THE MAIZE REPORT

The Queen of Cereals is the word known for Maize because of its highest genetic yield potential among the cereals. Every part of the maize plants have economic values: the grain, leaves, stalk, tassel, and cob all are used to produce a large variety of food and non-food products. It is cultivated in more than 166 countries across the globe. Maize is the third most important cereal crop in India after Rice and Wheat. It is the second most important cereal crop in the world in term of acreage and third important cereal crops for Ukraine.

Rabi Sowing and Production Estimates

Cultivation area of Maize increased by 1.80 % at 19.31 lakh hectare so for in the ongoing 2021-22 rabi season according to data released by Agriculture ministry in February-22. Maize was sown in 17.50 lakh hectares in the year ago same period. Normal sowing areas of Maize is 18.15 lakh hectares in India (Last three year average). Acreages increased in Bihar, Maharashtra, Andhra Pradesh, West Bengal, Tamil Nadu and Telangana.

State-wise Rabi Acreages
*Department of Agriculture

Globally, top three Maize producers are USA, China and Brazil which account almost 62% of world maize productions. In addition to staple food for human being and quality feed for animals, Maize offered as a raw material to thousands of industrial products, cosmetic, film, textile, gum, package, paper industries.

World-wide Maize Producers

Source: Indiastat, 2020

India's agriculture ministry is expecting the rabi maize production of 9.8 million metric tonnes as per 2nd advance estimates of production of food grains for 2021-22 released by Ministry of agriculture and farmer welfare on 16th Feb’22. Kharif production is estimated at 22.59 million metric tonnes. Total production of Maize is estimated at 35.39 million metric tonnes.

Indian Maize Balance Sheet

As the Ending stocks are expected to be lower than in 2020-21, Indian Maize prices are expected to be supported by lower prices.

*Source: Agriwatch, 2020 F-Forecast

Maize Import and Export
India’s major export destinations of Maize are neighbouring countries. India has exported Maize of value of Rs.4675Crs in 2020-21. It is 359% higher side to previous year which was at Rs.1019crs. No imports have been from the Ukraine/Russia in 2020-21 due to ample domestic productions.

*Source: DGCIS Annual Export. Till Dec’21, Data in Metric Tonnes

Global Market Overview
Globally, USDA lowered 2021-22 beginning stocks 0.46 million metric tons (mmt) to 292.23 mmt. Production was lowered 1.77 mmt to 1,206.96 mmt. That put global ending stocks for 2021-22 at 303.07 mmt, down 2.47 mmt from last month’s forecast. USD lowered Brazil’s production 3 mmt 0to 115 mmt and lowered Argentina’s production by .5 mmt to 54 mmt. USDA also increased Ukraine’s production 2 mmt to 42 mmt.

World top five Maize importers: The top five corn importers in 2020/21 (Oct-Sep), U.S. corn dominated in China, Mexico, and Japan. Ukraine was the predominant supplier to the European Union, followed by Brazil. In contrast, South Korea imported similar volumes from Argentina, Brazil, and the United States, as well as residual amounts from secondary exporters like Russia and Paraguay.

Corn ending stocks: for Argentina, Brazil, and Ukraine are projected to remain small as a large portion of their production is typically destined for foreign markets. Domestic use for Argentina (26 percent) and Ukraine (19 percent) is small relative to their production. For Brazil, the second crop, which accounts for three quarters of the national production, is primarily destined for overseas, while first-crop corn is used in the domestic market. In comparison, the United States has ample storage facilities and a large level of consumption. On average over the past several years, 85 percent of the U.S. crop is used domestically. Again, the United States is projected to carry the lion’s share of exporter ending stocks for 2021/22.

Export Contributors of Russian and Ukraine Maize

Russia and Ukraine are contributing around 0.75% and 9.15% in world maize export respectively. Maize mainly exported to China, Nether land, Iran, Egypt, South Koria and Turkey.

Maize Consumption Pattern

Highlights

• Maize shipments are expected to be hold from the Russia and Ukraine till further notification.
• Maize spring sowing is expected to impact in Ukraine if war prolonged as normally sowing start from March onward.
• Import demand of China, Netherland, Turkey, Iran, and South Korea is likely to shift to alternative export countries following black seas region tension.
• China has cut its estimate for 2021/22 Corn consumption to 287.7 million tonnes, down from 290.7 million tonnes estimated in the previous month on slowing demand from both livestock feed and Industries.
• Prices also supported by the concern about hot and dry weather in South America stressing crops in key export countries Brazil and Argentina.
• Domestic crop conditions of Maize are good due to favourable weather and Harvest is expected to ready from 1st week of April onward.
• The USA is the largest ethanol producer in the world accounting for 46% of global production and the second largest in biodiesel production accounting for 19% of production, 87% of bioethanol production in the USA is corn based.
• CBOT Maize Futures prices have shown big spike of around 8% in last five trading sessions with high volatility. Indian spot markets are already trading at premium to CBOT Maize has shown spike of4% in same timeframe.

Price Trend

NBHC View: The price of Maize are expected to continue positive trend in near term following good demands of maize in domestic as well as international market. Prices may get support by lesser carry over stock in domestic market amid global demand. Rabi maize arrivals are expected to begin in domestic market in next month.