Friday, Sep 6, 2019

By Sampad Nandy

NEW DELHI – India's maize output for 2019-20 (Jul-Jun) kharif season is seen at 16.1 mln tn, an average of estimate by 10 market participants polled by Cogencis showed.

At 16.1 mln tn, kharif maize output this year would be 6.6% higher than the market's estimate of 15.1 mln tn for last year, but sharply lower than the government's estimate of 19.0 mln tn for 2018-19.

Most participants polled said the kharif maize crop last year was smaller than the government's estimate due to low acreage, and also because the crop in Karnataka took a beating due to widespread fall armyworm infestation.

A smaller crop last year pushed India to import maize after a gap of two years. The country had imported about 130,000 tn maize last year to meet the requirement of the poultry industry.

This kharif season, production is seen rising because acreage is higher from the previous year.

Farmers have sown maize across 7.9 mln ha so far this kharif season, compared with 7.7 mln ha a year ago. In Karnataka, maize acreage had shrunk by about 5% to 1.1 mln ha due to the pest attack, but the decline had been more than offset by Madhya Pradesh, where the acreage had increased 14% on year to 1.5 mln ha.

Farmers switched to maize from other crops this year, as maize prices have risen sharply over the last few months due to low supply. In Nizamabad, the benchmark market for the coarse cereal, prices touched a record high of 2,430 rupees per 100 kg in July, nearly double from the year-ago level. 

"If you look at the acreage data, there is a jump in area under maize in Madhya Pradesh. The output in these states is seen higher, however, the output in traditional areas likes Karnataka is likely to fall," an official with the France-based food major said.

In Karnataka, there are concern over yield, as the crop sown across 100,000 ha has been damaged due to heavy rains while another 8,000-10,000 ha has been infested with fall armyworm again this season.

Most market participants expect the yield in the northern states to be higher this year due to rains in parts of Madhya Pradesh and Punjab. 

"The output in the kharif season is likely to be 1 mln tn higher than last year as the crop is in good condition in Madhya Pradesh, Chhattisgarh, and other north Indian states," an official with a UK-based food major said. 

Despite the likely rise in output, maize prices in spot markets are unlikely to soften in the near term as supply is very tight and there is hardly any ending stock available, traders said.

"Whenever the crop hits the market, bulk buyers will purchase in large quantities to pile up stocks," an official with an Indian grocery retail chain said. 

Imports, too, cannot be ruled out even though market players expect the crop to be slightly higher as India needs about 18.5-19.0 mln tn maize for poultry feed and starch units till April, an official with a multinational trade firm said.

Even if India's kharif maize production increases by about 1 mln tn, it may not be enough to meet local demand, he said.

Summary of the Cogencis poll on India 2019-20 (Jul-Jun) kharif maize output: 
* Range of expectations: 13.00-20.20 mln tn for 2019-20, against 12.0-19.0 mln tn for 2018-19
* Mean: 16.1 mln tn vs 15.2 mln tn
* Median: 16.1 mln tn vs 15.1 mln tn

The output estimates by polled entities:

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Edited by Akul Nishant Akhoury

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