Prices of maize fell in key spot markets due to weak demand at high prices.

Prices of maize fell in key spot markets due to weak demand at high prices. Sharp decline in prices were limited due to continued tapering of supply.

Bulk buyers are awaiting the new crop arrivals to start and might reduce their consumption for some time due to sharp rise in prices. In Nizamabad, arrivals were at 500-600 bags (1 bag = 100 kg), about 100 bags lower than previous arrival. In Davangere, arrivals were pegged at 500-600 bags, compared with 700-800 bags on previous arrival.

Farmers in the country had sown maize across 1.55 mln ha, 10% lower than the year-ago period. Acreage was marginally lower than the five-year average of 1.59 mln ha for the period. Overall sowing of rabi maize took a hit due to a sharp decline in acreage in Telangana, Maharashtra, Karnataka, and Andhra Pradesh.

Sowing took a hit due to severe water stress in these states. As of last week, water level in key reservoirs in Maharashtra was at 36% of the total capacity, while in Karnataka, it was 41% of the total capacity. In Andhra Pradesh, the level was at 24% of the total capacity.

In Karnataka and neighbouring states, sowing continued to lag due to severe infestation of fall armyworm in kharif maize. The pest, initially identified in Karnataka’s Chikkaballapur district in July, spread to Telangana, Andhra Pradesh, and Tamil Nadu by the end of the kharif season, leading to widespread crop damage and output loss.

In the largest growing state of Bihar, the acreage rose 1.1% on year to 475,000 ha. The acreage has topped the season’s normal of 444,600 ha for the state.

Due to a sharp fall in key states, maize output for the rabi season is seen declining. Traders pegged rabi maize production at 4.0-4.5 mln tn this season, much lower than 8.5 mln tn estimated output for 2017-18. Any sharp change in acreage is unlikely here on as the sowing season is drawing to an end.