160-2170, with arrivals decreasing to 1000 tons due to rains. In Pune, prices traded steady to marginally bullish at INR 2650-2680 per quintal. South buyers in Tamil Nadu remained active for Bihar maize, offering around INR 2650 per quintal for rake delivery.
India has permitted the import of 500,000 tons of maize at a concessional duty of 15%. Despite slight pressure on maize price sentiments, no significant downside was observed due to a significant supply-demand mismatch.
Indian poultry demand for maize is expected to increase by around 1 million tons compared to last year, while demand from ethanol producers is projected to reach 4 to 4.5 million tons in the ESY 2023-24. The increase in ethanol consumption is likely to be offset by reduced exports of 3 million tons. However, reduced Kharif production of 1.5-2 million tons and lower yields in Rabi maize are major factors creating a supply-demand mismatch this year.
While imports from Myanmar and Ukraine were already underway, they are unlikely to exceed 1 million tons. The additional 500,000 tons permitted for import would only arrive after 40-50 days, maintaining the supply-demand mismatch.
Ukraine's maize stock position also appears constrained. Research firm SovEcon estimates Ukrainian corn exports at 22 million metric tons (MMT), 23% below the previous year. Ukrainian exports are expected to decrease in the new season due to a significant reduction in supply, with production estimated at 27.6 million tons, down from 31 million tons last year. This decrease is attributed to reduced corn planting areas and lower yields for both corn and wheat. Carryover stocks for 2023/24 are expected to decrease to 1.5 MMT, down from 4.2 million tons last year.
Spain, Egypt, and China are among the largest importers of Ukrainian grain. In the past 11 months, Spain received 5.3 million tons of corn, Egypt received 3.5 million tons, and China imported 4.6 million tons. Lower Ukrainian grain export potential, coupled with expected smaller Russian supplies, could support the global grain market.
Given the current scenario, Bihar maize and Uttar Pradesh prices are likely to remain steady in the near term. However, prices may rise in the medium term as new Kharif supplies will only be available in India from October.
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