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India Maize Summit 2015Session Theme: Outlook and riding the demand wave

P K JoshiInternational Food Policy Research Institute9-10 April 2015

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Outline

1. Global status of maize production2. Status of global maize trade3. Dynamics of maize production in

India4. Favorable environment for maize5. Challenges to the maize sector6. Solutions to address the challenges

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Current Status

• Maize sector has transformed rapidly– Production and yield levels increased significantly

• Production from 615 mt in 2001 to 1018 mt in 2013• Yield levels from 4.5 t/ha to 5.5 t/ha

– Significant outscaling of innovations• Single cross hybrid, quality protein maize, GM maize,

conservation agriculture, farm mechanization, transplanted maize winter & spring maize, baby corn, sweet corn, etc

• Unlike rice and wheat innovation was led by private sector

– Diversified use of maize• Food to feed, biofuel, edible oil, breakfast food

Global production of maize (m tons)

Americas (2.4%)

Asia (3.7%)

East Asia (3.5%)Europe (1.2%)

CAGR

Source: FAOSTAT 2015

19801981

19821983

19841985

19861987

19881989

19901991

19921993

19941995

19961997

19981999

20002001

20022003

20042005

20062007

20082009

20102011

20122013

0

200

400

600

800

1000

1200

World Americas AsiaEast-Asia South & South-East Asia Europe

World (2.6%)

Americas (2.4%)

Asia (3.7%)

East Asia (3.5%)

Europe (1.2%)South & South-East Asia (4.0%)

CAGR

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Spatial distribution of maize production

• More than half of world’s maize is produced in USA (35%) and China (22%)– Other top 5 maize

producing countries: Brazil (8%), Argentina (3.2%), Ukraine (3%), India (2.3%) and Mexico (2.2%)

• Maize yields have significantly increased in all the countries

USA35%

China21%

Brazil8%

Ar-gentina

3%

Ukraine3%

India2%

Mexico

2%

Others25%

Yields of the major maize producing countries (t/ha)

USA China Brazil Argentina Ukraine India Mexico Others World

7.4

4.5

1.9

3.5

2.5

1.52.0

2.4

3.7

8.6

4.6

2.7

5.4

3.0

1.82.5

2.8

4.3

10.0

6.0

5.3

6.6 6.4

2.5

3.23.6

5.5

1990 2000 2013Source: FAOSTAT 2015

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Major exporters and importers and their share in production (%)

• Global maize trade increased from 82 mt in 2000 to 125 mt in 2013

• Significant spatial shifts in exports

> 80% export in 2000– USA (58%), Argentina (13%) and

France (10%)> 80% export in 2013– Brazil (27%), USA (24%), Argentina

(20%), Ukraine (17%) and France (6%)

• Imports>40% of imports by Egypt (16%), Japan (14%), S Korea (9%), Mexico (7%), and Spain (6%)

Country 2000

2013

Argentina

65 63

Ukraine 4 54

France 50 42

Brazil 0 33

USA 19 7

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Significance for the industry:Global changing pattern of maize utilization

Food14%

Food processing5%

Feed55%

Seed1%

Waste4%

Other Uses21%

World 2011

Food16%

Food processing6%

Feed67%

Seed1%

Waste4%

Other Uses7%

World 2001

Significance for the industry:Changing utilization pattern of maize in

USA

Food1%Food processing

8%

Feed42%

Seed0%

Other Uses49%

USA 2011

Food2%Food processing11%

Feed74%

Seed0%

Other Uses12%

USA 2001

Significance for the Indian maize industryUtilization of maize during 2014

Food16%

Poultry Feed52%

Livestock Feed11%

Starch/ethanol19%

Seed1%

Food processing1%

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Dynamics production of maize in India

• Traditional maize growing states– Subsistence, low hybrids adoption, low yields (< 2 t/ha)

• Non-traditional maize growing states– Commercial, 100% hybrids, high yields (3.5-4.5 t/ha)

• Bihar demonstrated revolution in maize production– Yields went up from 1.5 t/ha in 1990-91 to 3.6 t/ha in 2012-

13– Shift from monsoon season to winter and spring – Adoption of hybrids is more in spring and winter

• Favorable environment– Seed sector, MSP, Poultry industry, alternative uses

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Impact of hybrid on yield of maize (TE 1952-53 to TE 2012-13)

MSP of maize and other commodities (Rs/Q)

Commodity

MSP growth rate (%) (2005-

15)

Maize 143

Paddy 139

Wheat 115

Barley 1002005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

540 540620

840 840880

980

1175

1310 1310

MSP of Maize (Rs/Qtl)

Global maize prices (US$/million ton) at constant US$ 2010 prices Vs WPI

19992000

20012002

20032004

20052006

20072008

20092010

20112012

20132014

0

50

100

150

200

250

300

0

50

100

150

200

250

300

Global maize prices (US$/million ton)

WP

I (2004 = 100) 100)

Glob

al M

aize

Pric

es (U

S$/M

illio

n To

n)

Significance of maize for poultry industry in IndiaMaize and egg production

0.0

5.0

10.0

15.0

20.0

25.0

30.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

Mai

ze p

rodu

ction

(mill

ion

tons

)

Egg

prod

uctio

n (B

illio

n N

umbe

r)

Egg production

Maize production

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Challenges faced by the industry

• Risk of climate change threat– 15% expected loss in production by 2080–High risk during rainy season (largely

rainfed)

• Smallholder agriculture–Quality, scale and aggregation– Long value chain

• Inefficient and aflatoxin contamination

• Low competitiveness in the global market

• Poor extension (source of information)

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Threat to maize sector: Price competitiveness of Indian maize (USD/t)

Year Argentina

USA India

2010-11 285 - 290

290 - 295

235 - 140

2011-12 270 - 275

295 - 300

NA

2012-13 240 - 245

260 - 265

230 - 235

2013-14 195 - 200

190 - 195

225 - 230

2014-15 NA 170 - 175

215 - 220

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Solutions to address challenges

• Growing global demand for multiple purposes– R&D investment to focus research to improve

efficiency– Identify niche products and niche markets for export

• Improve competitiveness by growing hybrids– GMOs may also reduce costs

• Strengthen backend support system• Improve value chain and financing value chains• Insurance products to face risks and adoption of

hybrids and improved technologies

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Thank You

Photo source: anithamexportsandimports.in;

washington.edu