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maize price forecast

Maize prices hover around MSP

Maize is the most widely distributed crop of the world which is cultivated in diverse agro climatic conditions of tropics, sub-tropics and temperate regions. Maize is utilized domestically for poultry and cattle feed, food, starch manufacturing and other industrial purposes. In the last few years, good quantity of maize is also being exported from India to different countries. It is understood that with the increasing demand for value added foods and industrial requirements, from a growing economy and population, maize will hold its share as an important cereal crop.

Maize ranks first in world production (868 mt from 168 mHa) followed by wheat (691 mt) and rice (461 mt). This represents 38% of the total grain production as compared to 30 % for wheat and 20% for rice.

Among the cereal crops in India, Maize with annual production of around 22.5 million tonnes from 8.67 million hectares ranks third in production and contributes to 2.4% of world production with almost 5% share in world harvested area in 2013-14.

Karnataka, Andhra Pradesh, Maharashtra, Tamil Nadu, Rajasthan and Uttar Pradesh together contribute 60 per cent of area and 70 per cent of maize production in India.  Karnataka produced 4.4 million tonnes of maize from 1.3 million hectares in the year 2012-13. The estimated maize export from India is around 3.5 million tonne in 2013-14 and the current season maize exports are expected to be lower by about a third over last year’s record high of 4.8 million tonne due to rising domestic demand.

Major markets of maize in Karnataka are Davanagere, Belgaum and Bagalkot. The sowing period of maize in Karnataka starts from the mid of May and harvesting by middle of December. So, for the benefit of farmers, the NCAP Network project on Market Intelligence functioning in the Department of Agricultural Marketing, Co-operation and Business Management, UAS Bangalore collected the modal prices of maize that prevailed in Davanagere market during the last twelve years and econometric analysis was carried out to predict the prices of maize for the harvesting months. Also an opinion survey of maize traders was conducted. Based on the analysis and Market survey, it is forecasted that maize would fetch a modal price of around Rs.1250-1330 per quintal during October 2014 to December 2014 and keeping in view of the fact that 2013-14 crop season stocks position is good, the prices are unlikely to increase much above the MSP during this Kharif 2014 harvest period. This forecast prevails for current market sentiments & monsoon and could vary with changes in the market situation and rainfall. Farmers are advised to take suitable sowing decisions. Farmers need to know the probable prices at the time of crop harvest. This coincides with the november-december months. This is a harvest season forecast hence eight months forecast is provided for kharif 2014.

ARCH-GARCH analysis was carried out using Eviews software. The monthly prices of maize, for the period of April 2002- May 2014 for the Davanagere market were taken for analysis. From the results of Table 1, it could be inferred that the maize market had no volatility in prices. The sum of Alpha and Beta not indicated ARCH and GARCH effect for the given market. The value not close to 1 indicates non persistence of shocks or volatility in the market.



Dr.C.P.Gracy, Nagashree, N., Mangala V Reddy

Department of Agricultural marketing co-operation and business Management

    UAS, GKVK, Bangalore-65

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Please note that this is the opinion of the author and is Not Certified by ICAR or any of its authorised agents.