Monsoon Eludes India, Commodity Prices in US, Genetic Modification – a precise tool

Monsoon eludes India – situation grave
Almost 54 percent of India has received either deficient or scanty rainfall. The most effected states are Rajasthan, Gujarat, Punjab, Haryana, parts of Andhra Pradesh, Parts of Maharashtra, Tamil Nadu & parts of UP.  This has affected prospects of the kharif crop. The crops that are affected include Paddy, sugarcane, cotton, groundnut, soybean and coarse cereals (Maize, Bajra and Jowar).
There are reports of some areas of Andhra Pradesh, Maharashtra & Gujarat receiving rains and farmers have gone ahead with second or third sowing. But the question that needs to be answered; Will these rains help?
Even if rains do occur, the time lost and the loss of productivity and production cannot be compensated.   
While India has seen some worst droughts and 2002 is a closest example. Maize production was 10.6 Million Metric Tons and it was possible to cover the deficiency due to stock availability from previous years and some wheat (unfit for human consumption) availability from Food Corporation of India.  This year (2004) it may not be possible. The wheat crop available in the country with FCI is about 25 Million metric tons, 8 MMT of old crop and 17 MMT of new procurement. The local wheat prices are at Rs.7800 – RS.8000 per ton (USD 169 – 174).
The delay / deficient monsoon has already led to higher prices in all maize consuming areas. Maize prices are being quoted at Rs.6800 – Rs.7000 per ton (USD 147 – 152) by the dealers, an increase of 20 – 25 percent over the average price of Rs.5500 per ton (USD 119)
Prices of other ingredients used by feed manufacturers and farmers, namely oil meals particularly soybean meal have risen to a record of Rs.16500 – Rs.17200.00 per ton, (USD 358 – 373) an increase of 20 – 25% over the average price of Rs.13500 per ton (USD 293).
The feed prices have increased to Rs.12000 per ton (USD 260), from an average price of Rs.10500 (USD 228) an increase of about 15%. This has lead to an increase in cost of production of live chicken from Rs.26.82 per kg (USD 0.58) to Rs.29.67 per kg (USD 0.64) in South India. The cost of production of live chicken in North India has risen from Rs.32.06 (USD 0.70) to Rs.34.91 (USD 0.76) per kg. The selling price, especially in North is not is the hands of the producers and is dictated by dealers.  
If the same situation prevails it will be difficult for the poultry produces to continue the business. 
Commodity Prices in US  and Freight Rates
The commodity prices in US are stagnant
Corn: USD 100.5 per ton FOB US Gulf  September delivery
Sorghum: USD 102 per ton FOB US Gulf September delivery
The last 2 weeks have seen a free fall in the US commodity prices due to a higher productivity estimates. It was estimated that the productivity will be close to 145 bushel/acres (3.68 tons/acre – 9.09 tons / hac). The new estimates suggest the productivity to be close to 148 bushels / acre (3.76 tons/acre – 9.28 tons/hac) due to good weather in US.
The freight rates have stabilized, but China is still buying steel and ore and rates may go higher as the trade increases.
Genetic Modification is not a  product, but a process 

There is substantial ignorance about the nature of GM. One of the most common misconceptions about GM is it is a new type of crop product, which it is not, it is a process. Each new crop variety needs to be carefully evaluated on a case-by-case basis, rather than making a blanket dismissal of the GM process, since there is nothing intrinsically dangerous about the process. GM is simply a new, more precise tool for plant breeding. 

GM is an artificial variation: it allows scientists to choose rather than relying on chance of random mutations or mutation breeding. 

Activists have always claimed that GM transgenes are unstable,  will escape and contaminate the environment; GM transgenes can enter our cells or our gut bacteria. But there is no evidence that GM transgenes are unstable or liable to escape. All cultivated crops can cross with wild relatives; there is no particular risk with GM crops. GM transgenes are no more likely to enter bacterial cells or human cells than any other DNA we eat in our food – and if they do, they don’t tend to survive.
Current varieties of GM crops include those that are insect-resistant and those that are herbicide tolerant. Both require lower inputs, such as spraying, and so are particularly suited to small-scale farmers in the developing world.
The fate of transgenic DNA in products derived from farm animals fed genetically modified feed has been assessed time and again. Most recent paper is published by – Jennings, J., Whetsell, A., Nicholas, N., Sweeney, B., Klaften, M., Kays, S., Hartnell, G., Lirette, R., Glenn, K. 2003 in the Bulletin of the International Diary Federation No 383 . 144(2): 41-46. 
Sensitive methods were developed to analyze milk for the presence of transgenic and plant DNA from cows fed a diet containing conventional or transgenic cottonseed or maize. Genomic DNA was extracted from milk and analyzed by PCR followed by Southern blot for fragments of the cry1Ac transgene and an endogenous cotton gene, acp1, from cows fed a diet containing whole cottonseed. Additionally, milk, liver, kidney, and spleen were assessed for fragments of the cry1Ab transgene and an endogenous maize gene, sh2, from animals fed a diet containing maize grain.

No sample was positive for transgenic or plant DNA fragments at the limits of detection for the assays following detailed data evaluation criteria. Results for sh2 analyses of milk were, however, indeterminate. A fragment of a bovine gene, prl, was amplified from each DNA extract to show that all preparations were amenable to PCR. These results indicate that DNA, whether derived from conventional or transgenic feed, is not present at detectable levels in bovine milk or organs.

As per a report by the Agricultural University of Wageningen, the Netherlands, it has been proved that production of GM-Free organic meat is virtually impossible – unless extreme caution is taken, which will produce vey expensive meat and meat products.

Animal food products already contain traces of GM organism, which originate from the internationally-traded commercial grains such as soybeans and corn. And it is expected that this will only increase as more GM grains enter the European market.
The report, commissioned by the Dutch Agriculture Ministry, determined that the cost of ensuring that animals are given only feed which contains no genetically modified (GM) organisms would be “astronomical”.
GM traces can be mixed with non-GM food via cross-pollination, during transport or storage. To prevent accidental mixes, an expensive “chain system” would need to be established that strictly kept GM and non-GM grains separate.
However, according to researchers only very small quantities of GM organisms are mixed with non-GM food, so there are no health issues for animals or humans.
I do hope you find the reports informative. Should you need any more information, please feel free to contact me.
Kind Regards
Amit Sachdev

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Commodity prices & Freight Rates , Monsoon voes in India and World needs GM

Commodity Prices are down, Freight Rates are up again
The US commodity prices headed down this week. The end week prices of the commodities were
Corn: USD 100 per MT (FOB US GULF) down from last weeks USD 106 per MT for Sept delivery
Sorghum: USD 100 per MT (FOB US GULF) down from last weeks USD 107 per MT Sept delivery
Barley: USD 126 per MT (FOB US GULF) up from last weeks USD 125 per MT Sept delivery
The freight rates on the other hand are showing an upward trend. On July 21, 2004 the US Gulf – Japan rates were quoted at USD 48.37 per MT up from 37.82 per MT quoted on June 21, 2004. Similarly, US PNW – Japan was quoted at USD 37.82 per MT on July 21, 2004 up from USD 24.72 per MT.

Monsoon Voes for Agriculture and Livestock Farmers alike
As per the Metrological Department, India has received 12 percent deficient rains. The North and North Western states of Punjab, Haryana, Himachal Pradesh, Rajasthan, Gujarat, Maharashtra and parts of Madhya Pradesh are worst effected. Of the 36 met zones 16 have recd deficient rates. On the other hand in the Eastern and North Eastern states of Bihar, parts of Eastern Uttar Pradesh, West Bengal, Assam and Arunachal Pradesh floods have caused extensive damage to crops and livestock.
The damage due to the deficient rains is still to be assessed, but the North and North Eastern states provide almost 55 percent Marketable Surplus Maize to the country food basket. The deficient rains will surely affect the overall availability of Maize in the coming months.
The drought like conditions have already led to an increase in ingredient prices. Maize is being quoted at Rs.6500 (USD 144 per MT) delivered, while Soybean Meal is being quoted at Rs.16500 (USD 366 per MT) delivered. The increase in cost of production of eggs and broilers would ultimately lead to loss of profit to the farmer. The cost pf production of broiler / kg has risen from Rs.26.82.per kg (USD 0.59) to Rs.29.67 per kg (USD 0.66) in South India (Integrators) and in the North the Cost of Production has risen from Rs.32.06 (USD 0.71) to 34.91 per kg (USD 0.77) (live weight basis)
Though GOI has contingency plans and food grains will be allocated for distribution to affected areas, fodder banks will be started for livestock, no contingency plans have been made for poultry producers or industrial users of maize for making available the  basic ingredient to them.

While going through some articles on Biotechnology and its advantages, came across an interesting article written by James Reynolds in The Scotsman. I reproduce the excerpts of the article.
World will need GM food, warns expert

– The Scotsman, July 21, 2004, By JAMES REYNOLDS

GENETIC modification and other biotechnologies are essential to increase food production and meet huge projected rises in the world’s population, a leading expert on plant science has warned.

If the advances made in creating genetically modified foods are not used to increase food output the world could find itself in the grip of a food crisis in as little as 15 years, perhaps even ten, said Professor Mike Gale of the John Innes Centre, one of Europe’s largest independent centres for research into plant and microbial science.

At present there are six billion people on the planet and, according to the United Nations, that number is set to rise to nine billion by 2050.

The current annual production of 1.8 billion tons of cereals must be increased to three billion tons a year, Prof Gale told the Bio-Science 2004 conference at Glasgow’s SECC. He warned: “We have doubled food production over the past half century. Now we have to do it again, but this time we have to do it in a sustainable way. We don’t have any more good land and we don’t have any more water and we have to use fewer chemicals.

“At least half of these increases will have to come from improved varieties, especially varieties bred to tolerate drought and salt and be resistant to pests and diseases. We must also reduce our reliance on fertilizers and other chemical inputs.”

Biotechnology can both speed up the breeding process and provide crops with advantageous new genes, and genetic modification is one of a range of techniques available.

The technology can provide variations not otherwise available in the crop or close relatives – such as insect-resistant cowpeas for Africa, rice rich in vitamin A in Asia and disease-resistant bananas throughout the tropics.

Bananas are an exceptionally difficult crop to breed and those bought in most British supermarkets are derived from a breed produced about 100 years ago. Over that 100 years, they have become susceptible to a wide range of diseases, in particular the Black Sigatoka fungus. In Nigeria banana plants have to be sprayed about once a week with powerful fungicides. Advocates of genetic modification say many farmers in Africa lose their crops because they can not afford the fungicides.
Although Prof Gale acknowledges that genetic modification is not the only solution to breeding new varieties of crops, he is adamant that the potential benefits can be realized.

He said: “It is time we came out and said people do not die from GM and the way in which crops are bred. They die from lack of food. There are no risks from GM.”

Despite GM trials in Britain concluding that two of the three crops tested had a damaging effect on wildlife, Prof Gale went on: “The results of the field trials carried out in this country are of absolutely no concern. If you look carefully at the trials it is evident that the GM crops required half of the herbicides compared to non-GM varieties, and also required half of the passes through the field by tractors. That means massive benefits to the environment.”
Should you need any more information, please feel free to contact.
Amit Sachdev

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US Commodity Prices & Productivity Comparisons, Bt corn less suscepible to mycotoxin & CD’s from Corn,

US commodity prices and Corn productivity trends in US and India
The US commodity prices are as under
Corn: USD 107.50 / ton for sept delivery
Sorghum: USD 105 / ton for sept delivery
Barley: USD 125 / ton for sept delivery (from US PNW)
The WASDE report is also out which shows that the productivity of corn (maize) in US is expected to be 3.68 tons / acre. In the US the corn production has increased seven fold since 1930’s from 0.5 tons / acre to the present. Agronomists call corn as a determinant plant. It grows, develops, sets an ear and produces a tassel, but does it only once. If the field conditions are good during development phases and all required inputs are provided, high yields can be expected.
In India the present productivity trends are 1.89 tons/hac (0.77 tons/acres) about 5 times lower than what US productivity trends are or are slightly higher than what US productivity was in late 1930’s. While US has been able to increase the productivity by over 7 times in 7 decades, Indian average productivity has increased very slowly in the last one decade (from 1.59 tons/hac in1 995 to 1.89 tons/hac at present)  though the requirements have almost doubled in this one decade. Though there are reports  that test plots in Uttar Pradesh and some areas on Bihar have produced yields equivalent to US average yields, but these are test plots which have been provided with all required inputs and are managed under best climatic conditions including irrigation. Such conditions are lacking for the average corn producer in India. Much more needs to be done for the corn producer as well as the end user to fulfill the demand of both. Farmer to receive the best inputs and fair price (Cost of production of commodity is higher as productivities are lower) and a regular supply to the end users (poultry, livestock  producers and starch manufacturers)
Bt Corn Produces Healthier Crops for Humans and Animals
Studies show biotech corn is less susceptible to harmful molds
Biotech corn may actually be safer to eat than conventional varieties — particularly in some developing countries — because it has built-in protection against insect pests that burrow into corn kernels, creating conditions for a mold to develop that can be harmful to both humans and animals.
“There is now clear evidence that food and feed products from Bt corn are often safer than the corresponding products from conventional corn because of lower levels of the mycotoxin fumonisin,” according to a November 2003 report from the International Service for the Acquisition of Agri-biotech Applications (ISAAA).
Fumonisin is produced when insects burrow into corn stalks and kernels, allowing fungi to enter and produce harmful mold. While mycotoxin levels are closely monitored in the industrial world, they are not monitored in many developing countries in the tropics where the threat from fungal infection is greatest.
“Minimizing insect damage through Bt corn has significantly reduced concentrations of fumonisin in food and feed,” said Clive James, the author of the report from ISAAA, a nonprofit organization whose mission is to help alleviate hunger and poverty by sharing crop biotechnology applications. “This is a major benefit in developing countries where levels of the harmful mold are higher in food and feed and where corn is directly used as food by a significant portion of the population.”
A number of independent studies have confirmed that Bt corn — enhanced with a naturally occurring soil bacterium, Bacillus thuringiensis, that wards off insect pests — has significantly lower fumonisin levels:
* A 2000 study by the USDA’s Agricultural Research Service found that fumonisin levels were between 30 and 40 times lower in Illinois Bt corn fields than in those planted with traditional varieties.
* A 1999 Iowa State University study found a “significant” lowering of fumonisin levels in Bt corn over conventional varieties. “Our results indicate that under some conditions, genetic engineering of maize for insect resistance may enhance its safety for animal and human consumption,” said the study’s lead researcher, Gary Munkvold. “Lower mycotoxin concentrations in Bt corn hybrids clearly represent a benefit to consumers.”  
* “Bt corn is protected against damage from corn borers and consistently has 90 percent less fumonisin than conventional plants,” said a 2000 report from the American Academy of Microbiology titled, 100 Years of Bacillus Thuringiensis: A Critical Scientific Assessment. “Thus, protection against insect damage and subsequent fungal infection may have important health implications for consumers and farm animals exposed to fumonisins in their diet.”       
High levels of fumonisin can cause liver and kidney damage in many animals, and fumonisin is believed to be a human carcinogen. While human food safety from high fumonisin levels are generally not considered a major problem in the developed world, it is a more serious health issue where insect infestation levels are high and corn is a staple for human survival.
In Kenya, for example, where the normal corn intake is about 400 grams per day, eating corn with fumonisin contamination of just 1 part per million (ppm) would mean exceeding the provisional maximum total daily intake (PMTDI) for fumonisin by three times.
“Given that maize (corn) contamination of 1 ppm is not uncommon, there are risks for people consuming high amounts of contaminated maize,” according to the ISAAA report. The recommended guidance level for fumonisin in corn is 2 ppm.
To date, South Africa is the only country in Africa to approve the commercial planting of Bt corn, and the Philippines is the only country in Asia to do so. In Europe, Spanish farmers have been planting Bt corn for several years, as have farmers in the United States and Canada.
“In countries with commercial maize production and chronic Fusarium kernel rot, Bt maize can make the difference between a significant proportion of the crop meeting fumonisin guidelines or not, and this is very important in a world that is becoming increasingly conscious of food and feed safety,” said the report from ISAAA, which has offices in Kenya, the Philippines and the United States.
Corn based optical CD’s
Sanyo Electric has delayed the introduction of an optical disc based on a polymer derived from corn that was announced last year as a more environmentally friendly alternative to plastic discs.
The disc, dubbed “MildDisc” by Sanyo, was to have been offered to customers from December last year and volume production was due to begin in the first half of this year but this has been delayed while Sanyo refines the technology, says Ryan Watson, a spokesperson for the Osaka-based company.
“There was a concern that if the disc was exposed to heat greater than 50 degrees Celsius that it wouldn’t work properly,” says Watson. “A timely topic now as the heat is blazing down on Tokyo, so the main obstacle that they are working on now is trying to improve the disc’s resistance to heat. They can easily improve its resistance to heat with a mix of material but that kind of defeats the purpose of the MildDisc.”
Sanyo has no current estimate on when it will be introduced.
When it was announced in October last year the company received “quite a few” inquiries from potential customers, says Watson. Sanyo is promoting its use in place of conventional discs for applications such as free CDs bundled with magazines or discs that are given away at trade shows or via direct mailings.
Manufacturing Process
Production of the plastic used in the MildDisc begins with Cargill Dow in the U.S. It mills kernels of corn to separate out the starch and then processes these to get unrefined dextrose. Using a fermentation process similar to that of beer production, the dextrose is converted into lactic acid, according to the company’s Web site.
Sanyo converts the lactic acid into a polymer used in the disc substrate using a method developed with Japan’s Mitsui Chemicals.
Sanyo estimates that around 85 corn kernels, each weighing an average of 0.5 grams, are needed to produce enough polymer for a single 4.7-inch optical disc, so an average ear of corn can produce around 10 discs. The International Recording Media Association estimates world demand for CDs at around 9 billion annually, and the U.S. Department of Agriculture estimates world corn production at about 600 million tons, so less than 0.1 percent of the world’s corn production is theoretically required to produce enough polymer to satisfy worldwide disc demand.
Kind Regards
Amit Sachdev


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Indian Budget – what is there for poultry, Freight rates & Quality Protein Maize


India Budget – what is there for Poultry
In the budget for 2004-05, the Finance Minister, Mr.P Chidambram has announced Food Processing as one of the thrust areas. The new food processing industries coming up will be given incentives. For the ongoing food processing industries specially meat, the excise duty on Processed / Packed chicken and value added products, which are hermetically seals and branded, has been halved from 16% to 8%. The incentive will certainly help the industry and infuse new capital in the sector.
Indian poultry has a world class production system, FCR’s as good as or better than US / Europe. What the industry lacks is processing facilities. Of the total 1300 millions chickens produced in the country only 5% is sold as processed. As per the new WATT publication India stands No. 5 in broiler production. Investments in processing sector will be both beneficial to the industry as well as the consumers who will be able to purchase a processed product, produced hygienically which is packed and is safe to eat.
Value added foods offer not only convenience but also variety, which is lacking in the Indian market. And the 8% cut in the excise duty may excite entrepreneurs to experiment and offer much more variety of value added products that is currently available to the Indian family which is as per the Indian palette.
Much needs to be done in this connection. Raw chicken as on date is not under the Meat Food Products Order of 1973 (MFPO 1973) rules and only the products are inspected. Change has to occur, raw chicken needs to be defined under the MFPO rules , which now will be covered by Ministry of Food Processing Industries. All chicken produced in the country should be inspected and all plants making value added products should be notified and should source raw material from the inspected plants processing chicken.    
This cannot happen overnight, but a start has to be made, rules need to be ammended, model slaughter facilities has to be identified, where these rules can be implemented and practicality of the  rules studied. It will be a slow and gradual process which will change the face of Indian Poultry Industry for a better tomorrow.

Ocean Freight Rates

The  analysts are not fully sure of just what is going on but the rates are moving up again @ dollar a day  this last week. The Gulf-PNW spreads remain the same, the rates are just climbing back to levels of a month ago. From June 23 to today rates have taken back $8.50/mt of their previous decline. This could be just be a case of an adjustment following a rapid, and maybe overdone, previous drop. Also China seems to be back in the market for bulk steel and iron ore business, which could be pulling the prices up.
Researcher looking to improve protein quality in corn (From
COLLEGE STATION A scientist with the Texas Agricultural Experiment Station said the development of corn with improved protein quality would reduce the need for soybean additives when feeding corn to swine and poultry.

Corn is deficient in two essential amino acids, lysine and tryptophan. Increasing the relative content of these two amino acids is the project of corn researcher Dr. Javier Betran.

The resulting nutritionally-improved corn, known as Quality Protein Maize, could have positive implications not only for livestock feeding, but also for human consumption in particularly in developing countries in Latin America, Africa and Asia. There, corn is the main food staple.

Nobel laureate Dr. Norman Borlaug, a distinguished professor of international agriculture at Texas A&M; University, has said new technological advances are key to helping developing countries meet future food supply demands.

He has said his greatest worry is Africa, because of its high rates of population, little application of improved technology and escalating food deficits. Borlaug and the International Center for Wheat and Maize Improvement are promoting the development and adoption of Quality Protein Maize in developing countries around the world.

While better protein corn would help human nutrition, it would vastly improve feeding costs in segments of animal agriculture by reducing the need of better protein supplements, Betran said.

“Corn is mainly used for animal feeding in the United States,” Betran said. “About 65 percent goes into animal feed. If you feed poultry the same corn, you need to supplement it with another product. Soybeans or synthetic lysine are commonly used to provide the protein quality that the corn doesn’t have. Our approach is to improve corn to enhance the content for these two essential amino acids.”

In the early 1960s, scientists discovered a “mutant” maize that contained protein with nearly twice as much lysine and tryptophan as found in normal maize. Called “Opaque-2 maize,” the protein had a 90 percent of the nutritive value of the proteins in skim milk – the standard against which cereal protein is normally measured.

But it was later discovered by incorporating the “Opaque-2” mutation to corn, it yielded less grain. It also had higher moisture content and was more susceptible to fungal and insect infestations.

“Those facts right there are not well received by farmers,” Betran said. “Our challenge is to put together the protein quality with a competitive yield grain. We want it to be a value-added trait that perhaps has good appealing characteristics. Farmers are not ready at this time for something that has the protein quality but is not a high-yielding variety.”

The research includes another component — making a variety that is less susceptible to Aflatoxin, which has been a nemesis for Texas farmers the past decade. Aflatoxin, a mold that commonly develops during periods of drought, can cause illness or death in livestock that consume it.

“We want to have something that is high quality, but yet have low-risk to Aflatoxin and it is adapted to our growing conditions,” Betran said. “We are selecting and breeding materials from different origins to develop a value-added corn with a desirable combination of traits.”

Quality Protein Maize, “QPM” as it is called has been developed in India also by the Maize Directorate at IARI, Pusa, New Delhi and was introduced in Bihar & eastern UP, where malnutrition prevails. It can be good source of protein, but will need to be “Identity Preserved”, if farmers wish to get a fair price for the commodity.
The US Grains Council has information of High Lysine Corn which is produced in US as is used in Poultry / Livestock feeding. Also US produces High Oil Corn, High Extractable Starch Corn and High Amylose Corn, which are specific traits. Should you need any information on the above commodities, please feel free to contact.
Kind Regards
Amit Sachdev

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