International Spice Commodities Update – November 09, 2011

Posted on

Weekly Market Reports of International Spice Commodities

Pepper futures gained slightly due to short covering as the prices had declined in the previous session.The spot price of garbled pepper in Kochi mandi traded on steady note at around Rs.32500 per 100kg compared to previous day. According to International Pepper Community the average price ofgarbled pepper price in India dipped to $6995 per tonne from $7295 per tonne on last week, down by 4 percent. As per market source, there was no sellingpressure in the spot market as the farmers were holding their stocks expecting a rise in prices. However, the price is expected to gain further as all the major producing countries have cleared their stocks, particularly Vietnam. Vietnam is estimated to have exported 1.12 lakh tonnes of pepper in September 2011, up by 14 percent compared to same period previous year.

Cumin futures traded weak on slack demand due to high availability of stocks in the market. Higher stocks in the exchange accredited warehouse are likely to weigh on the trend. As per NCDEX report, around 3239 tonnes of Cumin will expire on 5th December 2011. Cumin arrivals in Unjha market stood unchanged near 6000 bags from previous day, where the price was quoted at around Rs.14000 per 100 kg, down Rs.100. New crop is expected to hit the market by January end. Data released by Rajasthan Department of Agriculture showed that acreage of major rabi crops in the state was 2.95 million ha by October end, up 24 percent compared to same period previous year.

Turmeric futures pared more than 2 percent on weak demand from domestic market amid higher production estimates. Total arrivals in Erode and Nizamabad markets were around 10800 bags, where the price fell by Rs.200 to Rs.4600 and Rs.5600 per 100kg respectively. According to latest data by Spices Board, the price of turmeric in Erode market by the end of October 2011 declined to a range of Rs.5800-6000 per 100 kg against Rs.15500-15700 per 100 kg quoted same period last year. Higher productions lead the price downward. However fall in stocks in the warehouses may limit the prevailing bearish trend. As per data from NCDEX, the total stocks in exchange accredited warehouse decline to 5109 tonnes from 5758 tonnes aweek ago. Marginal decline in daily arrivals due toreluctant by the stockiest to sell at current lower rate may also limit sharp fall.

Cardamom traded weak due to steady demand amid higher arrivals in the spot markets. Favorable climatic conditions in major growing areas are likely to further increase the arrivals in coming days. The arrivals  at Sunday auction stood at around 77 tonnes, where theaverage price quoted near Rs.557 per kg. According  to latest data by Spices Board, the average price of cardamom in India by the end of October 2011 declined to around Rs.597 per kg from near Rs.1081 quoted same period a year ago. The supply increased to 52 lakh kg from 28 lakh kg reported same period in 2010-2011. Higher productions pulled the prices down. However, cardamom stocks in MCX accredited warehouse as on 5th November 2011 declined to around 26.7 tonnes from 36.2 tonnes week ago. Rising arrivals in the spot market pulled the market down.

Chilli supply in Guntur mandi rose by 15000 bags compared to previous day to around 50000 bags. As per market source, the arrivals in Madhya Pradesh increased to around 1 lakh bags against near 70000 bags reported last week. The sowing of chillies is progressing in Andhra Pradesh. As per Andhra Pradesh Agriculture Department, total area sown under chilly in the state during this rabi season for last week increased to 18049 ha against 12947 ha same period previous year. However,a ccording toNCDEX report, the stock of chillies in exchange accredited warehouse as on 5th  November 2011 declined to 1678  tonnes from 2061 tonnes reported last week.

Coriander  prices fell on slack demand in the spot market.  The price in Kota mandi was stable at around Rs4700 per 100 kg. Total coriander arrivals in Rajasthan spot markets were around 6000 bags against 6500 bags on previous day. Around 458 tonnes of coriander will expire with November contract and is likely to weigh on the trend. The sown areas in major growing states are likely to rise due to good rainfall. According to Andhra Pradesh Agriculture Department, the area covered under coriander in the state during rabi season 2011-12 has declined to 405 ha by the end of October 2011against 1671 ha same period previous year. As per market source, the sowing is progressing in Madhya Pradesh and Rajasthan and is likely to continue till December.

SPECIAL REPORT

Dwindling N. Indian demand, high arrivals pound turmeric

ERODE Spot turmeric prices fell by Rs 150-300 a quintal as 14,000-odd bags arrived in the market on Wednesday. Traders bought negligible quantities to fulfil pending orders and for local spices firms as North Indian buyers rarely placed any new orders, said Mr R.K.V. Ravishankar, President, Erode Turmeric Merchants Association. Some farmers refused to sell at such low prices, he added.

Orders from the North have declined by half with the onset of winter and within a fortnight traders there might stop placing new orders. Turmeric futures dropped by Rs 100 a quintal.

Farmers held back 500-odd bags at the Regulated Marketing Committee, where spot turmeric dropped by Rs 300 a quintal.The hybrid variety decreased by Rs 100-200 a quintal on poor quality.

In the Erode Turmeric Merchants Association Sales yard, the finger variety was sold at Rs 3,549-5,034 and the root variety at Rs 3,319-4,717.

Salem crop: The finger variety was sold at Rs 5,060-5,369 a quintal and the root variety at Rs 4,789-5,009. Out of the 3,612 bags that arrived, only 498 were sold. At the Gobichettipalayam Agricultural Cooperative Marketing Society, the finger variety was sold at Rs 4,199-5,210 and the root variety at Rs 3,410-4,860. All the 435 bags which arrived were sold. At the Erode Cooperative Marketing Society, the finger variety was sold at Rs 4,000-5,155 and the root variety at Rs 3,800-4,759. Out of the 1,214 bags that arrived, 1,044 were sold. At the Regulated Marketing Committee, the finger variety fetched Rs 4,672-5,057 and the root variety at Rs 4,489-4,717. Out of the 1,537 bags that arrived, 1,006 were sold.

 Pepper Up On Buying Support

Pepper market on Wednesday moved up sharply on strong buying support from exporters despite consistent efforts by spreading bearish propaganda aimed at influencing certain long position holders to panic and liquidate.

“This calculated move to bring down the prices appears to have been defeated as there was good buying support,” market sources told Business Line.

Expert analysts of brokers and consultants of importers were allegedly spreading bearish propaganda to create a fear psychosis in bull speculators and some of the investors holding long positions to liquidate. As ready pepper from the growers and primary market dealers was not available and the only source was the investors, whatever material liquidated by them was bought by exporters. They were liquidating validity expired and farm grade pepper held by them. They were also buying back sales. The difference between Nov and Dec was also attractive for the investors.

Meanwhile, domestic demand was reportedly met by purchases from Karnataka which was offering pepper at Rs 310-315 delivered anywhere in India. Besides, dealers in the north Indian centres who are holding stocks bought much earlier at lower levels were also now releasing on the apprehension that the prices might drop once the new crop hit the market.

Nov contract on the NCDEX increased by Rs 540 to close at Rs 33,195 a quintal. Dec and Jan went up by Rs 545 and Rs 375 respectively to close at Rs 33,990 and Rs 34,350 a quintal. Total turnover fell sharply by 5,855 tonnes today to end at 5,047 tonnes. Total open interest moved up by 19 tonnes to 11,817 tonnes.

Nov open interest dropped by 597 tonnes to 4,186 tonnes while that of Dec and Jan went up by 591 tonnes and 1(one) tonne respectively to 7,080 tonnes and 355 tonnes. Spot prices in tandem with the futures market trend and good buying interest by Rs 200 to close at Rs 32,200 (ungarbled) and Rs 33,700 (MG 1) a quintal.

In spite of the rise in the futures market, Malabar pepper remained very competitive in the international market because of weakening of the rupee at $7,150-7,175 a tonne (c&f) for Europe and $7,400-7,425 a tonne (c&f) for US. Brazil was reportedly offering B Asta grade at $7,350 a tonne (fob) for Dec shipment. Brazil 1 – 560 G/L was likely available at $7,200 a tonne (fob) Dec shipment. Vietnam was steady with FAQ min 500 G/L quoted at $6,750 -6,775 a tonne (fob) HCMC and FAQ 550 G/L at $7,050 – $7,075 a tonne (fob). Indonesia was said to be quiet while Vietnam was not offering Asta grade, they said.

Forex Market

The Indian Rupee opened higher tracking initial gains in Asian peers. However, the Rupee reversed its trend to trade near a three-week low of 50.18 owing to the intraday weakness in the Euro coupled with losses in the domestic stock markets.

USD/INR pair closed at 50.17 compared to 49.48 yesterday.

 

CURRENCY

OPEN

HIGH

LOW

CLOSE

USD/INR

49.40

50.18

49.40

50.17

 

 

www.keresspices.com

Leave a Reply

Your email address will not be published. Required fields are marked *