Maize-Feed / Industrial Grade - Commodities Info

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General Characteristics

• Maize (Corn), is of American origin, and after wheat and rice, it is the most important cereal grain in the world.
• It provides nutrition to both humans (33.3%) and animals (66.6 %).
• Serves as basic raw material for the production of starch, oil and protein, alcoholic beverages, food sweeteners and more recently fuel.
• Special crops grown primarily for food include sweet corn and popcorn, although dent, starchy or floury and flint maize are also widely used as food. Flint maize is also used as feed. Immature ordinary corn on the cob either boiled or roasted is widely consumed.

Global Scenario

• World corn production in the year 2003 was 614.3 million tons while in year 2004 total world corn production is expected to be 642.6 million tons.
• Major producing countries are United States, China, EU-25, Brazil, Mexico, Argentina and India. These countries accounts for around 80 % of total world corn production.
• Major consuming nations of corn are China and USA.
• There has been continuous increase in the consumption demand of corn mainly owing to increase in the demand from meat and starch sector. There is growing requirement of maize from poultry sector, which uses corn as feed.
• Major importing nations of maize are Japan, Korea, Taiwan, Mexico, Egypt, Malaysia, EU and Colombia.
• Among the major exporters of corn, USA stands first followed by Argentina and Brazil. China, South Africa, Ukraine are minor exporters, their share is very low. Only USA dominates the international trade of corn as an exporter.

Indian Scenario

• India's maize production fluctuates between 10-14 million tons, with 80-90% of the production being in the kharif season.
• Major states that contribute in Maize productions are Karnataka, Andhra Pradesh, Bihar, Punjab, Uttar Pradesh and Madhya Pradesh.
• Around 6.5 million tons (roughly 50 % of total consumption) goes for feed use, primarily for poultry feed. Another 1 million tons of corn is used by the starch industry.
• India is traditionally a maize importer, and Govt. permits a fixed quantity (determined each year) to be imported at 15%. Extra has to be imported at 50%.
• However, in 2003-04, India exported around 3-5 lakh tons of maize, mainly to Southeast Asian countries.
• Rising household incomes have shifted human consumption from maize to other cereals like rice and wheat. The rising incomes have also led to an increased consumption of meat, particularly of poultry, which has increased the demand for maize as feed.

Factors that Affects Rice/Wheat/Maize Prices

• Role of weather in crop production is immense. Temperature, rainfall and soil moisture are the important parameters that determine the crop condition. Further, natural calamities like typhoon, floods, droughts and earthquake can also affect crops. Markets keep watch of these developments.
• Changes in the minimum support prices (MSP) by the government also have immense impact on the prices of the commodity.
• Availability of substitute products at cheaper rate may lead to weakness in demand. This situation happens especially when the main products price tends to become higher. For e.g., jowar/ bajra may be preferred by poultry feed manufacturers instead of maize, if its prices are high.
• Seasonal cycles are present in agriculture crops, particularly in short duration annual crops. Price tends to be lower as harvesting progresses and produce starts coming into the market. At the time of sowing and before harvesting price tends to rise in view of tight supply situation.
• Breakthrough in the technology may increase the productivity and would lead to more supply. This may bring some softness in the price.

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