International Spice Commodities Update – October 11, 2011

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Daily Market Reports of International Spice Commodities

Pepper contracts gained on supply squeeze in the domestic and global markets. As per the projections of the trade sources, the prices were up as India’s pepper exports may rise further due to global supply concerns. India exported 8750 tonnes of pepper in April-August, up 12 percent from a year ago, according to the Spices Board data. In terms of value, exports rose 74 percent to 23435 lakh rupees from around 13482 lakh rupees. Spot price traded near Rs.34800 per quintal and the market participation in the spot market was limited. According to India Pepper and Spice Trade Association data, 19 tonnes of pepper arrived in the spot market and 21 tonnes was sold.

Cumin Improvement in demand weighed on the market sentiments. The domestic demand is expected to pick up further for the Diwali and winter season. According to data by the Spices Board, in April-August, cumin export fell 39 percent on year to 9500 tonnes from 15700 tonnes. The availability of Indian cumin at a competitive rate may pour the overseas demand to Indian market. As per media source, Indian cumin was quoted at around$3200 per ton, while Syria and Turkey were offeringsimilar grades at around $3450 and $3500 per ton respectively. However as per market source, favorable soil condition due to good rainfall in Rajasthan and Gujarat has improved its sowing prospects in the upcoming rabi season.

Turmeric hit 4 percent upper circuit on extended bargain buying after declining sharply in the past few sessions. A short-term trend reversal is seen in turmeric on account of improved demand in physical markets. Festive season is likely supporting the prices. India exported 36500 tonnes of turmeric in April-August, up 52 percent from a year ago, according to the Spices Board data. However, high output estimates this year may pressurize the trend. According to data released by the Andhra Pradesh department of agriculture, acreage of turmeric in the state rose to 68000 ha so far this season from 67056 ha.

Cardamom Revival in demand on account of the festival season supported the market. However the daily arrivals were reported on higher side at around 107 tonnes compared to around 54 tonnes previous week. According to latest data by the Spices Board exports of small cardamom in AprilAugust 2011 rose 517 percent to 1450 tonnes from 235 tonnes same period previous year. Exports of large cardamom rose by 153 percent to around 240 tonnes in April-August. In terms of value, however export of  small cardamom rose 364 percent to around 12994 lakhs.

Chilli exports during April-August fell to 68000 tonnes, down 39 percent on year from 111000 tonnes, according to the Spices Board data. As per media report, around 6000-7500 tonnes was exported to Pakistan in the last one month. And chilli export from India is expected to touch 3 lakh tonnes in the current financial year against 2.40 lakh tonnes in 2010-2011 due to higher demand from Bangladesh and Pakistan. Chilli acreage in Andhra Pradesh so far this season was down 14.5 percent at 1.30 lakh ha compared to same period previous year. Guntur spot market will reopen today after Dussehra holidays.

Coriander According to data by the Spices Board, exports in AprilAugust fell to 12750 tonnes, down 47 percent from 23850 tonnes a year ago. And volume declined by 14 percent compared to same period last year. As per market source, the export demand is expected to rise from the west Asian countries by the month of November. Prospects of higher sowing due to sufficient rainfall in major growing areas of Rajasthan and Madhya Pradesh may increase the production.

SPECIAL REPORTS

Spot turmeric up Rs 1,100 a quintal

ERODE: Cheer to turmeric farmers as prices of finger and root varieties jumped Rs 600 a quintal on Monday. Spot prices increased by Rs 1,100 a quintal. “We feel the same trend may remain till Deepavali, as now many traders have received fresh North Indian orders,” said Mr R.K.V. Ravishankar, President, Erode Turmeric Merchants Association. He added that some traders feel the price may drop anytime soon with a rise in arrivals. T price quoted in the turmeric futures market has increased by 4 per cent, which has reflected at the spot market in Erode. North Indian traders have placed orders for Erode turmeric and sales in other areas have come down.

The hike – Rs 800 a quintal at the Gobichettipalayam Cooperative Marketing society and also at the Erode Cooperative Marketing Society – caught the farmers by surprise. The root variety rose by about Rs 700 a quintal and the hybrid finger by Rs 500 a quintal.

Traders are wary of stocking up as they anticipate a drop in prices.Bulk buyers have been purchasing quality turmeric for the last two days at an increased price for despatch of exports. Out of 7,000 bags arrived on Monday, 75 per cent of the goods were sold.

At the Erode Turmeric Merchants Association Sales yard, the finger variety was sold at Rs 4,016-5,939 a quintal, root variety at Rs 3,801-5,398 a quintal.

Salem Crop: The finger variety was sold at Rs 5,899-6,526 a quintal, root variety Rs 5,316-5,511 a quintal. Out of 1,676 bags arrived for sales, 1,010 bags were sold. At the Gobichettipalayam Agricultural Cooperative Marketing Society, the finger variety was sold at Rs 4,068-6,200 a quintal, root variety at Rs 3,200-5,359 a quintal. All the 161 bags arrived for sales were sold.

At the Erode Cooperative Marketing Society, the finger variety was sold at Rs 5,555-6,439 a quintal; root variety at Rs 5,219-6,199 a quintal. All the 786 bags kept for sales were sold. At the Regulated Marketing Society, the finger variety was sold at Rs 6,299-6,729 a quintal. The root variety sold at Rs 5,719-6,299 a quintal. All the 1,014 bags kept for sales ere sold.

India continues to remain cheapest source for black pepper

KOCHI If the weekend before last saw the bear operators in the driving seat at the pepper futures market, last week it was the turn of bull operators and, as a result, the market turned bullish pushing the prices up.

This high volatility and currency fluctuations has been putting the buyers as well as the sellers/exporters in a dilemma, especially at a time when the availability in the country is limited and much of what is available is only on the exchange platform.

Meanwhile, international players based in Europe and the US were reportedly making a propaganda that they were covering pepper at $300-400 below the prices of others from India, in a bid to push the market down, the trade alleged.

OFFTAKE RISES

It has been repeatedly stated in recent months by IPC-like institutions that there has been an increase in the consumption globally and the world pepper output has not grown corresponding to the growth in demand.

Unfavourable weather conditions coupled with lack of interest in farmers due to non-remunerative prices for about a decade aided a decline in several growing countries such as India. Indian output, in fact, nearly matches its domestic consumption, of late.

A likely impact of the high prices of black and white pepper might stop the supply of “green pepper” by several producing countries. In India it is mainly supplied by farmers in Pattiveeranpatti and Yercaud region in Tamil Nadu and Kumily in Kerala where pepper is grown in coffee estates. There is good market for green pepper in Europe and India is one of the major suppliers of it, market sources told Business Line.

On the NCDEX all the contracts last week moved up. October, November and December increased by Rs 95, Rs 1,145 and Rs 1,125 respectively to close at Rs 36,080, Rs 35,860 and Rs 37,410 a quintal.

TURNOVER SLIPS: Total turn over fell by 28,192 tonnes to end at 26,651 tonnes at the last weekend. Total open interest moved up by only 95 tonnes to close at 11,948 tonnes. spot prices increased by Rs 600 a quintal during the week to close at Rs 33,400 (ungarbled) and Rs 34,900 (MG 1) on Saturday on good buying support.

Despite slump in volume, spices export zooms 26% in value

Kochi: Some of the principal drivers for the export growth came from spices such as pepper, cardamom (small), cardamom (large), ginger, turmeric, nutmeg and mace, tamarind and asafoetida which have shown an increase both in volume and value. While export of value added products such as curry powder and paste has increased both in volume and value others such as spice oils, oleoresins and mint products have registered increases only in value terms. The export of few other spices has registered a decline in volume and value.

Pepper exports: There has been a strident growth in the unit value realisation from pepper exports which grew from Rs 173 a kg last year to Rs 268 a kg this year. The volume and value of pepper exports grew to 8,750 tonnes realising Rs 234 crore. Export of small cardamom also registered sharp increase, growing by 517 per cent in quantity to 1,450 tonnes realising Rs 130 crore.

Among the value-added products, 7,000 tonnes of curry powder/paste was exported fetching Rs 99.53 crore. Spice oils and oleoresins registered a growth of 38 per cent in value to Rs 519 crore while mint and mint product exports grew by 58 per cent to Rs 746 crore.

Forex Market

• The Indian Rupee opened weaker amidst downbeat risk sentiments and a weaker Euro. While the Rupee somewhat recouped it’s losses after the weak opening, the upside remained capped on account of fall in domestic equities. The

Rupee closed weaker at 49.20 compared to Thursday’s close of 48.97.

• The 6-month and 1-year forward premium closed at 3.45% and 2.42% respectively against 3.66% and 2.57% on Thursday

5 thoughts on “International Spice Commodities Update – October 11, 2011

  1. You have great insights about marketing online. I will surely come again. Thanks.

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  3. You need to show prices in other currencies, not just Indian ruppees?

    1. Future reports will have the currency conversions. Thank you for your request.

  4. There is a need to know prices in other currencies, including British pound Sterling or Euro or USDollars!

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