International Spice Commodities Update – August 29, 2011

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Daily Report of International Spice Commodities

Pepper futures ended with marginal gains on profit booking. Broad positive sentiments continued to support the  prices  from falling due limited supply in international market. Usually September and October period is good international business since Europe and US winder consumption will be support the demand. Spot prices remained steady at  trade near Rs 31300 per quintal. As per traders opinion quoted in media, domestic demand not much encouraging as expected. Karnataka region continued to cater most  of the domestic demand. According to IPC the world pepper production in 2011 is estimated near 310000 tons and the projected demand is expected near 330000 tons. Arrival in Indonesia Lumpung region had almost completed and more clarity in stock and arrival will only received after Ramadhan holidays. International prices for MG1 grade traded near $7150 per ton  and prices in Vietnam and brazil continued to remain firm.

Cumin futures edged higher on spot demand. Expectation of Overseas demand from Middle East and South America  is expected to support prices. Spot prices traded near Rs 14500 per quintal and arrivals in the spot market were reported at 5000 bags compared with 6000 bags in the previous day. Poor weather conditions in other producing countries Turkey and Syria will support the price rise. There is also likelihood of delay in the arrivals from these countries. As per  media sources, cumin cultivation in Gujarat estimated near 65.77 lakh hectares compared with 87 lakh hectares in the previous year same period. And the reported poor quality produce from Syria will give more competitive edge to Indian cumin seed in the international market.

Turmeric futures consolidated with tight range and  increased buying interest in the counter supported against the underlying bearish mood. Nizamabad spot market traded near 6100 per quintal and arrivals were reported near 1200 bags against 400 bags in the previous day. Spot prices in erode traded near Rs 5500 per quintal and arrival were reported near 6000 bags. Sowing in Andhra Pradesh had picked up since monsoon shower in the past weeks created ideal condition for cultivation. As per Reuters, farmers had cultivated turmeric on  54000 hectares against 58000 hectares in the previous year. Production in 2010-11 is estimated near 70 lakh bags compared with 48 lakh bags in the previous day.

Cardamom futures cascaded on higher stocks availability Upcoming festival demand is expected to increase in near future and more procurement is expected from North  India. According to last updates, average spot prices remained weak and traded near 537.13 per kg and arrivals are reported near 89 tons compared with 74 tons previous day. According to trade estimates production in India is slightly higher than 12000 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 July ,2011, stood at 12973 tons which is approximately 32 percent higher  than last year arrivals.

Chilli futures edged higher on bargain hunting followed with short covering efforts. Spot market in Guntur in Andhra Pradesh traded near Rs 8000 per quintal and arrivals were reported near 20000 bags compared with 25000 bags in the previous day. Last week Andra Pradesh region had received good monsoon showers which can augment the cultivation acreage. As per media quotes, present area under cultivation had dropped by 30.19 percent to 0.37 lakh hectares in Andhra Pradesh. Meanwhile sowing was almost completed in some parts of Madhya Pradesh. 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. Monsoon is crucial for better chilli cultivation.

Coriander futures edged lower on low demand prospects. Spot prices remained closed on local mandi elections. Total carry over stocks has been estimated 25-30 lakh bags. Erratic weather condition during the sowing period had decreased the acreage under cultivation. As per Ncdex reports, Coriander production in 2010-11 is estimated to be around 2.8-3 lakh MT. And for the year, 2010-11, India exported 40500 MT.


Pepper futures up on thin supply

Pepper prices rose by Rs 70 to Rs 34,306 per quintal in futures trade today on the back of a pick-up in spot market demand amid tight supply availability. At the National Commodity and Derivatives Exchange, pepper for delivery in November rose by Rs 70 or 0.20 per cent to Rs 34,306 per quintal, with an open interest for 310 lots.

Similarly, the spice for delivery in September gained Rs 21 or 0.06 per cent to Rs 33,249 per quintal, with a trade turnover of 7,595 lots. Analysts said a pick-up in spot market demand and restricted arrivals from producing belts helped pepper prices to trade higher in futures trade.

Cardamom futures fall on weak spot demand

Cardamom prices fell by Rs 22.40 to Rs 793.10 per kg in futures trade today as speculators reduced their positions amid a weak trend in the spot market on sluggish demand. At the Multi Commodity Exchange, cardamom for delivery in November fell Rs 22.40 or 2.75 per cent to Rs 793.10 per kg, with a business turnover of 64 lots.

Similarly, the spice for September contract delivery lost Rs 16.10 or 2.22 per cent, to Rs 707.70 per kg in 307 lots. Marketmen said offloading of positions by speculators in tandem with subdued demand in the spot market and adequate stock availability mainly led to the fall in cardamom futures prices.

Spot pepper hits new high of Rs 305/kg

Pepper futures on Monday continued their northward run on reports of limited availability in the global market and reports of a firm Vietnam market. Vietnam has reportedly quoted 500 GL at $6,900-$7,100 a tonne (f.o.b.) and the Asta grade at $7,700-$7,800 a tonne. White pepper ruled at $9,800 a tonne.

All the contracts moved up. Spot prices hit the highest-ever price of Rs 305 a kg for ungarbled and Rs 315 a kg for MG 1.

The market was volatile as usual and touched the lowest price of the day in the opening and forenoon sessions but in the afternoon hit the highest price and declined to close above the previous day close.

There was liquidation in September, switching over in October and additional buying.

Given the sharp rise, buyers all over the world are said to be nervous, market sources told Business Line. September contract on the NCDEX increased by Rs 245 a kg to close at Rs 33,473 a quintal. October and November contracts moved up by Rs 279 and Rs 277, respectively, to close at Rs 34,129 and Rs 34,513 a quintal. Total turnover went up by 313 tonnes to 7,412 tonnes. Total open interest moved up by 183 tonnes to 11,786 tonnes.

September open interest dropped by 465 tonnes to 7,133 tonnes, while that of October and November increased by 605 tonnes and 40 tonnes, respectively, to 4,116 tonnes and 352 tonnes.

Spot prices rose by Rs 200 on buying support to close at Rs 30,500 (ungarbled) and Rs 31,500 (MG 1) a quintal. Indian parity in the international market moved up further to $7,550 -$7,600 a tonne (c&f) and remained competitive, they said.

Cardamom crashes below Rs 600/kg on heavy arrivals

KOCHI: Cardamom prices crashed last week on heavy arrivals at auctions held in Kerala and Tamil Nadu. Individual auction average dropped to below Rs 600 to around Rs 540 a kg, probably the lowest average during the current season, as supply outstripped demand. The declining trend in the market has made the buyers to slow down purchases, hoping prices would fall further.

Quality cardamom arrivals were around 30 per cent and much of the material arrived were of average quality, market sources in Bodinayakannur toldBusiness Line. Arrival of 8 mm bold colour capsule was of negligible quantity. “Non-arrival of good quality material coupled with heavy arrivals led to the price fall,” they claimed.

Non-availability of sufficient workers to handle the huge quantity every week is also affecting the trade, they said. Torrential rain in the high ranges is creating problems, they pointed out.

According to the market sources, a regulated release of the material by the growers as a market intervention exercise could only arrest the current downward trend in the prices. “They should retain at least one-third of their output till the market stabilises,” they said. Exporters were not active, but they are expected to enter the market after the Eid holidays, they said.

At the Sunday auction conducted by the KCPMC, arrivals soared to 89 tonnes from 74 tonnes last Sunday, Mr P.C. Punnoose, General Manager, CPMC, told Business Line. The maximum price was at Rs 920.50 a kg, while the auction average dropped to Rs 537.13 a kg from Rs 614.19 a kg the previous Sunday. Total arrivals have gone up to about 465 tonnes of which there was a withdrawal of around 15 tonnes last week.

Despite low sales, turmeric remains steady

ERODE: On Monday, spot turmeric sales were very low. “The sales of turmeric in the four markets were very low for want of upcountry demand for the commodity. But the prices continued to remain at last week’s level”, said R. K.V. Ravishankar, President, Erode Turmeric Merchants’ Association.

He said that because of the low price in other turmeric sales centres, such as Nizamabad and Sangli, the prices in Erode market did not improve. But both traders and turmeric growers are expecting large orders from North India next month. They say that the quality of Erode turmeric is better than in other producing areas . He said after that the prices of both varieties of turmeric may increase by Rs 500-750 a quintal.

The bulk buyers said that though around 5,600 bags of turmeric arrived for sale on Monday, only 35-40 per cent of them were sold. Now they are buying to meet one or two small orders received by them from other States. But the prices in the Regulated Marketing Committee were reduced by Rs 175 a quintal over quality issues.

At the Erode Turmeric Merchants’ Association Sales Yard, the finger variety fetched Rs 4,599-5,757 a quintal, and the root variety, Rs 4,229-4,911. FINGER, ROOT VARIETIES  The finger variety sold at Rs 5,569-6,621 a quintal, and the root variety, Rs 4,766-5,311. Totally, of the 1,847 bags that arrived, 412 bags were sold.

At the Gobichettipalayam Agricultural Cooperative Marketing Society, the finger variety sold at Rs 4,246-5,760 a quintal, and the root variety, at Rs 3,160-5,269. All the 280 bags kept for sales were sold. At the Erode Cooperative Marketing Society, the finger variety fetched Rs 4,218-5,809 a quintal, and the root variety, Rs 4,009-5,220. Of the 998 bags kept for sales, 915 bags were sold. At the Regulated Marketing Society, the finger variety ruled at Rs 5,299-5,931 a quintal, and the root variety, Rs 4,689-5,149. All the 653 bags kept for sales were sold

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