Weak demand in the domestic as well as export markets is likely to keep maize prices under pressure. The grain commodity, which jumped to close to Rs 1000 a quintal mark last season, seems to have lost its demand mainly due to higher minimum support price (MSP).
In the domestic market, poultry takes care of over 80 per cent of the domestic production where as rest goes to starch industries, cattlefeed and human consumption.
Starch manufacturers said that due to capacity cuts they are not procuring maize. From the export markets too, demand is not pouring as global prices are ruling lower than the domestic rates. On the other hand, demand from the poultry industry too is on the downside because of the recent outbreak of bird flu.
Last season, the country exported as much as 2.5 million tonnes - the highest ever. This has put maize on boil with starch makers and poultry industries crying foul asking for ban on maize exports.
According to commodity analysts, arrival pressure is another factor which is not letting maize market firm up. This has led the spot rates to slip below the MSP of Rs 840 a quintal which earlier stood at Rs 630 a quintal. Market sources added that government has procured maize at MSP only in Andhra Pradesh and Karnataka so far.
“We are buying maize at a rate of Rs 815-820 a quintal,” said Vishal J Majithia, managing director of Mumbai-based Sahyadri Starch.
“Unless demand picks up, it is unlikely to see firm pricing scenario in maize,” added analysts.
On the NCDEX, the near month maize future closed firm on Monday at Rs 795 a quintal against the previous week close of Rs 795 a quintal.