Daily Report of International Spice Commodities
Pepper futures edged higher on slight improvement in buying sentiments. Spot prices remained steady and traded near Rs 27000 per quintal. Spot prices in kroog area traded within a range of Rs 25700 to 26500 per quintal. International price for MG1 traded within a range of $6200 to $6350 per ton and except MG1 grade, prices of all other origins increased. Arrivals were reported in Indonesia and Malaysia and as per media reports production expectation from these countries are not encouraging. As per IPC estimates the production in Indonesia is expected around 37000 tons while that of Malaysia and Brazil were expected near 25000 tons and 34000 tons respectively. Harvesting in Brazil is expected to start from August onwards. However Vietnam decision to increase the export quota can increase the supply in international market. Vietnam had already exported 54480 tons of pepper which is expected to be half of its yearly production.
Cumin futures turned lower on slowdown in demand. Arrival in the spot market had shown a declining trend due to the arrival of monsoon in the major production belts. High moisture content can erode the quality of Cumin and this can create more hurdles in arrivals to physical market. Spot prices remained weak and traded near Rs 13000 per quintal. Fresh arrivals were reported near 5000 bags compared with 4000 bags in the previous day. Syrian and turkey crop is expected to reach in the international market on mid of July onwards. As per media quotes, overseas demand from Bangladesh as well as middle east is expected to increase in near future. And the reported poor quality produce from Syria will give more competitive edge to Indian cumin seed in the international market.
Turmeric futures escalated on robust demand prospects. More demand from North Indian buyers and bulk dealers supported the sentiments. According to farmers any prices below 8000 per quintal will not cover up the cost due to high labor cost. Lower prices in the physical market and below normal rainfall prediction from IMD augmented the worries of the farmers. As per the last update, Spot prices in Nizamabad traded near Rs 7600 per quintal and fresh arrival were reported near 2000 bags compared with 2500 bags in the previous day. Spot prices in Erode traded near Rs 8000 per quintal and arrivals were reported near 8200 bags. According to media quotes, more promising business is expected only from August onwards.
Cardamom futures ended with marginal loss on increased arrivals. Favorable climate in the growing region also supported to sentiments. However upcoming festival demand especially Ramdhan is expected to increased the demand in near future. And more demand from East Asian countries is expected during this period. According to last updates, average spot prices improved and traded near 659.21 per ton and arrivals are reported near 13 tons compared with 58 tons previous day. According to trade estimates production in India is slightly higher than 11000 tons. As per the estimates of spices board the production in Guatemala expected near 20000 tons. As per media sources , total arrivals during the current season from August 1 to June ,2011, stood at 10856 tons which is approximately six percent higher than last year arrivals.
Chilli futures cascaded on poor demand as well as higher arrival in the physical market. As per media sources, improvement in overseas demand from Srilanka, Thailand and Malaysia limited the downside. As per last update, spot market prices traded near Rs 8200 per quintal and fresh arrivals were reported near 40000 bags compared with 35000 bags in the previous day. As per market sources, total stock in Guntur is expected around 47-48 lakh bags, out of this quality produce is expected around 30-35 lakh bags. As per Andhra Pradesh government estimates as quoted in the media, the Chilli sowing shows a declining trend and major production belts received moderate rainfall. It is 17 percent less than previous year.
Coriander futures escalated on improved demand scenario. Spot prices in Kota traded near 4550 per quintal and total arrivals were reported near 6000 bags compared with 7000 bags in the previous day. Usual arrivals season starts from February and extend till May end. Total carryover stocks has been estimated 25-30 lakh bags. As per trade sources estimation, production is expected around of 60-65 lakh bags due to lower acreage of cultivation. Erratic weather condition during the sowing period had decreased the acreage under cultivation.
SPECIAL REPORTS (Business Line)
Flood of arrivals pulls turmeric down
ERODE Crop: Spot turmeric prices decreased because of heavy arrivals.
“Because of the increased arrival of spot turmeric on Wednesday, the price of the yellow spice has decreased slightly. But sales were very encouraging. Buyers obtained orders for hybrid variety, purchased heavily on Tuesday. Enthused by the heavy sale, more hybrid varieties arrived for sale. But the prices of the hybrid varieties have decreased by Rs 250 a quintal,” President of Erode Turmeric Merchants Association, Mr R.V. Ravishankar, said.
More than 10,000 bags of turmeric arrived for sale, 6100 bags were sold. The price of spot turmeric increased around Rs 150 a quintal in Gobichettipalayam Agricultural Cooperative Marketing Society. Only half of the stock of hybrid variety was sold. Farmers have taken back the rest, said Mr Ravishankar.
At the Erode Cooperative Marketing Society, sales were encouraging as 90 per cent of the turmeric that arrived were sold. The price was slightly increased by Rs 50 a quintal. At the Regulated Marketing Committee, the prices improved by Rs 100 a quintal, and 90 per cent of the stocks were sold.
Mr Ravishankar said that the prices may prevail till August. Prices in other markets did not increase. Price in the futures market also remained unchanged. At the Erode Turmeric Merchants Association’s sales yard, finger variety was sold at Rs 5,603 to Rs 7,915 a quintal, root variety at Rs 5,055 to Rs 7,175 a quintal.
Salem Crop: Finger variety was sold at Rs 7,330 to Rs 8,466 a quintal, root variety at Rs 6,895 to Rs 7,401. Totally 2,092 bags arrived for sale, 495 bags were sold.
At the Gobichettipalayam Agricultural Cooperative Marketing Society, finger variety was sold at Rs 5,859 to Rs 8,010 a quintal, root variety at Rs 5,319 to Rs 7,299. Out of 261 bags arrived for sales, 135 bags were sold. At the Erode Cooperative Marketing Society, finger variety was sold at Rs 6,860 to Rs 8,070 a quintal, root variety at Rs 6,363 to Rs 7,269. Out of arrival of 1,263 bags, 1,132 bags were sold. At the Regulated Marketing Committee, finger variety was sold at Rs 7,451 to Rs 8,189 a quintal, root variety at Rs 6,899 to Rs 7,220. Out of 700 bags kept for sale, 623 bags were sold.
Fresh export demand lifts Cumin
New export demand and a pick-up in local demand lifted Cumin prices on Tuesday. Lower arrivals aided rising prices.
July contract on the National Commodity and Derivatives Exchange gained Rs 161 to Rs 14,265 a quintal, with an open interest of 5,001 lots. August contract increased by Rs 182 to Rs 14,748 a quintal, with an open interest of 19,584 lots.
Cumin rose by Rs 20-25 to Rs 1,845-3,112 for 20 kg in the spot market in Unjha. It traded at Rs 2,100-2,652 for 20 kg in Rajkot. Higher local demand and new export demand triggered bargain-buying, said Kedia Commodities. 4,000-5,000 bags arrived. Support for Cumin is at Rs 14,569. Below that, it could be tested at Rs 14,389. Resistance is now seen at Rs 14,939. Above that, it could see a resistance at Rs 15,129.
Production in Syria and Turkey is likely around 45,000 tonnes, down almost 10,000 tonnes from earlier estimates, perhaps because of inferior quality of produce in these countries.
Production in the current season is likely to be around 21 lakh bags of 60 kg each against 28 lakh bags in the past year, as sowing acreage has declined sharply in Gujarat. Weak export demand restricted gains. According to the latest release from the Spices Board of India, during April-March 2010-11, exports dropped by 35 per cent to 49,250 tonnes.
Cardamom futures moves up on fresh buying
Cardamom prices moved up by Rs 9.20 to Rs 805 per kg at the futures trade today as speculators created fresh positions, driven by a pick-up in demand at the spot market.
At the Multi Commodity Exchange, cardamom for delivery in July moved up by Rs 9.20 or 1.16 per cent to Rs 805 per kg with a business turnover of 192 lots. Similarly, August contract gained Rs 7 or 0.83 per cent to Rs 852.50 per kg in 263 lots.
Analysts said fresh positions created by speculators on the back of a pick-up in demand mainly led to the rise in cardamom futures prices.
Turmeric gains colour on fresh buying
Turmeric prices rose by Rs 30 to Rs 7,590 per quintal in futures today on fresh buying by traders amid a pick-up in spot market demand. At the National Commodity and Derivatives Exchange, turmeric for delivery in August rose by Rs 30 or 0.40 per cent to Rs 7,590 per quintal with an open interest for 7,550 lots.
Similarly, the spice for delivery in July edged up by Rs 24 or 0.30 per cent to Rs 7,900 per quintal, with a trading volume of 7,848 lots. Analysts said fresh buying by traders on improved demand in the spot market mainly helped turmeric futures prices to rise.
Pepper gains on tight supply
Pepper prices rose by Rs 217 to Rs 27,615 per quintal in futures trade today as speculators created fresh positions on the back of rising demand in the spot market. The sentiment turned better amid low arrivals as farmers held on to their produce in anticipation of better prices in coming days.
At the National Commodity and Derivatives Exchange, pepper for delivery in August rose by Rs 217 or 0.79 per cent to Rs 27,615 per quintal with an open interest for 5,420 lots. Similarly, the spice for delivery in July was trading higher by Rs 198 or 0.74 per cent at Rs 27,097 per quintal in 5,657 lots.
Analysts said besides fresh buying by speculators, less arrivals in the spot market from producing belts mainly pushed up pepper futures prices.
India’s coffee exports up 55% to 40,000 tonnes in June
Buoyed by robust global demand, the country’s coffee exports jumped by almost 55 per cent in June this year to 40,000 tonnes. Shipments of the brew totalled 25,710 tonnes in the corresponding month a year ago, according to data released by the Coffee Board.
“The export of coffee in the month of June is around 40,000 tonnes,” a coffee board official told PTI. Shipment of coffee in June was low when compared with exports in April and May, the official added. Compared to exports of the brew in May, shipments of coffee were down almost two-fold in June. India exported 80,367 tonnes of coffee in May 2011. Likewise, exports in June were down by 6 per cent compared to April this year. Exports in April stood at 42,611 tonnes.
“The downturn (coffee exports) was expected. Coffee exports have been down due to low carry—over stock and a drop in global prices, as the new crop has started to hit the market,” All-India Coffee Exporter’s Association President, Mr Ramesh Raja, said.
Coffee exports grew in the January-May, 2011, period as India took advantage of global demand opportunities following production shortfalls in major growing countries Brazil and Columbia, he noted. In the January-May 2011 period, exports of the brew were up by 43 per cent at 1,81,308 tonnes, compared with 1,27,160 tonnes in the same period of the previous year.
India largely exports coffee to Italy, Germany, Belgium, the Russian Federation and Spain.
Cardamom eases on increased arrivals
The cardamom market ruled nearly steady with the trend being a little easy last week on increased arrivals at the auctions. However, continued covering by exporters kept the prices nearly steady, according to trade sources.
Nearly 70 per cent of the arrivals at the auctions were from the new crop and the rest from the previous crop. Demand is for new crop. However, arrival of 8mm bold capsules was at around 10 per cent only, they said. Trade sources in Bodinayakannur told Business Line that 8 mm bold good colour was fetching Rs 1,100 a kg Tuesday.
The individual auction average, which was vacillating between Rs 700 and Rs 750 a kg at the auctions held in Kerala and Tamil Nadu during last week, has dropped to Rs 665 a kg at the CPA auction on Monday held in Bodinayakannur, because of the inferior quality of the material, they said.
Arrivals at the Sunday auction conducted by the KCPMC in Kumily declined to 58 tonnes from 76.5 tonnes on the previous Sunday, Mr P.C. Punnoose, General Manager, CPMC, told Business Line. He expected arrivals of the new crop to increase in the coming days as the picking progressed.
Exporters, he said, were actively covering while north Indian buyers were also buying but in small quantities. Exporters estimated to have bought about 60 tonnes last week. Weighted average price as on July 10, was at around Rs 1,004 a kg, as against about Rs 870 a kg same day last year. Prices in Kumily for graded varieties in Rs/kg were: AGEB 900-950; AGB 750-770; AGS 695-725; and AGS 1: 670-690.
The Indian rupee opened up on the back of a broad based Dollar weakness. The profits in the domestic stock market coupled with gains in other Asian currencies further added to rise in the Rupee. USD/INR pair closed at 44.52 compared to 44.70 yesterday.
The 6-month and 1-year forward premium closed at 6.11% and 5.28% respectively against 5.96% and 5.14% yesterday.