daily agri report june 11 -...

Commodities Daily Report

Agricultural Commodities

Monday| June 11, 2012

www.angelcommodities.com

Content

News & Market Highlights

Chana

Sugar

Oilseed Complex

Spices Complex

Mentha

Potato

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Market Highlights (% change) as on June 8, 2012 Last Prev. day WoW MoM YoY

Sensex 16719 0.42 4.72 1.45 -9.24 Nifty 5068 0.37 4.68 1.88 -8.38 INR/$ 55.42 0.86 -0.21 3.11 23.84 Nymex Crude Oil - $/bbl 84.1 -0.85 1.05 -13.13 -15.06 Comex Gold - $/oz 1590 0.22 -1.88 -0.23 2.82

Source: Reuters

News in brief

Dry weather in US Midwest grain belt to cut production A dome of heat is set to hover over the US Midwestern grain belt next week at a time when the earliest planted corn crop will begin to pollinate, raising the stakes in a market already fired up over a lack of rain last month. While weather conditions in the Midwest will take centre stage, traders will also watch the US Department of Agriculture's supply-demand report on Tuesday updating ending stocks and South American grain output. (Source: Economic Times)

Higher prices likely to cut fertiliser demand by 10-15%

Rising fertiliser prices may lead to a drop in demand by 10-15% this kharif season. The impact will be more on di-ammonium phosphate (DAP) whose prices are likely to double over last season. DAP prices have gone up from Rs 12,000 a tonne last kharif to over Rs 18,000 a tonne and are likely to be revised to Rs 24,000 within a couple of weeks. “Yes, there are chances of demand destruction, keeping the rising prices in view. Farmers may cut DAP use by 10-15%. Last year also, there was a dip in demand. However, the picture will be clear once sowing begins,” said a fertiliser ministry official. The drop in demand will be more apparent in the second half of the monsoon. Initially, companies will sell existing stocks at the older retail price. “But when old stocks exhaust, new stocks with new price tags will hit the market which will be over 30% costlier. This may squeeze the demand further,” said an official of a fertiliser company. (Source: Economic Times)

Cotton prices seesaw on high output

High domestic production and increased world supply, along with a gloomy global economy has put pressure on do mestic cotton/‘kapas’ pric es. Prices have witnessed some recovery since past one week due to the slow advance of southwest monsoon in India, which is crucial for sowing. The cotton arrival season is nearing its end and almost 92.5 per cent of the crop has arrived so far. Ac cording to the Cotton Cor poration of India (CCI), out of the estimated 347.05 la kh bales of cotton, 321.27 lakh bales had arrived till May 27, in line with last year’s 321.52 lakh bales. Despite a decline in cotton consumption to 252 lakh bales, compared with 267 lakh bales last year, end stocks are estimated to de cline sharply to 24.3 lakh bales on the back of record high exports that crossed 115 lakh bales this year. With the government lifting ban on exports, stocks may decline further and may su pport an upside in prices. (Source: Financial Chronicle)

Exports to Malaysia to reduce wastage of rice

India’s rice inventory as on June 1 was 32.1 million tonnes, against a target of 12.2 million tonnes. In May, stocks of rice were 32.9 million tonnes. Since 2009, the government has been keeping an additional 3 million tonnes of wheat and 2 million tonnes of rice as strategic reserves over and above monthly stocks. India is the world’s second-largest producer and consumer of rice (after China). The inventory figures moved up due to a higher rice production. Higher rice output was not only a bo on for the country, but, it also helped push up world rice output as well. According to the food and agriculture organisation (FAO), an arm of United Nations, statistics, world output of the key staple rose by 2.6 per cent to all-time high of 480.1 million tonnes (mt), helped mostly by record rice production in India. Global rice production had sto od at 468.1 mt at the end of 2010. FAO in its report also attributed the significant rise in world rice output to larger contributions by Asian countries in general. Asian countries like China, Pakistan and Vietnam have all harvested substantially larger quantity of rice. (Source: Financial Chronicle)

Inclement weather may take a bite off US corn yield

Earlier this year, U.S. farmers reveled in what was the warmest spring ever, sowing corn seeds on a near-record number of acres in record time. Their haste may now be their undoing, however, as the crop enters a critical growth phase weeks earlier than normal, pollinating during a period of unusually dry weather that threatens to eat into its yield potential. The signs are ominous: weather forecasting models that were previously in disagreement have now converged, both showing weather that is too dry and too hot for healthy crop development. The warm spring has already caused some soil moisture to evaporate, and early growth plants absorbed more. While few traders expect the U.S. Department of Agriculture to cut its yield forecast in Tuesday's monthly report -- the agency could move as early as July to adjust yields -- the darkening outlook fueled a rally of more than 8 percent in Chicago corn futures last week. It was the biggest weekly gain in more than a year. (Source: Reuters)

Specs turn bearish on corn for first time in 2 years

Large speculators took a net short position in Chicago Board of Trade corn for the first time in nearly two years, betting that early planting would lead to a huge crop this fall, regulatory data showed on Friday. Their move came a day before corn began a three-day rally that pushed prices up 5.3 percent due to rising concerns about hot and dry weather harming the crop in the Midwestern Corn Belt. Speculators also raised their net short position in CBOT wheat and cut their bullish bet on soybeans to a three-month low. The Commodities Futures Trading Commission's weekly commitments of traders report showed that noncommercial traders, a category that includes hedge funds, were net short 6,382 corn contracts after cutting 3,401 longs and adding 18,559 shorts to their position in the five trading days ended June 5. (Source: Reuters)

Thai government to start releasing record rice stocks soon

Unmilled rice stocks held by the Thai government have jumped to 15 million tonnes, the highest ever, Commerce Ministry data showed on Monday, and a ministry official said it would start releasing grain soon by selling in domestic and foreign markets. A senior Commerce Ministry official said the grain in stock was equivalent to around 9 million tonnes of milled rice. In recent years, Thailand has exported between 8 million and 10 million tonnes a year. The stocks are likely to rise further as the government's buying scheme, aimed at supporting millions of poor farmers, continues until the end of June. Another official, Manat Soiploy, who oversees rice trade at the Ministry of Commerce, told Reuters: "We are in talks with Thai exporters to sell around 300,000-500,000 tonnes of rice from government stocks, but the deals are not concluded yet." Besides selling rice to exporters, Manat said some could be sold overseas through government-to-government deals. (Source: Reuters)





Market Highlights as on June 9, 2012

% change

Unit Last Prev day WoW MoM YoY

Chana Spot - NCDEX (Delhi)

Rs/qtl 4238 0.69 0.89 -0.79 57.38

Chana- NCDEX June '12 Futures

Rs/qtl 4075 0.32 -0.97 -3.11 46.69

Source: Reuters

Technical Chart - Chana NCDEX July contract

Source: Telequote

Technical Outlook valid for June 11, 2012

Contract Unit Support Resistance

Chana July Futures Rs./qtl 4070-4100 4180-4210

Chana Chana prices settled higher 0.3% on Saturday on expectations of supply tightness of the commodity amidst 10% drop in output. However, sharp gains are capped on fears of government intervention, Chana being the essential commodity.

India's annual monsoon rains, which are crucial for farm output, have arrived at the southern Kerala coast on Tuesday. However, it is necessary to keep close watch on the advancement and distribution of the monsoon as they will direct the prices of farm commodities in the coming months. As per the latest release of Department of commerce(GOI), during April11- February 12 imports of pea, chickpea and Tur rise by 42 percent, 99 percent and 27 percent to 19.31 lakh tonnes ,1.93 lakh tonnes 3.37 lakh tonnes respectively as compared to previous year. While, moong and lentils imports are down by 14 percent and 38 percent to 3.6 lakh tonnes and 98 thousand tones compared from last year.

Under a government initiative, India is now growing pulses in the summer season, apart from it’s typically followed two crop cycles, Kharif and Rabi. Farmers are cultivating summer pulses to cash in on the short duration crops, which can be used with the wheat-paddy cropping system.

According to preliminary Pulses have been sown in 15.11 lakh hectares so far in the current sowing season as against target of 17.49 lakh hectares. (Source: PIB)

Apart from imposing special margin, to conduct proper functioning of Commodity market, the regulator has also made revision in the contracts specifications like revision in the penalty structure and validation period. Further, wef from June expiry, the staggered delivery option is applicable on Chana contracts wherein seller can mark intention on the 5th of every month. Buyer or seller can take fresh position even during the tender period, but buyers need to be cautious of the delivery which can be marked to them if the Position is kept open at EOD.

Demand Supply Scenario According to the third advance estimates, Pulses output is pegged at 17.02 mn tn compared with 18.24 mn tn produced in the year 2010-11 while Chana output in 2011-12 is estimated lower at 7.40 million tonnes as compared to 7.66 million tonnes as stated in second Advance estimates and 8.22 mn tn produced last year.

India's consumption of pulses is on the rise with an annual growth of around 5% but production is seen lower, which may lead to increase in imports this year. However, rupee weakness may turn import costlier. Around 74% of Indian chickpea imports come from Australia.

To curtail the domestic prices of pulses and fulfill the mis-match between demand-supply, Indian government incorpated the two subsidy scheme for importing pulses through designated agencies. In first scheme(December,2006-March,2011), these agencies import 21 lakh tonnes of pulses while in second scheme(November,2008 - April,2012), 7 lakh tons of pulses have been imported from the agencies. Government may take further such measure to match the demand supply gap.

Outlook

Chana prices may remain sideways to up during the intraday on good demand at lower levels. Sharp upside might be capped on fears of government intervention.

In the short term (1 week), we expect Chana July contract to trade in the range of Rs 4000 and Rs 4250 per qtl levels. Long term fundamentals remain supportive for Chana prices on the back of supply concerns caused by lower output and growing consumption.






% Change Unit Last Prev. day WoW MoM YoY Sugar Spot- NCDEX (Kolkata) Rs/qtl 3160 0.32 0.54 -1.83 8.97

Sugar M- NCDEX June '12 Futures Rs/qtl 2819 0.68 0.39 -4.60 3.22

Source: Reuters

International Prices as on June 8, 2012

% Change Unit Last Prev day WoW MoM YoY

Sugar No 5- Liffe- May'12 Futures

$/tonne 577.5 1.16 3.38 3.42 -17.85

Sugar No 11-ICE May'12 Futures

$/tonne 444.00 1.11 2.88 -1.91 -20.56

Source: Reuters

Technical Chart - Sugar NCDEX July contract

Source: Telequote



Sugar July NCDEX Futures Rs./qtl 2790-2807 2845-2855

Sugar NCDEX Sugar prices settle up 0.4% higher w-o-w on account of a reversal seen in the international sugar markets last week caused by unfavorable weather conditions in Brazil and possible return of El nino. Rise in the international sugar prices may induce Indian exporters to export more sugar in the global markets thus supporting the upside in the prices.

India produced 25.5 million tonnes of sugar between Oct. 1 and May 31, up 8 percent from the year-ago period, the Indian Sugar Mills Association, a producers' body, said on Thursday.

DGFT has issued registration certificates for the export of 332000 tons of sugar out of which 177000 tons of sugar have already been exported, according to news sources. India had exported 28.14 lakh tn in MY 2010-11.

India will allow sugar mills to apply for exports of up to 25,000 tonnes in one application, government sources said on Wednesday last week, easing a directive a day earlier that prohibited mills from seeking approval for more than 10,000 tonnes. Mills can now export sugar within 60 days of the permission and can apply for additional exports once they sell 50 percent of the existing order. (Source: Reuters)

There are reports that the strong appetite for sugar could combine with bad weather in Brazil and a possible return of the El Nino weather pattern to take some pressure off global prices, which have plunged to their lowest since 2010 because of a nagging supply overhang. Thus, Liffe white sugar and ICE raw sugar settled 1.16% and 1.1% higher Friday.

Domestic Production and Exports

As on 8th June, 2012, the area under sugarcane is estimated at 50.57 lakh ha. Lower acreage is reported mainly in Maharashtra, Karnataka and Uttarakhand, while higher area is reported in the states of Bihar, Punjab, Tamil Nadu, Uttar Pradesh and Andhra Pradesh.

Sugar production in India — the world’s second-biggest producer — touched 25.50 million tonne since October 1, up 8% from a year before, data released by the ISMA on Thursday said. Output in the western Indian state of Maharashtra was at 8.97 million tonnes, up from 8.91 million tonnes a year ago while that from northern Uttar Pradesh state was at 6.96 million tonnes, up 18 percent.

With the opening stocks of 6.8 mn tn, domestic Sugar supplies are estimated at 32-33 mn tn against the domestic consumption of around 22.5-23 mln tn. Thus, there is a wide scope for exports from India. Taking into consideration the same government has allowed 3 mn tonnes exports in 3 tranches.

Global Sugar Updates

According to Unica, Brazilian sugarcane crushing since the beginning of the 2012/2013 harvest totaled 35.09 million tons by mid-May, a 38.67% drop compared to the same period last year as wet weather delayed harvesting operations. Sugar output has reached 1.56 million tons, a drop of 33.89% compared to last year.

Further, with the recent rains in the producing belts, the sugar content level may also decline, and thus the output may fall much below the government’s target.

According to the International Sugar Organization (ISO), the global sugar surplus is forecast to halve to around 3 mln tn in 2012/13 (October-September) from a surplus of 6.5 million tonnes in 2011/12).

Outlook

Sugar prices may recover tracking the firmness in the international markets in the last 2 sessions. In the long term, price trend would depend on planting figures of 2012-13 crop in the domestic markets and thereby output estimates for next season. Also, it is necessary to keep close watch on Brazilian Sugarcane harvesting progress and demand from China.






% Change


Soybean Spot- NCDEX (Indore)

Rs/qtl 3434 -0.72 0.20 1.42 49.83

Soybean- NCDEX June '12 Futures

Rs/qtl 3380 -1.21 1.76 2.38 47.34

Ref Soyaoil Spot- NCDEX(Indore)

Rs/10 kgs 716.2 -1.15 -0.92 -1.25 12.25

Ref Soyaoil- NCDEX June '12 Futures

Rs/10 kgs 713 -0.81 -0.04 -2.39 12.37

Source: Reuters

as on June 8, 2012

International Prices Unit Last Prev day WoW MoM YoY

Soybean- CBOT- May'12 Futures

USc/ Bushel 1426 -0.12 6.10 1.31 3.39

Soybean Oil - CBOT-May'12 Futures USc/lbs 49.46 -1.85 1.79 -10.38 -13.68

Source: Reuters

Crude Palm Oil as on June 9, 2012 % Change

Unit Last Prev day WoW MoM YoY CPO-Bursa Malaysia –May'12 Contract

MYR/Tonne 2944 -0.34 -0.98 -11.72 -13.41

CPO-MCX-May '12 Futures

Rs/10 kg 542.8 0.11 -2.07 -7.04 13.46

Source: Reuters

RM Seed as on June 9, 2012


RM Seed Spot- NCDEX (Jaipur)

Rs/100 kgs 3868 2.37 4.13 3.85 38.28

RM Seed- NCDEX June '12 Futures

Rs/100 kgs 3655 -1.56 -0.68 -3.82 27.71

Source: Reuters

Technical Chart –Mustard Seed NCDEX July contract

Source: Telequote



Soy Oil July NCDEX Futures Rs./qtl 711-713 722-725

Soybean NCDEX July Futures Rs./qtl 3280-3300 3380-3420

RM Seed NCDEX July Futures Rs./qtl 3640-3660 3735-3760

CPO MCX June Futures Rs./qtl 535-538 546-548

Oilseeds

Soybean: NCDEX July Soybean futures traded lower on account of

weak global economic condition especially euro zone debt concern. Improved arrivals as compared to Friday coupled with Pre-monsoon showers reached in some parts of soybean growing regions in Madhya Pradesh also added bearish market sentiments. Arrivals of soybean in major mandis of Madhya Pradesh increased to 40,000 bags from previous day of 25,000 bags and arrivals in Maharashtra was 7,000 bags and Rajasthan 4,000 bags (bags=100 Kg). In Indore, Soybean prices (Mandi auction) were in a range of Rs 3330-3380/qtl and Plant delivery was in a range of Rs 3400-3460/qtl. Soy meal price (FOR,Kandla) were in a range of Rs 29600-29700/tones on Friday. Soy meal price (FAS,Kandla) were in a range of $ 525-526/tones. Sowing of Kharif oilseeds in India in the current season till date stands around 65900 ha compared to 65000 ha during the same period previous year.

As per USDA’s weekly export sales report, the net weekly export sales for soybeans came in at 220,200 metric tonnes for the current marketing year and 275,000 for the next marketing year for a total of 495,200 which was well below trade expectations. Cumulative old crop sales stand at 101.6% of the USDA forecast versus a 5 year average of 98.3%. Meal sales came in at 75,000 metric tonnes for the current marketing year and 5,200 for the next marketing year for a total of 80,200. Sales of 80,000 metric tonnes are needed each week to reach the USDA forecast. Net oil sales came in at 13,100 metric tonnes for the current marketing year and -5,000 for the next marketing year for a total of 8,100. Cumulative soybean oil sales stand at 82.6% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 71.5%. Sales of 5,000 metric tonnes are needed each week to reach the USDA forecast.

Rape/mustard Seed: NCDEX July RM Seed futures fell sharply on back of lower demand from millers and stockiest due to weakness in other oilseeds and edible oil due to improved arrivals of oilseeds in major mandis coupled with pre monsoon showers in some parts of Madhya Pradesh also added bearish market sentiments. As per 3rd Advance Estimates of Crop Production for 2011/12 released by Ministry of Agriculture which shows production estimates of RM seed of 6.96 mln tons which is much higher as compared to COOIT’s figure of 6.03 mln tons. As per COOIT, the country's rapeseed output is estimated to drop by 12.6% to 6.03 mln tons in the year to June 2012.

Refined Soy Oil: NCDEX July Soy oil futures traded lower on account of weak overseas market sentiments due to euro zone debt concern and slow global economic growth may affect demand further. Higher sowing acreage of US soybean and sowing acreage of domestic soybean may increase about 7% this year as compared to last year also added bearish market sentiments. Outlook: In the intraday oilseed complex is expected to trade range bund amid subdued trading activity with mixed sentiments. On one hand, lower demand from fron European countries due to euro zone debt concern. On the other hand, oilseed complex may trade higher ahead of Ramdan (fasting month of Muslims i.e. July 20 to Aug 20) might control prices from falling sharply. Lower stocks of the soybean in the domestic market dollar are in favour of the bulls.






% Change


Pepper Spot- NCDEX (Kochi)

Rs/qtl 38924 -0.04 1.63 4.42 42.61

Pepper- NCDEX June '12 Futures

Rs/qtl 39500 -0.04 1.86 7.06 45.27

Source: Reuters

Technical Chart – Black Pepper NCDEX July contract

Source: Telequote



Black Pepper NCDEX July Futures Rs/qtl 38850-39130 39870-40100

Spices Black Pepper Decline in the arrivals in the domestic market led Spot prices of Pepper and Futures to settle 1.63% and 1.86% higher w-o-w. Buying by the local stockists also led prices to settle higher. NCDEX Pepper Futures lists in the staggered delivery mechanism. Under this system buyers need to square of their position if not intending to take delivery before 5th of the contract expiry month.

Production in Vietnam, the largest producer of the spice is expected to be revised to 1.35 lakh tonnes as compared to earlier estimate of 1.10 lakh tonnes. Harvesting of Pepper in Vietnam is almost complete.

Pepper prices in the international market are being quoted at $7600/tonne while Vietnam was offering its produce at $6,950/tonne. Brazil was offering its pepper at $7,000/tonne.

Exports According to Spices Board of India, exports of pepper during April 2011-January 2012 rose by 49% and stood at 22,300 tonnes as compared to 14,950 tonnes in corresponding period last year. Month on month rise in the exports of Pepper stood at 12%. India imported 1,848 tonnes of pepper till March 2012 and has become the third country to import such large quantity after UAE and Singapore. (Source: Agriwatch)

According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of black pepper in 2012 are forecasted to fall by 30 percent to around 86,000 tonnes. Vietnam shipped a record number around 18,800 tons in March alone, against some 14,000 tons in March 2010 and 16,100 tons in March 2011 (Source: Peppertradeboard).

Pepper imports by U.S. the largest consumer of the spice declined 14.8% in the first 2 months of the year (2012) to 8810 tn as compared to 10344 tn in the same period previous year. Imports of Pepper in the month of February declined by 16.8% to 3999 tn as compared to 4811 tn in the month of January 2012.

Exports from Indonesia posted significant decrease of 42% as compared to previous year. Exports stood at 36,500 tonnes as compared to 62,599 tonnes in the last year. During February 2012 Brazil exported 1,679 tonnes of pepper as against 2791 tn in February 2011. Export of Pepper during January – February 2012 stood at 4222 tn a decline of 16% as compared to same period previous year.

Production and Arrivals Arrivals of pepper in domestic market stood at 15 tonnes while offtakes were 13 tonnes on Saturday.

Global Pepper production in 2012 is expected to increase 7.2% to 3.20 lakh tonnes as compared to 2.98 lakh tonnes in 2011 with sharp rise of 24% in Indonesian pepper output and in Vietnam by 10%. According to latest report pepper output in Vietnam is estimated to be 1.35 lakh tonne as compared to 1.10 lakh tonne estimated early in the beginning of year (2012).

Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Peppertradeboard) On the other hand production of pepper in India in 2011-12 is expected to decline further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year. Production is lowest in a decade.

Outlook

Pepper prices in the intraday are expected to trade sideways to up due to improved buying by the market participants. However, commencement of fresh arrivals from Malaysia and Indonesia are likely to cap sharp gains.






% Change


Jeera Spot- NCDEX(Unjha)

Rs/qtl 13363 -0.14 -0.25 -2.88 -7.61

Jeera- NCDEX June '12 Futures

Rs/qtl 12600 -0.55 0.38 -5.97 -13.86

Source: Reuters

Technical Chart – Jeera NCDEX July contract

Source: Telequote

Market Highlights as on June 9, 2012 % Change


Turmeric Spot- NCDEX (N'zmbad)

Rs/qtl 3488 0.00 -2.85 -2.54 -52.88

Turmeric- NCDEX June '12 Futures

Rs/qtl 3550 -0.34 -1.88 -3.16 -54.11

Technical Chart – Turmeric NCDEX July contract

Source: Telequote


Unit Support Resistance

Jeera NCDEX July Futures Rs/qtl 12680-12760 13200-13300

Turmeric NCDEX July Futures Rs/qtl 3610-3645 3780-3820

Jeera Jeera Spot prices were quoted at steady rates and settled 0.25% lower w-o-w while Futures witnessed short coverings towards the end of the week and ended 0.38% higher on Saturday. Demand from the overseas buyers have reduced currently but is expected to resume towards the end of the month.

There are reports of lower output of jeera in Syria and Turkey in 2012. This is controlling prices from trading higher. Fresh arrivals from Syria have commenced while harvesting of Jeera in Turkey will commence shortly. Jeera prices in the international market of Indian origin are being offered at $2,550/tonne while Syria is offering its produce at $2950/tonne.

Carryover stocks of jeera in the domestic market is expected to be around 7-8 lakh bags as compared to 4-5 lakh bags in the last year.

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 8,000 bags, similar as that of previous day while off-takes stood at 7,000 bags on Saturday. Production of jeera in 2011-12 is expected to be around 40 lakh bags as compared to 29 lakh bags in 2010-11. (each bag weighs 55 kgs). (Source: spot market traders).

According to Spices Board of India, exports of Jeera during April 2011- January 2012 stood at 34,500 tonnes as compared to 22,450 tonnes in 2010-11, an increase of 54%. However, month on month exports of jeera witnessed a decline of 40%.

Outlook

Jeera Futures are likely to trade sideways owing to continued arrivals in the domestic mandis coupled with steady offtakes. However, expectation of fresh overseas demand might strengthen prices in the short term. In the medium to long term (July-August 2012) prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey and crop there is 30% short of last year.

Turmeric

Fragile demand from the domestic buyers led Turmeric Spot prices to trade with bearish tone and settle 2.9% lower on Saturday. Futures traced the Spot market and settled 1.88% lower w-o-w.

Production, Arrivals and Exports

Arrivals in Nizamabad and Erode mandi stood at 3,000 bags and 8 thousand bags respectively on Friday.

Fresh sowing of Turmeric will commence with the onset of southwest monsoon in the key growing regions.

Turmeric production for the year 2011-12 is projected at historical high of 90 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 2010-11. Erode is expected to produce 55 lakh bags of turmeric a rise of 29% as compared to previous year.

According to Spices Board of India, exports of Turmeric during April 2011- December 2011 stood at 62,000 tonnes as compared to 37,400 tonnes in 2010-11, rise of 66%. Targets set by the Spices Board have already been met till October 2011. Exports have touched new historical levels in 2011-12.

Outlook

Turmeric prices in the intraday are likely to witness selling pressure on account of fragile demand from the domestic and overseas buyers.

In the medium to long term (July to August) prices are expected to track demand from the overseas and domestic buyers and advancement of south west monsoon to the interior parts of India particularly parts of Andhra Pradesh and Tamil Nadu.






% Change


Mentha Oil- MCX Spot (Chandausi)

Rs/qtl 1498 -3.35 8.43 -7.78 20.80

Mentha Oil MCX – May Futures

Rs/qtl 1379 -4.00 11.50 -0.62 11.21

Source: Reuters

Technical Chart – Mentha Oil MCX June contract

Source: Telequote

Market Highlights as on June 9, 2012 % Change


Potato Spot- NCDEX (Agra)

Rs/qtl 968.8 0.00 -0.40 0.80 69.70

Potato- NCDEX June '12 Futures

Rs/qtl 991 -0.41 1.60 4.86 94.20

Technical Chart – Potato NCDEX July contract

Source: Telequote


Unit Support Resistance Mentha Oil May Futures Potato NCDEX July Futures

Rs/kg Rs/qtl

1350-1360 1035-1045

1405-1430 1080-1086

Potato MCX July Futures Rs/qtl 1090-1100 1125-1132

Mentha Oil Mentha Spot prices remained firm throughout the week on account of lower arrivals in the domestic market owing to reports of excessive dry weather in the key growing areas. Also, reports of stockists holding back mentha oil stocks, thus reducing the supply further fuelled the upside movement. Prices in the Spot and Futures ended 8.4% and 11.5% higher respectively w-o-w.

Total Special Cash margin of 25% on the long side of Mentha Oil has been reduced to 10% in the May contract and 5% in June contract onwards from May 5, 2012. For detailed reference please refer to the Circular No: MCX/T&S/180/2012 dated 03/05/2012.

Production, Arrivals and Exports According to spot market sources, the overall acreage is estimated to increase from 1.75 lakh ha to 2.1 lakh ha this year. The overall production of Mentha is expected to increase by 30% - 40% as compared to last year. Arrivals of the fresh crop have started in the main sowing regions and currently stand around 1000 drums(each drum weighs 180 kgs). Exports of Mentha during April 2011 to January 2012 witnessed a decline of 6% to 12,850 tonnes as compared to 13,550 tonnes in the same period last year.

Outlook

Mentha oil prices in the intraday might witness selling pressure eyeing arrivals to improve in the coming days. Further fragile demand from the local buyers is likely to keep prices bearish in the short term. However, with monsoon nearing shortly sharp upside in the prices are likely to be capped as the monsoon will help to improve the yield.

Potato

Potato Spot prices were quoted at steady to weak on account of fragile demand from the local buyers. Tracking the spot markets, futures also settled 04% lower on Saturday

As per circular issued by NCDEX dated June 04, 2012, Special margin (cash) on potato on long side have been reduced to 15% from 25% and Additional margin (cash) of 5% on both long and short position have been withdrawn. Margins will be in effect from Wednesday 06, 2012.

Production and Arrivals Scenario The arrivals of potato in markets are at present from the cold storages and also from locally stored by farmers. The quality of potato tubers in the markets is medium to good. The sowing of potato seed for kharif production in Karnataka and hills of Himachal Pradesh, Uttarakhand and J&K has been started. The seed sowing in Maharashtra is yet to be started. The area for kharif is expected to be little more in comparison to previous year.

According to the West Bengal Cold Storage Association, release of potatoes from cold storages in Bengal has started and about 4-5% of the total quantity of potatoes kept in cold storages has been released. 2011-12 output is much lower than the NHRDF’s estimates of 43 million tonnes.

The modal prices of potato in almost all the markets during the month of May 2012 have increased by around 50 to 75% compared to last year and 10 to 20% compared to April 2012.

Outlook Potato prices are likely to witness some recovery due to slow advancement of monsoon. Reduction in the Special cash margins might provide further support to the prices. In the medium term, Potato prices may take cues from the sowing progress of Kharif Potato.

daily agri report june 11 -...

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