Bears strike coarse grains mart

The coarse grains market is reeling under a bearish phase since the past few weeks on weak demand and bumper crop output cues.

According to sources, the market may remain steady at these levels but did not rule out the possibility of a rise in the coming months. Sorghum (jowar), pearl millet (bajra), barley and maize prices fell nearly 3-8 per cent.

Market observers said in the absence of heavy purchases the rally had tapered off. All three commodities play an important role in animal feed, especially the poultry industry.

Barley prices fell by more than 8 per cent since the beginning of April to Rs 680 a quintal against Rs 745 a quintal. According to a report by the US Grains Council, the prices of barley are more than 5 per cent lower than last year.

"The rates of barley can even come down till Rs 650 a quintal, but won't slip beyond that. We can expect (barley) to firm up then," said Krishna Kumar Chaudhary, a trader based in Srimadhopur in Rajasthan.On Thursday, arrival of barley in Srimadhopur was in the range of 1,000-1,200 bags (80 kg each). "As the crop this year is almost 20 per cent more than last year's, we expect the bearishness to stay for the time being," said Abhishek Agarwal, a Jaipur-based trader. Supply pressure has kept a check on prices in spite of steady demand, he said. Supply will continue till the end of June, he added.

The scenario is similar in the case of jowar and bajra. "The supply of jowar and bajra has been good in Rajasthan. But low demand has pushed the commodities into a bearish phase," said an analyst with Agriwatch commodities. Production estimates could not be known given the unorganised market structure of these commodities.

The present rates of bajra is ruling around Rs 600-620 a quintal against Rs 715-720 a quintal earlier. Similarly, jowar prices tumbled 3 per cent over the last week to Rs 860-870 a quintal.

"Bajra's May crop has already hit the market. But as buying is less in the summer, it has dropped to Rs 75-100 a quintal. The market may rally northwards after July," said Arvind Lodaya, a Mumbai-based trader.

As prices of coarse grains tumbled across all markets in India, it gave some relief to the end users, especially of maize, the US Grains Council report said.

"The feed sector (including poultry & livestock) and the starch sector are major users of maize, consuming about 10.45 million tonnes. In 2007-08, the sectors are expected to consume 10.88 million tonnes by a conservative estimate," added the report. Amit Sachdev, a representative of the US Grains Council, said, "Availability of these commodities in the market coupled with lack of buying activities has stoked the market with bearish sentiments."

Maize prices are less owing to good rabi crop from Bihar. Spot rates of maize are ruling around Rs 680-710 a quintal against Rs 750-760 a few weeks ago. The demand for maize for FY07 is estimated at 14.15 million tonnes and is expected to go up to 14.54 million tonnes in FY08.