Corn production is expected to be around 20 million tonnes, lowest in last five years due to irregular rainfall across growing regions of Tamil Nadu, Andhra Pradesh, Maharashtra and Madhya Pradesh. Last year, the production was 23.67 million tonnes as per fourth advance estimates of Department of Agriculture & Cooperation, Government of India. Due to lower production estimates, the price of corn is likely to remain firm.
Explaining the domestic situation, Shashin Desai, Executive Director-Business Operations, Anil Limited sai that the production is likely to be hit as yield
in growing regions have fallen this year compared to last year. Erratic monsoon this year has impacted yield and quality of crop. Though the new crop would put pressure on the price in next month; the prices are likely to remain firm thereafter as production is expected to fall by around 20 per cent.
Desai said corn prices have fallen globally due to sustained higher ending stocks since last couple of years. "USA has seen their reserves swell to its highest in last 28 years due to which their ending stocks are also likely to remain high. But, lower domestic supply in India would support the prices goingforward, he added.
According to latest report by Food and Agriculture Organisation of the United Nations, international food commodity prices continued to decline in August a sample supplies, a slump in energy prices and concerns over China's economic slowdown all contributed to the sharpest fall of the FAO Food Price Index in almost seven years.
He said that due to lower prices of corn internationally, export of corn is not viable this year as domestic price is higher compared to international prices. We believe lower exports would support lower domestic production this year and thereby check higher prices, Desai said.
