Maize prices in the benchmark market of Chhindwara lost by over 11 per cent month-to-date and around 9 per cent week on week (WoW), thanks to the good weather, which boosted the harvest pace and the new crop arrivals picked up.

As the market resumed post-Diwali holidays on October 27, the maize prices in Chhindwara traded down by Rs 150 per quintal to Rs 2,100 per quintal. The fall in prices was as per our expectation and hit our short-term target of Rs 2,100 as mentioned in our recent weekly report.

Maize prices would continue the downward journey and may further correct to Rs 1,900 in the upcoming days. Prices would trade weak unless it is trading below the trend reversal point of Rs 2,239.

The demand from the poultry feed industry remained hand-to-mouth in the past few months as the traders and feed millers were waiting for the new crop harvest to pick pace and downward correction in the prices. Hence, with a fall in the prices, they would start their buying activities in the coming days.

The weather remained favourable for farmers to continue the harvest activities in the past few days. Also, the forecast for the next 5 days remains supportive for harvest, which would increase the new crop arrivals in the market.

The new maize crop arrivals in India from Oct 1 to 27, 2022, were 297 KMT, down 34.4% from the same period last year. The state-wise breakup of arrivals are as follows – Madhya Pradesh 123 KMT (-53.7% YoY), Maharashtra 37 KMT (-19.8% YoY), Rajasthan 29 KMT (+2.24% YoY), Karnataka 17 KMT (-39.5% YoY) and Telangana 18 KMT (-22% YoY).

The arrivals were delayed this year due to the unseasonal rains in October. Hence, new crop arrivals would increase in November, which would build pressure on maize prices in the short to medium term.

Table 1ETMarkets.com

Source: Agmarknet

Kharif maize production estimate 2022-23

In our preliminary estimates, we projected maize production at 21.95 million MT, which is higher by 1% than the previous year’s number of 21.77 million MT.

Maize acreage is estimated flat to last year while yield is projected to gain by 1% from the previous year given the suitable weather conditions in the key maize-producing states this year. Higher production in Madhya Pradesh and Rajasthan will offset the production loss from Karnataka.

Meanwhile, the rabi maize sowing progress is in the initial stages. Sowing started in a few districts of Karnataka, Maharashtra, West Bengal, and Tamil Nadu.

Overall sowing stood at 0.65 lakh Ha against 0.43 lakh Ha during the same period last year. Sowing would pick pace in the key producing regions in the upcoming days. The soil moisture level remains optimum across the key-producing states which would boost the rabi maize sowing.

The maize exports during 2021-22 (October-21 to August-22) were 33.1 lakh MT, down 5% YoY. The major export origins are Bangladesh 17.24 lakh MT (+3.27 lakh MT YoY), Vietnam 7.17 lakh MT (-3.84 Lakh MT YoY), Nepal 4.60 lakh MT (-0.89 lakh MT YoY and Malaysia 2.11 lakh MT (-0.41 lakh MT YoY).

With further correction in the domestic maize prices amid firm global corn prices, India would turn competitive for exports to the South-east Asian nations. Export demand would also increase from the neighbouring countries of Bangladesh and Nepal.

Table 2ETMarkets.com

Source: DGFT

Table 3ETMarkets.com

Source: DGFT

(The author is Senior Manager (Commodity Research), Origo Commodities)

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