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Maize likely to gain in 2011 on weak arrivals

posted Feb 23, 2011, 9:38 AM by Unknown user
Maize has been in an upswing for the past 3-4 months. As the kharif arrivals started hitting the spot markets from November the demand for maize from the poultry sector supported the prices. The winter season demand for eggs prompted more buying from the poultry sector in south India. The unseasonal rains which affected the rabi sowing activities also favoured the prices to gain. The acreage under maize in rabi season dropped by 1% which kept the prices in upswing till the month of February. 

Moving forward, maize is anticipated to correct initially on Rabi crop arrival pressure. According to the second advance estimates the production of maize is estimated to increase by 4 million tons to 20 million tons for the crop year 2010-11. These sentiments might affect the prices to trade lower once the rabi arrivals hit the spot markets during March. 

However, the contribution of the rabi maize to the total production is around 25% which would limit the down fall. The carry forward stocks are estimated to be lower which is expected to help the prices to recover. The uptrend in the prices is intact in the long run as good buying can prop up across the spot markets. 

The starch manufacturers and the industrial sector users are expected to create good demand as they buy large quantities required for year round consumption during the arrival season alone. 

The fresh arrivals of the rabi crop are likely to end by the month of April from when the lean season for the commodity starts. Decreasing arrivals and the good demand from the poultry sector to pick from May onwards might help the prices to gain. 

Further the demand for seed consumption purpose from the farming sector from June is anticipated to keep the prices in an uptrend through 2011.