Starch prices may head north on bullish maize

Even as maize prices kept scaling up, prices of starch remained stable over the last one month. However, industry players feel that starch will lose its stability and move northwards, if maize prices keep rising in the coming months.

In Ahmedabad, the cereal is quoting at Rs 850 a quintal, whereas in other parts of the country, it is available at lesser rates. On an average, there has been an increase of Rs 40 a quintal over the last one month.

"Though the maize prices have gone up by over Rs 40 a quintal during the month, the fluctuation in starch is in the range of Rs 5-10 a bag (of 50 kg)," said Amol S Sheth, president, All India Starch Manufacturers' Association. He added that the rising domestic prices had hit exports of the commodity.

Ganpatraj L Chowdhary, managing director, Riddhi-Siddhi Gluco Biols, said starch prices could not always be directly proportional to those of maize. "Starch is a finished product, whereas maize is a raw material," he said. However, he added that if maize continued to surge, starch prices would also go up.

According to him, starch is available in the price range of Rs 775 to Rs 800 a bag.

Meanwhile, the National Commodity & Derivatives Exchange (NCDEX) has expanded its delivery centres for maize. The exchange has added two delivery centres, which will be at par in terms of locational premium and discount. Both the centres are in Maharashtra, which will make the delivery easier and faster in the state.

In its modified contract specification in yellow red maize contract, which will be applied on the contracts ending in May 2007 and thereafter, the exchange added Jalgaon and Jalna as the additional delivery centres, taking the total number to 7. The other centres are Karimnagar, Nimbaheda, Bahraich, Davengere and Ratlam.

Traders in Maharashtra had to get their delivery from far-off centres, which incurred them high freight cost. Market sources said delivery process for maize would now be better in the state.

On the parameter of count, the new specification stipulates up to 400 grains of maize for every 100 gram, which was earlier in the range of 360-400 grains per 100 gram. On the moisture content, there have been no changes in specification, remaining at 12 per cent.