Commodity News

Subdued Poultry Demand Pressures Maize Markets - Near Term Price View Downwards

Abhijeet Banerjee
Abhijeet Banerjee

Maize markets are reeling under subdued demand situation currently. Prices since month of April have fallen by nearly 100 rupees on a quintal. Maize mostly goes for consumption in poultry feed industry – nearly 55% of the production is generally absorbed by this industry. With COVID outbreak problems demand for poultry has reduced and rumors about poultry products can be one of the carriers of Corona virus, has created all the more problems for poultry product consumption. As a result quantity required for manufacturing feed rations has dropped significantly, leading to lower intake of maize. Sowing operations have gone well with government’s efforts during the lock down and as per official reports maize in the country has been sown in 31.27 lakh hectares as of 26th Jun’20 which is higher than 15.74 lakh hectares compared to corresponding period last year.

Since supply outlook is improving against subdued demand situation, prices are constantly under pressure these days. Currently supply is mostly from the state of Bihar which is the biggest producer of winter crop. Prices in Bihar market are averaging near Rs.1225-1250 per quintal at present and buying interest remains poor. Meanwhile, PSS procurement activity in AP is in full swing as on first week of June Maize procurement stood at 3.0 Lakh MT against target of 3.4 Lakh MT for the 2019/20 Rabi season. Likewise procurement in Telangana was reported at 7 Lakh tons for corresponding period. As a result estimates for, stocks in AP and Telangana are expected to contribute nearly 11% of current year Rabi season’s projected stocks. Due to procurement operations, average wholesale prices may show some gains in coming weeks, in case retail demand improves from current levels. 

From demand perspective, Jun’20 weekly chick replacement across India is anticipated to hover at 3.8 crore birds, with logistic hassles reducing. This development has provided scope for hatcheries to ship new born chicks with minimal chick mortality, and such scenario will be beneficial in boosting Maize demand prospects moving forward. Although consumption from poultry sector is expected to improve from broader perspective, but as of now it is difficult to assess whether this will be likely scenario, this year or the next year. On the whole good Rabi harvest with enhanced yields, rise in Year on year Kharif acreage till date, and sluggish domestic demand shall continue to keep the maize market under greater influence of sellers in coming weeks, also raising the possibility of a notable rise in year on year inventory. As per trade sources the maize processing units are currently operating at 45-50% of their capacity. Going by traders/mandi people views, average Rabi Maize prices in Bihar may fluctuate in the range of 1225-1275 Rs/qtl in the month of July.  

Price Trend of Superior grades of Rabi Maize at Gulabagh centre in June  

Date 

Average Price in Rs/Qtl  

June 1 

1230-1235 

June 2  

1225-1230 

June 3 

1220-1225 

June 4 

1230 

June 5 

1230-1235 

June 8 

1250 

June 9 

1250-1255 

June 10  

1250-1255 

June 11 

1253 

June 12 

1256 

June 15 

1258-1260 

June 16 

1255-1260 

June 17 

1260-1265 

June 18 

1260 

June 19 

1255-1260 

June 22 

1255 

June 23 

1256 

June 24 

1255-1260 

June 25 

1258-1260 

June 26 

1260 

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