Presentacion de 11th Asian Maize Conference which took place in Beijing, China from November 7 – 11, 2011.

1. Changing Demand Patterns and
Maize Value Chains in Asia
Bekele Shiferaw, Jonathan Hellin, Vijesh
Krishna, Olaf Erenstein and Sika Gbegbelegbe
CIMMYT
b.shiferaw@cgiar.org
11th Asian Maize Conference
November 7-11, 2011
Nanning, China

2. Outline
• Changing demand (and supply)
patterns
• Maize value chains for
– food
– feed
– high value maize (vegetable
maize)
• Projected future demand for maize
• Implications for research, production
and value chain development
• Conclusions

3. Value chains
• Kaplinsky (2000) defines the value chain as ‘the full range of
activities which are required to bring a product or service from
conception, through the intermediary phases of production,
delivery to final consumers, and final disposal after use’.
• Kaplinsky and Morris (2001) distinguish value-chain analysis from
supply chains by emphasizing the:
– linkages both between and within actors in the chain
– Coordination and collaboration; joint investments; sharing of
information for mutual economic benefit
• Value chain analysis includes mapping of key actors, relations,
price flows, value added, marketing costs, profits, risk and
benefit distribution and governance
3

4. Value Chains
Impact
Farmer Farm
Input Value Chain Consumption Income
Commerc
Foundation Seed
ial Farm Level
Plant Seed Distributi Crop
Seed Maize
Breeding Production on & Marketing
Producti Production
Sales
on
Food, Feed Food, Feed
Consumer: and other and other
Consumption Product Product
Marketing development
Output Value Chain

5. Why Worry About Value Chains?
• Impact = f(technology, markets, policy and institutions)
• Information: awareness to make adoption decisions
• Seed access: translate desired demand to effective demand
• Capital and finance: credit and insurance services
• Markets access: market linkages, marketing costs, price volatility,
processing, storage, handling and distribution
– access to domestic and regional markets
– quality and standards in export trade
– food safety
– competitiveness, competition and fair prices
• Policies : subsidies, extension, regulatory rules, discretionary
intervention, capacity building, and sustainability

6. Maize value chains and
drivers of change
• Food maize
• Feed maize
• Population growth – Poultry feed
• Income growth – Swine feed
• Urbanization – Stover for ruminants
• Globalization and trade • Vegetable maize
– Sweet corn
– Baby corn

7. Key issues
• Understanding changing demand patterns
• Research and policy implications for:
– Adoption, production and supply (input value chains
for seed, fertilizer, equipment, etc)
– End user preferences, quality and standards
– Markets and trade (prices, trade policy, etc)
– Value chain development (integration, coordination,
storage, processing, distribution)
– Farmer participation to capture new and expanding
markets
– Equity and income growth for the poor

8. Maize globally and in Asia
Region Annual average Annual average Area (%) Production
area (million ha) production (%)
(million tons)
Eastern and Southern Africa 18.04 34.38 12.0 4.6
Western and Central Africa 11.12 17.4 7.4 2.3
West Asia and North Africa 2.17 13.63 1.4 1.8
South Asia 10.53 25.11 7.0 3.3
Southeast Asia and Pacific 8.26 25.92 5.5 3.4
East Asia 31.4 165.51 20.9 22.0
Asia 52.36 230.17 34.9 30.6
Mexico and CAC 9.26 26.84 6.2 3.6
Other Latin America 19.13 83.24 12.8 11.1
Eastern Europe 6.5 29.13 4.3 3.9
North America 33.57 330.89 22.4 44.0
Developing Countries 109.9 392.01 73.3 52.1
World 149.97 752.04 100.0 100.0

9. 2,000
4,000
6,000
8,000
-4,000
0
-2,000
10,000
12,000
14,000
16,000
Iran 18,000
Iraq
Jordan
Lebanon
Saudi Arabia
Syria
Turkey
Yemen
India
Myanmar
Nepal
Pakistan
Cambodia
Indonesia
Laos
Malaysia
Philippines
Thailand
Viet Nam
Japan
China
North Korea
Maize net imports in Asia (1000 tons)
South Korea

10. Trends in area under maize in Asia (million ha)
60
50
Others
40 Pakistan
Viet Nam
30 Thailand
20 Philippines
Indonesia
10 India
China
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

11. Trends in maize production in Asia (million tons)
250
Others
200 Pakistan
Viet Nam
150
Thailand
Philippines
100
Indonesia
India
50
China
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

12. Trends of maize yields in Asia (ton/ha)
6.0
China
5.0
Viet Nam
4.0 Thailand
3.0
Pakistan
2.0
India
1.0
0.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
China India Indonesia Philippines Thailand Viet Nam Pakistan Others
Source: USDA, 2010

13. Annual average growth rate of maize area (%)
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
China India Indonesia Philippines Thailand Viet Nam Pakistan Others
-2.0
-4.0
-6.0
2002-2004 2005-2007 2008-2010
Source: USDA, 2010

14. Annual average growth rate of maize production (%)
25.0
20.0
15.0
10.0
5.0
0.0
China India Indonesia Philippines Thailand Viet Nam Pakistan Others
-5.0
2002-2004 2005-2007 2008-2010
Source: USDA, 2010

15. Annual average growth rate of maize yield (%)
20.0
15.0
10.0
5.0
0.0
China India Indonesia Philippines Thailand Viet Nam Pakistan Others
-5.0
2002-2004 2005-2007 2008-2010
Source: USDA, 2010

16. Demand for alternative uses

17. Average annual maize demand for food as percent of total
maize demand in Asia (2005-2007)
90
80
70
60
50
40
30
20
10
0
Pakistan
Jordan
Iran
Laos
Yemen
Korea, Rep
Turkey
Bangladesh
Nepal
Sri Lanka
Saudi Arabia
Viet Nam
Thailand
Malaysia
China
Syria
Timor-Leste
India
Philippines
Myanmar
Indonesia
Cambodia
Korea, DPR
West Asia South Asia Southeast Asia and Pacific East Asia
Source: FAOSTAT, 2010

18. 100
0
10
20
30
40
50
60
70
80
90
Lebanon
Jordan
Iran
Syria
Saudi Arabia
Source: FAOSTAT, 2010
West Asia
Turkey
Yemen
Myanmar
Sri Lanka
India
Pakistan
Nepal
South Asia
Bangladesh
Vanuatu
Malaysia
Thailand
Viet Nam
Philippines
Indonesia
Laos
Cambodia
Southeast Asia and Pacific
Timor-Leste
of total maize demand in Asia (2005-2007)
China
Korea, Rep
Average annual maize demand for feed as percent
East Asia
Korea, DRP

19. 100
0
10
20
30
40
50
60
70
80
90
Turkey
Jordan
Iran
Yemen
Source: FAOSTAT, 2010
Lebanon
West Asia
Syria
Saudi Arabia
India
Pakistan
Nepal
Myanmar
Bangladesh
South Asia
Sri Lanka
Laos
Indonesia
Philippines
Timor-Leste
Malaysia
Viet Nam
total demand in Asia (2005-2007)
Thailand
Southeast Asia and Pacific
Mongolia
China
Korea, DPR
Average annual other demand of maize as percent of
East Asia
Korea, Rep

20. Growth rates for food and feed
demand in Asia
Annual growth rates for maize feed demand (%) Annual growth rates for maize food demand (%)
20.0 18.0
16.2
16.0
14.7
15.0 14.0
12.0
10.0 9.4
10.0
7.4 8.6
6.4 6.7
5.8 5.3 8.0
4.9 4.4
5.0 6.0
6.0 5.2
1.9
0.9 4.1
4.0 3.2
0.0
Asia (total) Central Asia East Asia South Asia South-East West Asia
2.0 1.8
2.0 1.1 1.4
Asia
-5.0 0.0
Asia (total) Central Asia East Asia South Asia South-East West Asia
-2.0 -0.1 Asia
-7.5 -1.9
-10.0 -4.0
Annual average (1990-1999) Annual average (2000-2007) Annual average (1990-1999) Annual average (2000-2007)

21. International prices for major cereals (US$/ton)
Maize Rice Wheat
1200
1000
800
600
400
200
0
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Oct
Oct
Oct
Oct
Oct
Apr
Apr
Apr
Apr
Apr
2007 2008 2009 2010 2011
21

22. Cost of production in India
1400
Cost of production (Rs/qn)
1200
1000
818
800 693
624
600
400
200
0
Paddy
Paddy
Paddy
Paddy
Paddy
Paddy
Paddy
Paddy
Paddy
Wheat
Wheat
Wheat
Wheat
Wheat
Wheat
Wheat
Wheat
Wheat
Maize
Maize
Maize
Maize
Maize
Maize
Maize
Maize
Maize
Bihar Chhattisgarh Gujarat Himachal Jharkhand Madhya Uttar Pradesh Uttarakhand Average
Pradesh Pradesh
22

23. Average cost of production, prices and farm
profits (Rs/qn)
Cost of production and farm profits (Rs/qn) in eight states of India
1200
1000
800
600
400
200
0
Cost of Harvest price Minimum Harvest price MS price profit
-200 production (Rs/qn) Support Price profit (Rs/qn) (Rs/qn)
(Rs/qn) (Rs/qn)
Paddy Wheat Maize
23

24. Value chains for high value maize

25. Sweet corn
• Production and exports • Thailand also has an advantage
dominated by the United over US maize in Asian markets
States and Europe because it does not grow GM
• However, the US is losing its maize.
market share of Asia’s • Significant shift in the international
importers to Thailand and trade of sweet corn for Asia
China • Import of sweet corn has reduced
• Advantage in year-round fresh by 12% while export is increased
production, lower labor costs, by 162% (2000 -2009)
proximity to buying • China and Japan are the major
destination importers and China with Thailand
and Malaysia major expeorter
• Improved quality of sweet
corn products has led to an
increase in Thailand’s exports.

26. World exports of sweet corn (1000 tons)
1000
800
600
400
200
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
World Africa Americas Asia Europe Oceania
Source: FAOSTAT, 2011

27. Sweet corn exports from Asia (1000 tons)
180
160
140
120
100
80
60
40
20
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Thailand China Israel
China, Hong Kong SAR Singapore Malaysia
Indonesia Others

28. World imports of sweet corn (1000 tons)
1050
850
650
450
250
50
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
-150
World Africa Americas Asia Europe Oceania

29. Sweet corn imports into Asia (1000 tons)
120
Japan
100
80
60
China
40
South Korea
20
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Japan China Republic of Korea China, Hong Kong SAR
Philippines Singapore Saudi Arabia Kazakhstan
Lebanon Others

30. Asia's share (%) of sweet corn global trade
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Import Export

31. Baby corn
• Short cycle crop with a duration of
about 60 days as compared to the 110-
120 days for food grain crop.
• Labor-intensive high value crop with
significant export demand
• Asia has emerged as the major
producer and exporter (e.g. Thailand,
India, Malaysia, China)
• Competitiveness in export markets
depends on quality and production
costs
• Income diversification and
intensification for small-scale maize
farmers - harvest multiple crops and

32. Baby corn
• Contract farming with major seed companies
or processors to access inputs and for timely
marketing
• Small-scale farmers need to meet quality
standards to benefit from value chains
• High domestic demand in China and other SE
Asia countries .Growing high end domestic
demand in South Asia
• Thailand is the largest exporter in the world
with over 61 thousand tons exported/yr
• Export markets: USA, Japan, Malaysia, UK
(canned baby corn) and
• Asian countries (Hong Kong, Singapore, Japan
and Malaysia) for fresh baby corn

33. Challenges
• Access to inputs (new seeds, fertilizer, etc)
• High risk (drought, floods, etc) and lack of insurance
• Price volatility/seasonality
• High marketing and transport costs
• Inadequate farmer organization to achieve economies of
scale
• Limited contract farming by food and feed processors for
grain maize
• Storage and handling
• Timely marketing - especially for high value maize
(perishable)

34. Future demand for maize in Asia
(IMPACT Model Projections)
34

35. Projected maize demand in Asia
600
500
Southeast Asia
South Asia
400
Million tons
East Asia
300 West Asia
North Asia
200
Asia
100
0
2000 2010 2020 2030 2040 2050

36. Projected demand for alternative uses
600
500
400 Total
Food
300
Feed
200 Biofuel
Other
100
0
2000 2010 2020 2030 2040 2050
36

37. Maize demand in East Asia
400
350
300 China
Million tons
250 Mongolia
200 North Korea
150 South Korea
Japan
100
East Asia
50
0
2000 2010 2020 2030 2040 2050

38. Projected maize demand in South Asia
90
80
70 Afghanistan
60 Bangladesh
Million tons
Bhutan
50
India
40 Nepal
30 Pakistan
20 Sri Lanka
South Asia
10
0
2000 2010 2020 2030 2040 2050

39. Projected demand SE-Asia
70
60 Kmer and Laos
Indonesia
50
Malaysia
Million tons)
40 Myanmar
Philippines
30
Simgapore
20 Thailand
10 Vietnam
Southeast Asia
0
2000 2010 2020 2030 2040 2050

40. Net trade: Huge imports to meet
the rising the demand..
20
Southeast
0 Asia
2000 2010 2020 2030 2040 2050 South Asia
-20
East Asia
Million tons
-40
West Asia
-60
North Asia
-80
Asia
-100
-120
40

41. Projected maize net-trade in SE Asia
10
0
2000 2010 2020 2030 2040 2050
-10
China
-20 Mongolia
Million tons
-30 North Korea
South Korea
-40 Japan
-50 East Asia
-60
-70
41

42. Projected Maize Net-Trade for South Asia
5
0 Afghanistan
2000 2010 2020 2030 2040 2050
-5 Bangladesh
Bhutan
Million tons
-10 India
Nepal
-15
Pakistan
-20 Sri Lanka
South Asia
-25
-30
42

43. Conclusions
• The rapidly changing demand for maize in Asia
has opened new and untapped opportunities for
agricultural transformation and income growth
for poverty reduction in the region.
• This however requires an integrated approach
(technology, markets and policy) that stimulates
expansion in production to meet the growing
demand while also diversifying market
opportunities for resource-poor farmers to access
and benefit from emerging markets.

44. Conclusions
• Improving access to new seeds, complementary inputs and services to
expand production to meet the growing demand
• Diversifying market opportunities for maize farmers in less favored
areas to access emerging markets
• Building market linkages between small-scale maize producers and
other value chain actors
• Improving access to market information and other business services to
rural producers
• Supporting organizational capacity of small-scale maize producers to
achieve economies of scale
• Enhance skills in maize vegetable production and post-harvest
processing that add value to products
• Policy support for small maize producer to understand and better
satisfy product quality and delivery standards