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Bihar Maize Prices Stabilize as Seller Reluctance Shape Market Trends

8 Oct 2024 6:04 pm
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New Delhi, October 8 (Commodities Control): Bihar maize prices have remained stable, as buyers have had to offer higher prices due to sellers' reluctance to sell at lower rates. Over the past few weeks, prices had decreased by approximately INR 50-100 per quintal, but this week, a rebound occurred with prices increasing by INR 30-50 per quintal, currently quoted at INR 2,500-2,575 per quintal.

The market trends shifted when kharif arrivals began, prompting many stockists in Bihar to panic and liquidate their inventories. This action contributed to the earlier price drop. However, most stockists have now sold off their holdings, which has led to a lack of lower-priced maize for buyers, subsequently providing strong price support this week. Additionally, favorable sentiment has emerged following reports of delayed maize cultivation in Bihar due to flooding.

Currently, approximately 10-11 lakh tons of maize remain in Bihar, with around 6 lakh tons held by processors and the remaining 4-5 lakh tons belonging to cultivators and traders. This suggests that only about 4-5 lakh tons will be available for sale in the open market, as the processors will likely consume the bulk of the stocks. This remaining stock is lower than the previous year and is reportedly not in optimal condition, especially given the rising demand for maize in Bihar and the Eastern region.

This year, demand from ethanol producers has surged significantly, leading to an increased consumption of maize in Bihar compared to previous years. The poultry sector's demand in the region has also risen, further contributing to the market pressure. Currently, bulk purchasers are buying maize in Bihar at prices around INR 2,600.

West Bengal and Assam, which have historically relied on Bihar stocks, are now experiencing heightened demand largely due to the proliferation of ethanol plants. This has raised concerns that Bihar's stocks may not suffice to meet the demand in the Eastern zone in the coming months. In Madhya Pradesh, warehouse spot prices are currently quoted at INR 2,350 per quintal, with freight costs adding approximately INR 300, leading to delivery prices for the Eastern zone around INR 2,650. This situation suggests that an increase in kharif arrivals is unlikely to pressure prices downward in Bihar.

As kharif maize prices generally rise after reaching a low point in late October to early November, it is probable that Bihar maize prices will increase during this period, especially following the entry of stockists.

On Saturday, maize prices remained stable to slightly weak in major centers of South Western and Central India due to an influx of new arrivals. Karnataka reported arrivals of around 6,000 tons, with prices trading slightly firmer at INR 2,400-2,470 per quintal, primarily because of delays in arrivals. Most of Karnataka’s maize is being transported to Tamil Nadu, where delivery prices range between INR 2,600-2,650 per quintal.

In Maharashtra’s Amalner mandi, maize arrivals were around 700-800 tons, with prices steady at INR 1,450-1,600 per quintal, while seed quality maize with 20-25% moisture was sold for INR 1,700-2,000. Improved weather conditions are likely to increase arrival volumes in the near future.

The Jabalpur mandi in Madhya Pradesh received approximately 1,000 quintals, with prices ranging from INR 2,350-2,450 per quintal. Overall arrivals in Madhya Pradesh were around 5,000-10,000 quintals, though significant rainfall has damaged around 10-15% of maize crops in the Jabalpur/Chhindwara/Seoni region. However, sowing was about 10-15% higher than last year, suggesting no significant decrease in overall supply for the year.

With the weather improving across India, the number of maize arrivals is expected to rise soon. Despite the pressure from increasing arrivals, maize prices are anticipated to remain weak in the immediate future. Nonetheless, prices are unlikely to fall below INR 2,200-2,300 (14-15% moisture) in October, as bulk buyers face difficulties sourcing supplies at these rates amid the current market conditions.

(By Commoditiescontrol Bureau; +91 98201 3018)


       
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