As we had predicted weeks ago, Afghan smuggling is finally driving the hike in corn prices in Punjab and they have spiked by up to 15 percent in the last two weeks based on the data of seven key cities gathered by ProPakistani.
Corn (locally known as maize) average prices clocked between Rs.2,400 to Rs. 2,480 per 40kg in Kasur, Sheikhupura, Jhang, Multan, Bahawalpur, Bahawalnagar, Gujranwala and Sahiwal posting a 12-15 percent increase from the average price of Rs.2,160 two weeks ago. It must be noted that these are investor rates for corn reaching up to feed mills and in grain markets auctions, prices have touched up to Rs. 2,700 per 40kg in some cities as well.
Corn has been the only grain commodity whose prices have remained relatively on the lower side while sugar, wheat, rice, and even cotton are touching record highs. The primary contributors to its low prices have been record production, lower exports, and rains lowering the quality of the produce.
But amid the ample production, a huge amount of corn was hoarded and stocked by investors as its prices were expected to cross Rs. 3,000 by the beginning of July but that never happened.
Even more so, bad weather and lower exports further kept the prices lower despite the fact that the farming community has also held a significant portion of the spring maize unsold as “prices do not justify even the cost of production” stated a farmer while talking to ProPakistani
On the other hand, the longer-than-expected bearish trend was proving a burden for critical hoarders and so-called ‘investors’ and to address this, it was decided to initiate the smuggling of corn so the prices could be pushed higher for a profitable exit for these people.
“In the last two weeks, multiple shipments of corn have been smuggled across the Western Border in an attempt to shore up the domestic prices and more are expected in the coming weeks” stated a market consultant while talking to ProPaksitani.
He added that the corn has finally been pushed toward its original price of Rs. 3,000 per 40kg but the greed can cause losses as well to both farmers and traders as the summer crop can flatten the market next month. Some others also expected the prices to stay high despite the new crop as its moisture level will be around 20 percent while the corn available in stock has a satisfactory moisture content of 12-14 percent.
The primary burden of it comes down to the key stakeholders including the government which failed to forecast the rise in production and explore new export avenues for corn. It’s been one of the few crops that has shown a remarkable 135 percent rise in production between 2011 and 2023 backed by high-yielding international quality hybrids and robust industry demand but the exports have been far lower in comparison.
The rise in corn prices is also expected to cause a hike in prices of poultry and bakery products where it’s primarily used while poultry prices have already been higher for more than a year now due to bottlenecks in importing GMO Soybean feed which is another major ingredient of the poultry feed.
