Maize Price Outlook Turning Positive; Good Opportunity for Farmers

Maize markets are gradually stabilizing and recovering from the record low levels observed till first half of this year. Prices are still running lower when compared to the last few years due to the impact on its demand from the poultry industry. The pandemic had badly impacted the demand for poultry and poultry products and therefore, the poultry feed industry. As more than 55% of total maize production in India is consumed by the poultry feed industry, subdued poultry markets had pressured maize prices till last few months. 

But the business climate is improving now. Chicken and egg consumption in the country has started rising significantly, and as viewed by feed companies and trade bodies, consumption of these products is likely to reach at least 70 percent of the pre-COVID level in the current quarter. Due to the weak demand from poultry or animal feed industry, the maize processing firms reduce their operational capacity to 40-45% till second quarter. But July/August onwards as poultry and feed demand started improving these firms have increased their capacity and presently operating at 80-85% of their net capacity. The recent forecast reports of the US Department of Agriculture (USDA) stated that the domestic feed consumption in India is expected to return to normal levels in 2020–21. With lockdown restrictions easing month on month, and restaurants and hotels being permitted to open by next week, further improvement in poultry demand in the forthcoming year is likely from the food service and hotel industries. Meanwhile the Online Food delivery business has already picked up in last few weeks.  

Poultry Industry experiencing healthy Demand Situation

Lot of poultry growers were forced to stop operations during first half of 2020 when demand crashed after the epidemic began but consumer demand has started picking up from July/August and it will gain pace after the Navratras, and with the onset of winters. Farmers have started getting a much better price for chicken now due to pick up in the All India sales. Fresh export deals have been materialized for transportation to Bangladesh in recent weeks and already few rakes have been loaded for deliveries.  

Due to increasing consumer confidence regarding poultry consumption, more number of people have started dining out in those areas, where hotels and restaurants have started functioning. Sources say that consumption of chicken has reached 57 percent to 60 percent of the pre-COVID time there is higher possibility of consumption to reach over 70 percent in the next quarter.  Egg consumption has increased in last two months, and is clearly reflected in price levels, which are higher than June end levels presently.  

Price Outlook Turns Positive – Good opportunity for Maize Growers

Prices for Rabi crops in major producing state of Bihar were fluctuating between Rs 1150-1275/quintal (Gulabbagh Maize prices) between April and August. Currently, the prices are averaging near Rs.1425/qtl i.e. nearly Rs.200 up on a quintal in approximately two months. The Kharif maize prices in Sangli market remains stable as compared with August month despite increasing harvested arrivals, which clearly implies increasing demand for maize. Average prices were around Rs.1450 during August and currently they remain near this level. The industry is coming back and poultry farms which were shut down in April- May are again starting operations. Similarly a crate of 30 eggs is currently being sold at Rs 140 which is a 75 percent increase, when compared with the bottom prices seen during March and April. Ex-farm prices in eggs and chicken can further increase by 25-30 percent over September prices, in next 2-3 months as per poultry industry persons. Therefore price outlook in near to medium term has turned positive for maize, and our growers have a good earning opportunity in holding their crop for few months and sell at the right time. As understood from trade talks maize markets can appreciate by Rs.200-250/qtl in next 2-3 months therefore farmers should hold most of their harvest till December or January in order to maximize their earnings.