Higher ending stock of corn globally will reduce returns for the Indian corn growers thereby hurting sowing prospects in the kharif season in 2015, experts maintained.
Global oversupply of corn has brought down global corn prices by about 27 per cent since April 2014 and is also affecting the domestic prices and exports.
According to the US Department of Agriculture (USDA) data, the ending stocks for 2014-15 trade year is estimated to rise 10.3 per cent to 188.45 million tonnes as against 170.84 million tonnes at the end of last year.
The data reveals that the United States with rise of 15 million tonnes of ending stocks would contribute maximum to ending stocks globally.
"Higher ending stocks are an area of concern for domestic as well as international markets. The falling prices will impact sowing in India as well as other major exporting countries like US, Brazil and Ukraine," said Raju Choksi, vice-president (Agri Commodities), Anil Nutrients Ltd a part of city-based Anil Group.
Choksi attributed the current firmness in the domestic corn prices to unseasonal rains in some of the growing regions in India. "We expect prices to soften once Rabi crop arrivals start from next month. The global situation is likely to put pressure going forward on Kharif sowing as growers are likely to avoid sowing a crop, which is already in abundant supply," Choksi said.
Since last few years, demand for corn as animal-feed has risen in India as compared to demand for food, seed and industrial consumption.
"The Indian market is following world market as far as consumption pattern is concerned. However, the ratio of feed consumption globally is higher at around 80 per cent against 55 per cent in India. We expect this trend to continue as growers shift to corn for feed following lower oilmeal production," Choksi added.