International Spice Market Update 06/10/2011

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Daily Reports of International Spice Commodities

Pepper futures continued to consolidate within a tight range since buyers and sellers waited for further directional cues in the counter. According to trade sources, international market continued to be dull and international price for MG1 grade trade near $ 6800 per ton. Spot market activities continued to be limited and spot prices traded near Rs 27500 per quintal. Kroog region continued to supply and prices trade near Rs 26200 per quintal.  Advent of monsoon can increase the moisture content in pepper and further decline in prices will pressurize the small farmers to capitalize the profits by liquidating some of their stocks. Harvesting had almost ended in India and Vietnam. However Indonesian crop is expected to reach from June onwards followed with Brazilian crop in the preceding months

Cumin futures turned lower due to slowdown in demand as well as arrivals sentiments.  Spot prices traded weak and traded near Rs 12700 per quintal. Fresh arrivals were reported around 8000 bags compared with 7000 bags in the previous day.  As per the latest projection by trade sources the total production of cumin in the current season is likely to be around 21 lakh bags (1 bag = 60 kgs) which is three lakh bags less than the earlier projection. And production in last year was reported at 29 lakh bags. As per media sources, Carry over stocks in Syria and Turkey is expected to be low and fresh arrivals is expected from May to June period.

Turmeric futures declined on hopes of higher stocks with farmers.  Spot prices in Erode traded near Rs 7600 per quintal and arrivals were reported near 6800 bags compared  with 4500 bags in the previous day. According to media quotes, more promising business is expected only from August onwards. However if prices continued to show a rising trend, more procurement from bulk dealers is expected on anticipation of a trend reversal. Farmers are likely to hold the produce for better price realization and as per trader’s opinion if the prices continuously trade below Rs 8000 per quintal will reduce the intensity of arrivals. Farmers waited for further cues in prices in order to start cultivation even though monsoon had arrived earlier than expected.

Cardamom futures escalated on more buying interest  in the counter. Ramdhan demand is expected to prosper in near future. And more demand from East Asian countries is expected at this period. However higher stocks as well as favorable weather condition in the major producing areas continued to pressurize the prices. According to last updates, average spot prices improved and traded near 735.54 per ton and  arrivals are reported near 35 tons compared with 41 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 May 29,2011, stood at 10368 tons which  is six percent  than last year arrivals.

Chilli futures declined on arrival sentiments. Spot market prices remained firm and traded near Rs 8600 per quintal and fresh arrivals were reported near 35000 bags compared with 25000 bags in the previous day. Poor export demand continued to pressurize the prices. As per trade sources, arrivals is expected to decline in the coming days  and stocks kept in cold storages will contribute the major chunk in consumption. As per market sources, total stock in  Guntur is expected around 40-45 lakh bags, out of this quality produce is expected around 30-35 lakh bags.

Coriander futures edged higher on increased buying interest. Spot prices trade near 4680 per quintal and total arrivals were reported 9500 bags. 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

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