Corn prices globally are expected to recover from multi-year lows on lower production estimates in major producing regions such as the US, the European Union, Brazil, Argentina, and Ukraine. However, the recovery is likely to be gradual and moderate due to higher ending stocks.

 

According to a report of the US Department of Agriculture released this month, global corn production is expected to fall by 3.4 per cent in 2015-16.

 

It said as compared to 2014-15, corn production, until November 2015, fell in major countries, by 23.7 per cent in the EU, 19.2 per cent in Ukraine, and 4.9 per cent in India. Other countries reporting reduced production were Brazil (4.1 per cent), the US (4 per cent), and Argentina (3.4 per cent).

Overall, corn production in these countries is estimated to drop by 7.3 per cent cumulatively to around 535 million tonnes (mt) and world production is likely to drop by 3.4 per cent to 974.9 mt compared to 1,008.7 mt last year, said Shashin Desai, Executive Director-Business Operations, Anil Ltd, here on Thursday.

 

He said corn prices globally have been falling since the last few years due to abundant supply. In the last three years, prices have gone down drastically. Last year, corn production touched a record high with the US, the EU and China leading the list. This year, however, production is expected to drop in the US and EU, while China is expected to have record output again with expectations of 225 mt against 215.7 mt last year.”

 

Though experts expected corn production in India at around 20 mt earlier, according to the USDA report, it is likely to decline by just 5 per cent to 22.5 mt.

 

Desai said though production is expected to fall this year, the ending stocks would still be higher as compared to consumption, and so the recovery in prices would be modest. According to a World Agricultural Supply and Demand Estimates (WASDE) report released on November 10, global corn ending stocks are expected at 211.91 mt compared to 208.21 mt last year. More than half the world’s 2015-16 corn-ending stocks are expected to be held in China.

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