International Spice Market Update – August 09, 2011

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Daily Reports of International Spices

Pepper futures consolidated with slight negative bias due to the lack of fresh triggers in the counter. Spot market prices traded near Rs 28700 per quintal. Overseas demand expected to increase during this period due to upcoming Christmas and winter consumption. However slowdown in economy due to sovereign debt crises in US and Europe the two major consumers of pepper will asperse the demand prospects. The domestic consumption is expected to increase in the near future since the festival season in India is expected to boost up the demand. International prices for MG1 traded near $6600 and firm up of prices in other regions had narrowed the price spread. Dollar recovery against rupee had given more comfort to the exporters. And Vietnam had already exported 79600 tons in last seven months which is approximately less than 5 percent compared the previous year same period.Spot turmeric drops on heavy arrivals, lesser demand.

Cumin futures cascaded due to the slowdown in demand and increased arrival in the physical market. Spot prices traded weak at Rs 13500 per quintals and arrivals were reported near 6000 bags against 9000 bags in the previous day.    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. As per traders view, theprocurement for Ramadhan demand had already reached the end phase. Syrian and turkey had already started reaching the international market and the expected total output near 45000 tons. And the reported poor quality produce from Syria will give more competitive edge to Indian cumin seed in  the international market.

Turmeric futures plunged on higher arrivals as well as slow down in demand in the physical market. Spot prices  in Nizamabad trade near Rs 6800 per quintal and arrival were reported at 1600 bags compared with 2000 bags in the previous day.  Spot market in Erode traded near 6500 and arrivals stood at 10000 bags compared with 12000 bags in the previous day. However demand is expected to improve from August onwards due to upcoming festival season in India. As per media, current stock position was reported near 42 lakh bags, which is 20 percent higher than the previous year figure. Production in 2010-11 is estimated near 69 lakh bags compared with 48 lakh bags in the previous day. Crop cultivation is started in some parts of Andhra Pradesh, Maharashtra and Tamil nadu.

Cardamom futures surged on bargain hunting followed with short covering. According to last updates, average  spot prices remained weak and traded near 549.96 per ton and arrivals are reported near 24 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 escalated on buying interest in the  counter. The scardity in rainfall in main growing areas also supported the sentiments. However persistent higher arrivals in the physical market continued limited the upside. Spot market prices traded near Rs 8600 per quintal and fresh arrivals  were reported near 30000 bags compared with 25000 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. Monsoon is crucial for better chilli cultivation.

Coriander futures cascaded on profit booking in the counter.  Spot prices in Kota traded near 5500 per quintal. Total arrivals were reported at 8500 compared with 11000 bags in the previous day.  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.

SPECIAL REPORTS (Business Line) 

Spot turmeric drops on heavy arrivals, lesser demand

 Erode Crop: Spot turmeric price dropped below Rs 6,000 a quintal on Tuesday as arrivals continue to flood markets. “The turmeric farmers were totally disturbed over the fast decreasing price of turmeric, and on Tuesday the commodity was selling at Rs 6,000 and below per quintal. This unbearable decrease is due to the heavy arrival of the turmeric and also no demand from North India,” said Mr R.KV. Ravishankar, President, Erode Turmeric Merchants Association. Out of arrival of 9,500 and odd bags 30 per cent of the stocks were sold.


He said, “For the past couple of days in the turmeric futures, prices are quoted very low and the price in other markets like Nizamabad and Sangli are very low. This has reflected in Erode and the buyers are quoting Rs 6,000 and below per quintal.”

FIRST TIME IN 2 YEARS: For the first time in the last two years, the turmeric price declined to Rs 5,659/ quintal in Regulated Marketing Committee. The turmeric farmers were dejected over the price and few of the farmers confirmed the Tuesday price, sold their produce, remaining has taken back their turmeric to their villages.

The farmers said the Tuesday price is the lowest price experienced by them during this year. Some farmers said they are expecting the prices to go up in September, when they will sell their turmeric.

But the traders said only Rs 200-400/ quintal increase will be in September and the prices will not touch Rs 7,000/ quintal till the end of this year, as they said that all the turmeric farmers are having abundant stocks, and also in the next year they are expecting heavy production.

In Erode Turmeric Merchants Association, the turmeric decreased by Rs 550/ quintal, in Regulated Marketing Committee, the turmeric decreased by Rs 687/ quintal. In Erode Cooperative marketing Society and Gobichettipalayam Marketing Society also the turmeric showed a decrease of more than Rs 300/ quintal.

At the Erode Turmeric Merchants Association Sales Yard, finger variety was sold at Rs 4,299-5,899/ quintal, root variety Rs 4,001-5,466/ quintal.

Salem Crop: Finger variety was sold at Rs 6,039-6,819/ quintal, root variety Rs 5,176-5,696/ quintal. Totally 2,364 bags arrived for sale, 398 bags were sold.

At the Gobichettipalayam Agricultural Cooperative Marketing Society, finger variety was sold at Rs 4,699-6,096/ quintal, root variety Rs 3,336-5,590/ quintal. Out of 443 bags, kept for sales 423 bags were sold. In the Erode Cooperative Marketing Society, finger variety was sold at Rs 5,096-6,096/ quintal, root variety Rs 4,900-5,689/ quintal. Out of 1,388 bags kept for sales, 1,299 bags were sold. At the Regulated Marketing Committee, finger variety was sold at Rs 4,811-5,659/ quintal, root variety Rs 4,704-5,389/ quintal. Out of 732 bags kept for sales, only 340 bags were sold.

Poor offtake, higher inflow dent Cumin

 Weak demand and high arrivals dragged down Cumin prices in spot and futures markets.August contract of Cumin on the National Commodity and Derivatives Exchange declined by Rs 424 to Rs 14,611 a quintal, with an open interest of 10,593 lots. September contract dropped by Rs 434 to Rs 15,050, with an open interest of 17,814 lots.

Spot Cumin traded at Rs 13,500-13,800 a quintal at Unjha mandi, down by Rs 200 a quintal. Quality Cumin remained at Rs 15,000-16,000 a quintal. While new arrivals surged to 4,000 bags from 6,000 bags on Monday, demand slipped to around 4,000 bags against 6,500 bags.

With arrivals rising, investors booked profits after Cumin prices rose during July-end, Mr Ajay Kedia of Kedia Commodities said. Spot demand will remain weak this month and futures prices may also remain under pressure, he added. While exports slumped by 46 per cent to 5,750 tonnes, their value dipped by 36 per cent to Rs 7,560 lakh during April-June 2011. Foreign-exchange revenue from exports of spices and spice products during April-June 2011 registered a rise of 21 per cent even as tonnage declined by 26 per cent.

Mixed trend in pepper

 Kochin: The pepper market, after witnessing high volatility on Tuesday, showed a mixed trend at the close. The afternoon session saw the highest and lowest prices of the day. August and October futures moved up and closed marginally higher, while September slipped to slightly below the previous day’s closing.


There was liquidation in August and switching over and additional buying in September. Turnover also moved up. On the spot, good quantities were traded to different destinations at Rs 275 a kg of Wayand and Idukki pepper.

Overseas enquiries were poured in as the availability is said to be limited. Indian parity is also said to be competitive at present. Those overseas buyers who had delayed their purchases are now entering the market, trade sources toldBusiness Line.

DOMESTIC DEMAND: Domestic demand is also expected to pick up after the Raksha Bandhan next week, they said. August contract on the NCDEX moved up by Rs 43 to close at Rs 28,720 a quintal. September declined by Rs 36 to Rs 29,215 a quintal while October moved up by Rs 9 to close at Rs 29,637 a quintal.

Total turnover increased by 3,104 tonnes to 8,150 tonnes. Total open interest went up by 137 tonnes to 11,596 tonnes, showing additional purchasing.

Aug open interest fell by 397 tonnes, while that of September increased by 547 tonnes and October declined by 15 tonnes. Spot prices remained unchanged at previous levels of Rs 27,600 (ungarbled) and Rs 28,600 (MG 1) a quintal.

INTERNATIONAL MARKET: Indian parity in the international market was at $6,600-6,650 a tonne (c&f) and remained competitive, they said. Vietnam said to have quoted $5,200 a tonne (c&f) for 550 GL black pepper.





KochiCardamom prices fell sharply last week on heavy arrivals from the early new crop outstripping the demand at auctions held in Kerala and Tamil Nadu.

Weekly arrivals have soared to around 400 tonnes because of an early crop that is also good.

It has happened during the usual peak period of the season. It has affected the market sentiments in the country, market sources said.

Against arrivals of 86.5 tonnes of cardamom during the first week (August 1-7) of the last season (officially the season begins from Aug 1), it was at 405.16 tonnes in the same period this season.

Overseas buying: Such heavy arrivals during a lean period of the season have caused bearish sentiments in the market. Buying slowed down in the declining market. To make matters worse, some traders are allegedly sending SMS to north Indian buyers asking them to delay their purchases, claiming that the average price would fall to Rs 450 a kg, market sources told Business Line.

Export buying has slowed as major overseas buyers have stocked enough quantity for the Ramadan month, which is under way, they said.

Upcountry buyers were buying small quantities. Arrivals at the Sunday auction conducted by the KCPMC were 74 tonnes and the maximum price fetched was Rs 1,020 a kg and the minimum was Rs 430 a kg. Auction average dropped to Rs 578 a kg from Rs 693 a kg on the previous Sunday, Mr P.C. Punnoose, General Manager, CPMC, told Business Line.

He said that the upward trend in arrivals, of late, was not a favourable sign at present. Total arrivals during the current season up to August 7 stood at 405.1 tonnes against 86.5 tonnes in the same period the previous season. Sales during the period were at 393.7 tonnes and 86.2 tonnes, respectively. Weighted average price as on August 7, 2011, was at Rs 622.34 a kg, while that on the same day last year was at Rs 1,353.21 a kg.

“The demand-supply mismatch has pulled down the prices,” market sources in Bodinayakannur and Kumily said. Prices of all grades dropped at the auctions as well as in the open markets.

Prices in Kumily for graded varieties in rupees per kg were: AGEB Rs 860 -870; AGB 675-685; AGS 645- 655 and AGS 1: 595-605. Prices in the open market at Bodinayakannur (Rs/kg) were: AGEB (7mm) 840-850;AGB (6mm) 650- 660; AGS (5mm – 6mm) 630-640 and AGS 1: 575-585.

The weather conditions in the growing areas continued to remain good with the entire growing areas receiving sufficient rains. Given this situation “we can expect a super crop this season”, some of the traders in Kumily claimed.
















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