A seasonal report on Maize - Karvy Commodities Broking

Indian Maize Export ScenarioThe major export destinations for India are UAE,Middle East, South Asia, Singapore, and Malaysia.The exports have been declining for the past twoyears and projected to decline further in 2012-13due to more domestic poultry demand. However,overall the export scenario is very goodcompared to other Maize suppliers. India has arelative price and location advantage. India is in abetter position to export the produce since theproduce is 25% cheaper compared to US anddistance to the importing countries is less, thusreducing the freight charges. Malaysia, Indonesiaand Thailand are the main buyers. India is likelyto export around 10% of its total produce in2012-13.Competitive advantage of Indian Maize exportsDemand for Indian maize from south eastern countries is likely to pick up as prices are lower as againstthat of the US corn. Maize prices in US are ruling high because of dry weather conditions thereby turning anadvantage for Indian maize exports. The price is cheaper and delivery is faster in comparison to othersuppliers. The voyage i.e. distance to Asian markets is lesser compared to other suppliers and hencelogistics cost involved is less.Proximity to the importing countries is an added advantage. Importing countries like Australia which usedto purchase from US and China has switched over to India because of the proximity and cheaper cost.Indian corn is available at US$310/ tonne for South East Asia whereas Argentine corn is quoted at US$ 340/tonne thereby leading to competitive advantage. Farmers are going for Maize cultivation since it requiresless water for growth, highly remunerative since the prices are ruling at an all time high.Relationship between poultry industryand maize productionMaize production is directly related to the 10growth and development of the Indian poultryindustry since 60% of the overall productiongoes to the poultry sector. Since soybean pricesare ruling high due to declining production,poultry owners and growers are increasingquantity of maize in poultry feed. As far as Indiais concerned, poultry is growing at a rate whichis more than that of the Maize production.Maize production is likely to increase by 3%whereas poultry sector is poised to grow by 6-8% on Y/Y. Andhra Pradesh poultry ownersassociations have requested the ministry ofConsumer Affairs and Public Distribution to86420Decline in Demandallot Wheat and Rice at subsidised rates to thePoultry Livestock Strach Otherspoultry farmers who are facing problems fromSources: Industry & TG Estimatesrising Maize and soybean prices which willhave negative impact on 2 lakh maize farmers earning who are directly dependent on poultry sector due toits immense contribution to the industry.Soy meal and Maize relationshipMaize export trend (Million Tonnes)Sources: USDA & KCTL ResearchMaize Consumption Trend (Million Tons)Maize and soy meal both are major sources of carbohydrate and protein for poultry feed. Maize and soymeal are pre dominantly used as a feed in poultry. Maize contains starch which is highly digestible forpoultry. It is highly palatable, free of anti nutritional factors and is a source of readily available energy. Soymeal contains 40-48% crude protein which is good for meat production while raw soybeans contain anti5.04.54.03.53.02.52.01.51.00.50.0