Commodities Report

Turmeric Spot and Futures continued its downward trend and settled 0.26% and 1.48% lower respectively on Friday on account of weak demand from the domestic and overseas buyers. Better crop output for the second consecutive year coupled with better carryover stocks of spice this season is pressurizing prices.

Production, Arrivals and Exports
Arrivals in Nizamabad stood at 1000 bags on Friday.

Turmeric production for the year 2011-12 is projected at 82 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 2010-11. However, area covered under turmeric till 21st September 2011 stood at 0.67 lakh ha 2.9% lower as compared to 0.69 lakh ha in the previous year.

According to Spices Board of India, exports of Turmeric during April 2011- September 2011 stood at 41,500 tonnes as compared to 28,500 tonnes in 2010-11, rise of 46%.

Courtesy: Angel Commodities


NCDEX jeera remains lower on poor spot demand

Jeera Spot prices and Futures continued to trade bearish owing to reports of better output this season on Friday. Lacklustre demand from the domestic buyers is also weighing on the prices.

Sowing of jeera in Rajasthan has gained momentum due to favorable weather condition. According to Gujarat farm ministry, area sown under jeera till November 30, 2011 stood at 1.55 lakh hectares (lh) up 67.5% as compared to last year. Carryover stocks of jeera is expected to be around 9-10 lakh bags as compared to 4-5 lakh bags in the last year.

Prices in the global markets of Indian origin are quoting around $2,800-2,950/tn while Syrian origin is quoting at $3,100-$3,150/tn.

Production, Arrivals and Exports
Unjha markets witnessed steady arrivals of 3,000 bags amidst offtakes of 2,500 bags on Friday.

Production of jeera in 2011-12 is expected to be around 35 lakh bags as compared to 29 lakh bags in 2010-11. (Each bag weighs 55 kgs). (Source: spot market traders).

According to Spices Board of India, exports of Jeera during April 2011- September 2011 stood at 16,000 tonnes as compared to 18,800 tonnes in 2010-11, decline of 15%.

Courtesy: Angel Commodities



NCDEX pepper edges lower on profit booking

Black pepper traded firm in the early part of the session but profit booking towards the later part of the day led prices to settle 0.20% lower on Friday. Spot prices however, ended firm on account of demand from local buyers yesterday. Reports of lower pepper crop in India in 2011-12 are expected to support pepper prices.

Pepper stocks with Vietnam are expected to be around 10 thousand tonnes while that in India is expected to be 12-15 thousand tonnes.

Indian parity in the international market was at $7,450-7475(c&f) a tone and remained competitive and was attracting overseas orders while Vietnam 550 gl was quoting its pepper at $7,350 per tonne (fob).

Exports from the major countries
According to Spices Board of India, exports of pepper during April 2011- September 2011 stood at 11,250 tonnes as compared to 9,250 tonnes in 2010-11, rise of 22%.

According to International Pepper Community (IPC) exports of black pepper during January to September 2011 exports of pepper from six major exporting countries (Brazil, India, Indonesia, Malaysia, Vietnam and Sri Lanka) was around 188,000 mt, 4% lower from the corresponding period of 195,000 mt. Vietnam has reportedly sold 1.12 lakh tonnes of pepper from January to September 2011 a rise of 14% as compared to previous year.

Sharp fall of 38% in pepper exports was witnessed in Indonesia during above period. Exports stood at 26,300 tonnes as compared to 42,082 tonnes in the last year.

During Jan to Oct 2011, Brazil exported 25,331 tonnes of pepper a rise of 4.74% as compared to previous year. U.S. remained the major destination of the pepper imports.

Production and Arrivals
Arrivals of pepper in the domestic mandi on Friday stood at 10 tonnes as compared to 12 tonnes on Thursday. Offtakes on the other hand stood at 15 tonnes.

Global Pepper production in 2012 is expected to increase 7.2% to 3.20 lakh tonnes as compared to 2.98 lakh tonnes in 2011 with sharp rise of 24% in Indonesian pepper output and in Vietnam by 10%. Pepper production in Vietnam and Indonesia is projected at 1.10 lakh tonnes while that in Indonesia is projected to be 41 thousand tonnes. (Source: Financial Express).

On the other hand production of pepper in India in 2011-12 is expected to be scale down further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year.

Courtesy: Angel Commodities


NCDEX soybean weakens on subdued demand

NCDEX December soybean futures continued to trade lower on account of fragile demand from solvent extractors and stockists. Further, reports of higher area under oilseed cultivation added bearish tone to the price trend. Rabi Oil seed sowing is up 0.6% at 7.08 million hectares. Total arrivals of soy bean in the domestic market stood at 4.50 lakh tons on Friday.

China’s negative manufacturing data also added bearish market sentiments. USDA’s weekly export sales released on Friday (December 01, 2011) which shows that the weekly export sales for soybeans came in at 489,600 tonnes which was below trade expectations. Meal sales were 135,500 metric tonnes, in line with expectations. Sales of 99,000 metric tonnes are needed each week to reach the USDA forecast. Oil sales were 8,900 tonnes, in line with expectations

Mustard Seed
NCDEX December RM Seed futures witnessed short coverings and settled 0.10% higher on account lower area under RM Seed by 2.63% to 56.60 lakh hectares. Rape/mustard seed accounts for about 70% of India's winter-season oilseed output. Sharp decline in vegetable oil also added bearish market sentiments.

As of December 02, 2011, sowing acreage of Mustard Seed increased to 56.60 lakh hectare (down by 2.5%) as compared to 58.1 lakh hectare last year till date. Sowing acreage of RM seed declined in India mainly due to lower sowing acreage in Rajasthan. However, Area under groundnut (1.89 vs 2.18 lakh ha), sunflower (2.31 vs 2.99 lakh ha) and safflower (1.57 vs 1.99 lakh ha) is declined slightly. Overall Rabi oilseed declined marginally to 65.68 lakh ha as compared to 65.94 lakh hectares.

Refine Soy Oil
NCDEX December refined soy oil futures settled lower on account of appreciation of Indian Rupee against US dollar. Crude palm oil price were quoted $1,000/tonne C&F Mumbai on Thursday as compared to $985/tonnes Wednesday.

India won't hike the base price of imported refined edible oils immediately to prevent any price rise in the local market. India levies a 7.5% import tax on refined oil, but the duty is calculated on the basis of base prices fixed by the government and not the market price. Imports of crude edible oil are tax-free. As per SGS ( a cargo surveyor), Malaysia's palm oil exports during the November 1-25, declined to 1.34 million tons, down 1.7% as compared with 1.37 million tonnes during the October 1-25. Crude palm oil price were $990/tonne C&F Mumbai on Monday vs $995/tonne on Friday.

India’s Vegetable Oil Imports:
According to Solvent Extractors Association of India, India’s import of vegetable oil in the month of October 2011 was 8.78 lakh tonnes, up 12% as compared to 7.81 lakh tonnes in October 2010. However, from November 2010 to October 2011 (Oil Marketing year), India’s import of vegetable oil was 83.71 lakh tonnes, fell more than 5% as compared to last edible oil marketing year of 88.23 lakh tonne.

Courtesy: Angel Commodities


NCDEX sugar settles lower on cane crushing

Sugar spot as well as futures settled lower 0.75% and 0.56% on Friday on release of higher free sale quota, extension of zero duty on Sugar and on ongoing crushing across India.

Government has released 19.1 lakh tonne (tn) of Sugar for the month of December which includes 2.07 lakh tn of levy quota, 17 lakh tn of non levy quota and 600 tn of Sugar refined from imported raws.

December Non levy sugar quota has been set higher compared to last year's 15 lakh tn to avoid surge in prices after the stock limit lapse and export permission.

Government has extended Zero duty on sugar imports till March 2012 to tame inflation.

U.P sugar mills have produced 4.79 lakh tonnes of sugar till 29th November 2011, 3.39 lakh tonnes higher as compared to last year.

However recovery is lower this year.
ICE Raw Sugar LIFFE white Sugar futures settled 0.59% % and 0.58% lower on supply pressure amidst commencement of crushing in Thailand and India.

The Brazilian white Sugar prices are ruling around $ 659/tonne (FOB) as on December 01, 2011 compared to $630/tonne (FOB), in the previous week. Current offer price stands at Rs 34,260/tonne in Rupee terms compared to current domestic price of Rs 31,050 /tonne (FOB).

Domestic Sugar updates
According to ISMA, India is likely to have crushed 14.4 mln tn cane during Oct 1-Nov 23 and produced 1.3 mln tn sugar during the current crushing season. Output in Maharashtra during Oct- Nov 2011 period is lower at 9.11 lakh tn as compared to 9.73 lakh tn in the last year.

Indian Sugarcane production is estimated higher by 0.9% at 342 mn tn for 2011-12 season starting October 1, 2011. ISMA has projected sugar production at 26 million tonnes for 2011-12.

With the opening stocks of 6 mn tn, domestic Sugar supplies are estimated at 32 mn tn against the domestic consumption of around 23 mn tn. Thus there is a wide scope for exports from India.

Global Sugar Updates
Thailand sugar output could reach to 9.9 million tonnes in 2011-12 compared to 9.64 million tonnes in 2010-11.

According to UNICA, Sugar output in Brazil's center-south in the first half of November fell 13.8 percent from a year ago, as more mills ended crushing the 2011/12 cane crop. Sugar production in the period totaled 1.26 million tonnes, compared with 1.46 million tonnes a year earlier.

China, the world's largest sugar consumer, has imported 1.6 million tons of sugar in the first 11 months of 2011, with preliminary data for the full year likely to be issued around October 10.

Courtesy: Angel Commodities


NCDEX chana slumps on higher acreage

Chana futures settled 3.71 lower on Friday on reports of higher acreage under Chana and Pulses cultivation.

According to the latest report by Ministry of Agriculture, pulses have been sown in 114.1 lakh hectares as on 2nd December 2011, up 2.4% as compared to 111.5 lakh hectares in the same period last year.

Area sown under Chana in India till 2nd December 2011 was 75.9 lakh hectares (lh) as compared to 73.9 lh in the same period previous year.

In UP, sowing of Masoor is lagging behind (down by 18% to 4.57 lakh ha.) while Chana and peas is up by 8 and 18% to 8.1 and 3.84 lakh ha respectively.

In Rajasthan, as per the current pace of sowing and favourable weather it looks that sowing of Chana may cross the set target of state agriculture department of 17 lakh ha. So far Chana is sown in 15.08 lakh ha against 11.8 lakh ha sown in the same period last year.

Currently, imports from Australia are viable. Cost and Freight (C & F) quote declined marginally by $20 per MT to $630/MT. Thus, fresh import contract may execute in the coming weeks due to import parity. Landed cost currently stands at Rs 32130 / tn against domestic price of Rs 34100 / tn in Mumbai.

Sowing progress and Production
Indian government is targeting total pulses output of 17 mln tn in the current crop year that started July 2011, down marginally from last year's record production of 18.09 mln tn on account of 10% decline in Kharif Pulses output.

However, Rabi Pulses output Is estimated higher on higher area and conducive weather

Chana is the main Rabi Pulse crop grown in India, sowing of which is done during October-December, and harvesting begins in January. If the sowing trend is maintained India may witness another bumper crop of Chana in the coming season.

According to the first advance estimates, Kharif Pulses output for 2011- 12 season is down by 9.6% at 6.43 mt. Tur output estimates is up by 0.35% while moong & Urad is down by 21% & 16% respectively. Kharif Pulses sowing is down by 9% as on 23rd September, 2011. 109.41 lakh ha has been covered against 120.3 lakh ha in the last year.

Courtesy: Angel Commodities


NCDEX guar seed surges on lower output

Guar seed and Guar gum futures which witnessed profit booking on Thursday settled at 4% upper limit on Friday on expectations of higher demand amidst lower output.

Arrivals of late sown Guar crop has started across Churu, Bikaner and other growing areas of Rajasthan and thus arrivals have increased in the last 2-3 days and stands around 1.30 lakh bags.

Weaker rupee is seen gearing up exporter’s profit margin. However, export demand may hit to some extent amidst higher prices and weaker rupee.

On the back of record high exports, the exports federation has urged the Government to withdraw export promotion incentives and impose export duty on guar seeds. If Government considers the removal of export incentive and imposes export duty exporters profit margin will be reduced.

Traders believe that if India considers imposition of export duty countries like China would be forced to roll back import duty on Guar gum powder and splits and this may benefit India in the long run.

Production
Guar seed output in Rajasthan is estimated at 11.36 lakh tonnes for 2011-12 season compared to 15.46 lakh tonnes in 2010-11 (Rajasthan Farm Dept).

Production of Guar in Haryana and Gujarat is expected to be 0.2 lakh tonnes and 0.07 lakh tonnes respectively in 2011-12.

However, there are unconfirmed reports that Guar seed output may be lower around 10 lakh tonnes compared to the government target of 11.3 lakh tonne due to excess moisture in the soil during the sowing period.

Exports
According to Agriculture and Processed Food Products Export Development Authority, Indian Guar gum exports for the period April- March 2010-11 surged by 84% and stood at 4,03,007 tonnes as compared to 2,18,473 tonnes during the last year.

Exports of Guar gum from April to July of the current fiscal year 2011-12  stood at 1.93 lakh tn a rise of 82% compared to 1.02 lakh tn during the same period last year.

Export figures clearly indicate that global crisis has not hit Guar exports as of now in the current season too. In fact rupee has increased profit margin of the exporters in the current season.

Courtesy: Angel Commodities