New Delhi, July 01 (CommoditiesControl): The Indian government has authorized the import of around 500,000 tons of maize at a reduced import duty of 15% through a tariff rate quota. This import will be facilitated by NAFED and the state cooperative marketing federation. However, the reduced duty faces uncertainty due to a pending court case challenging a similar notification from 2020.
In the Bihar maize market, prices have remained steady to firm at INR 2,350-2,380 per quintal. Sellers are reluctant to sell at lower rates, despite the concessional import duty. South zone buyers, particularly in Tamil Nadu, continue to be active, purchasing Bihar maize at around INR 27,000 per ton for rake delivery.
As of now, approximately 60-65% of Bihar maize has been delivered out of the state, with 15-20% held in stocks and another 15-20% remaining with farmers and in fields. Heavy rains in Uttar Pradesh (UP) have damaged the quality of maize, leading to increased demand for good-quality maize.
In Uttar Pradesh, prices in Etah and Kasganj mandis have increased by INR 800-1,000 per ton last week, reaching INR 21,600-21,700 per ton. Rake buyers are currently purchasing maize at INR 22,800-23,000 per ton. Active buying is also reported from Gujarat and Maharashtra. In Gujarat, poultry trades are being conducted at INR 25,500-25,600 per ton, while in Maharashtra, prices are at INR 27,000 per ton in Nasik and INR 27,500 per ton in Pune for UP maize.
Starch producers are not significantly active in purchasing maize due to their imports from Ukraine. Domestic poultry buyers are actively seeking maize due to uncertainties about the quality of future supplies, with rains impacting the quality in both Bihar and UP. Ethanol buyers are also active, purchasing maize at INR 23,300-23,500 per ton, and are expected to remain so until prices reach INR 25,000 per ton.
Most buyers from UP are hesitant to sell at current rates, and there is a reported shortage of trucks. Freight for Pune is around INR 4,000 per ton, with spot UP maize quoted at INR 22,500 per ton, leading to delivery prices of approximately INR 27,500 per ton.
Globally, prices have softened by 7-8% from recent highs, influenced by Turkey's import ban and a slight improvement in Russian and Australian crop forecasts. Ukrainian corn production is expected to be 27.6 million tons, down from 31 million tons last year, with exports anticipated to decrease. Major importers of Ukrainian grain include Spain, Egypt, and China.
In the domestic market, despite some pressure on maize prices, a significant supply-demand mismatch remains. Indian poultry demand for maize is projected to increase by around 1 million tons, with ethanol producers' demand reaching 4.5 to 5 million tons for the 2023-24 season. Although imports from Myanmar and Ukraine are expected to be limited to about 1 million tons, the overall supply-demand mismatch is likely to persist.
With the possibility of the government increasing the imported quantity at concessional duty if prices rise significantly, maize prices in Bihar are expected to remain steady in the near term but may rise in the medium term as new Kharif supplies become available from October.
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