“Demand from feed makers is very strong. They are buying whatever supplies are reaching the market. Prices are unlikely to go down as demand for poultry products is expected to rise during the ongoing winter season,” said Shreedhar Reddy, a trader in Davangere, Karnataka, the largest producer of corn in India.
Demand for poultry products usually rises during winter as people eat more fatty foods than in the high temperatures of the summer.
Traders were expecting India corn on low supplies and higher demand from the new season crop to rise this week, but that did not happen. Lower-than-expected supplies are keeping prices firm in both, the futures and the spot markets, despite a lack of demand from exporters, said Shankarji, a trader based in Karimnagar in Andhra Pradesh.
Local prices have also found support after the farm ministry forecast India’s 2012/13 summer-sown corn output at 14.89 million tonnes, down from 16.22 million tonnes in the previous year.
The summer-sown variety accounts for more than 80 percent of India’s total corn output.
Increasing domestic demand amid concerns over decline in production is keeping prices firm in local markets. Higher local prices could make it unprofitable to sell Indian corn in overseas markets and could cut trim India’s corn shipment by nearly 40 percent, traders said.
The projected increase in domestic demand and the lower production estimates have pushed local spot prices to around $240 a tonne, compared with around $200 last year. Traders are waiting for spot prices to fall by about $20 a tonne before buying for export.
In Chicago, the key December corn contract on the CBOT was up 0.83 percent at $7.33 per bushel at 1211 GMT.
The key December corn contract on the National Commodity and Derivatives Exchange (NCDEX) closed up 2.59 percent at 1,427 rupees (around $6.6 per bushel) per 100 kg, after hitting a high of 1, 431 rupees earlier in the day, a level last seen on September 7.
Source:
Reuters India
