Farmers are selling maize below the minimum support price (MSP) of Rs 840 a quintal on account of high moisture content in the new crop.
Currently, the fresh stock is quoting in the range of Rs 750-840 a quintal levels in the physical market due to higher moisture of over 15 per cent.
“Maize prices are ruling low because of inferior quality of grains, which have high moisture content. Prices are falling rather in greater speed in physical market than futures market,” Karvy Comtrade Analyst Amand Rajalaxmi said.
The spot prices have slid by Rs 35-50 a quintal, while futures have dipped by Rs 10-15 a quintal in a day, she said, adding that farmers are selling maize below MSP price level.
A farm scientist said, “Prices are determined by the quality of maize grains depending on the moisture content. The lower the moisture content, the more the price.”
The most commonly accepted moisture level for marketing purpose is 12 per cent, he said.
Currently, maize with over 14 per cent moisture-content is hitting the mandis. Arrival at Nizamabad in Andhra Pradesh, the main trading centre for maize stood at 7,000-8,000 tonnes.
“Farmers are selling their produce below MSP level as they do not want to dry the grain because of high-cost involved in the process,” said Rama Gowda, a farmer based in Davanagere, Karnataka.
Spot prices for high-moisture content grain are trading below Rs 840 a quintal level, while superior quality grain at above Rs 930 a quintal.
On Friday, the October contract fell 0.52 per cent at Rs 857 a quintal and November contract by 0.29 per cent at Rs 855 a quintal on the National Commodity and Derivates Exchange counter.
Meanwhile, Nizamabad-based trader Anil Kabra expressed fear that the prices may further dip if more such crops come to the market.
Karvy’s Rajalaxmi further said that the high moisture may lead to aflatoxins in maize. Prices may fall significantly if alfatoxins contaminated the crop arrivals into the market in the coming days.
Aflatoxins are carcinogenic metabolites produced by Aspergillus flavus, a fungal pathogen that infects maize both in the field and during storage.
