Pune: With the price of maize at an all-time high, the poultry-feed and starch industriesNSE -1.12 %, which rely heavily on this grain, are facing tough times. Shortage of the raw material has led to high production costs and under utilisation of capacities with the starch industry fearing the shutting down of plants. The maize crop has been hit by drought and pests leading to the shortage.
B Soundararajan, chairman, Suguna Holdings, said, “We are not able to cover the inflation of maize in the cost of production of chicken and eggs.” “After hitting a record high of Rs 25/kg a few weeks ago, maize prices are at Rs 21/kg now. We have stopped using maize,” said Jaison John, general manager, Suguna Holdings. The arrival of Bihar’s rabi crop has helped prices soften a bit. The NCDEX spot prices of the rabi crop are at Rs 18/kg on Monday as against Rs 12/kg on the same day of the previous year.
The feed industry has started using other raw material like wheat and rice as substitutes. However, the maize-based starch industry has no other alternative raw material to use. Manish Kumar Gupta, chairman, Gujarat Ambuja Exports, said, “Due to shortage of corn, the entire starch industry is operating at 50 per cent capacity now. If we do not get enough raw material on time, the industry may have to shut the plant due to lack of raw material for processing.”
Gupta said due to lower crop in the kharif 2018 season, coupled with weak monsoon rains in key producing states such as Karnataka and Telangana, maize output has shrunk this year. “Corn prices are soaring to an all-time high in the market because of weak supply which is triggering demand for duty-free import of corn. Bihar’s minor crop from its rabi season will not suffice the industry demand till the next crop arrives in October,” he said. The centre has allowed the import of 1 lakh tonnes of maize. However, the industry claims that this is not sufficient to meet the demand. The starch industry has been demanding that the commerce ministry should give separate HS codes for food-grade and feed-grain corn. The industry is not able to import corn under advance licence provisions due to an order of the High Court preventing such imports.