New Delhi, 6 September (CommoditiesControl) — Maize prices have remained steady today as the market adopts a wait-and-watch approach, holding a hand-to-mouth stance in anticipation of new kharif arrivals expected in the third week of September.
Current prices reflect stability across various regions. In Bihar, maize prices traded within the range of INR 2500-2550 per quintal, while in Uttar Pradesh, prices held steady at INR 2500 per quintal. Bihar rake delivery prices for Tamil Nadu were stable at INR 2900 per quintal. Karnataka's consumption markets saw steady prices ranging from INR 2750 to INR 2800 per quintal. Imported maize at Tuticorin traded at INR 2850 per quintal, and prices in Pune and Sangli markets remained steady at INR 2900-2950 per quintal. The Jalgaon market also saw consistent prices at INR 2800 per quintal.
The maize market is gearing up for a significant increase in ethanol demand for the upcoming marketing season. To meet its 20% ethanol blending target, India is projected to need over 10 billion liters of ethanol, double the volume produced in the marketing year ending October 2023. This year alone, approximately 3.5 million tons of corn have been utilized to produce 1.35 billion liters of ethanol, a dramatic fourfold increase from the previous year. Although sugarcane will start contributing more in the next season, its contribution is capped at 5 billion liters due to the government’s priority on fulfilling domestic sugar consumption. Consequently, the production of corn-based ethanol is expected to rise to 3 billion liters, necessitating nearly 8 million tons of corn, potentially achievable only through increased imports.
India’s demand has driven corn prices in Myanmar up to approximately USD 300 per MT (FOB) from USD 270, incentivizing local farmers to increase planting. India has imported around 7.75 lakh tons of corn through August 2024.
Given the anticipated ethanol demand, a significant decline in kharif maize prices seems unlikely even with expected bumper arrivals. Warehouse prices currently quoted around INR 2800-2850 may not drop below INR 2300-2400 despite peak arrivals. It is still too early to predict the full extent of maize price fluctuations, as many traders and processors are likely to be active in sourcing maize from Ukraine and Burma this year. India has permitted the import of 5 lakh tons of corn at a concessional duty of 15% under the TRQ scheme.
According to the USDA, India’s corn consumption is forecasted to reach a record 37.5 million tons for the marketing year 2023-24 (Nov-Oct). This rise is driven by recent changes in the government’s ethanol policy and the expansion of the poultry sector. The country’s corn exports have diminished significantly, while imports have increased to meet the growing domestic demand.
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