Daily Agri Report, March 25

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Commodities Daily Report

Monday| March 25, 2013

Agricultural Commodities

Content
News & Market Highlights Chana Sugar Oilseed Complex Spices Complex Kapas/Cotton

Research Team
Vedika Narvekar - Sr. Research Analyst [email protected] (022) 2921 2000 Extn. 6130 Anuj Choudhary - Research Analyst [email protected] (022) 2921 2000 Extn. 6132

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Disclaimer: The information and opinions contained in the document have been compiled from sources believed to be reliable. The company does not warrant its accuracy, completeness and correctness. The document is not, and should not be construed as an offer to sell or solicitation to buy any commodities. This document may not be reproduced, distributed or published, in whole or in part, by any recipient hereof for any purpose without prior permission from Angel Commodities Broking (P) Ltd. Your feedback is appreciated on [email protected]

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Commodities Daily Report


Monday| March 25, 2013

Agricultural Commodities
News in brief
Revised food security Bill offers more flexibility to states
The revised National Food Security Bill (NFSB) gives greater flexibility to states. For one, NFSB, cleared by the Cabinet last week and due to be presented in Parliament, allows states to choose the timing of launching the scheme. For another, the revised Bill allows states such as Chhattisgarh to continue with existing food security programmes. Some states, such as West Bengal, had expressed reservations over a singledate rollout on the ground that they would not be ready to implement it in a fool- proof manner. The revised Bill could not be tabled in Parliament before the recess of the Budget session due to adjournments. Parliament concluded its pre- recess segment on Friday and went into a recess for a month. However, the government hopes to pass it in Parliament in the Budget session itself. The revised Bill also does not bar any state or the Centre from continuing or launching other food- based welfare schemes. This means the food programmes currently operational in Chhattisgarh (which covers almost 90 per cent of the states population) and of Tamil Nadu and Andhra Pradesh will continue. However, the states concerned will have to provide from their own resources for benefits exceeding those mentioned in the NFSB. (Source: |Business Standard)

Market Highlights (% change)


Last Prev. day

as on March 22, 2013


WoW MoM YoY

Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz

18736 5651 54.35 93.71 1606

-0.30 -0.13 -0.18 1.36 -0.47

-3.56 -3.77 0.59 0.28 0.86

-4.62 -4.91 0.51 -0.79 1.81

8.95 8.09 5.96 -11.05 -2.20

.Source: Reuters

As global prices fall, Govt may cut subsidy on non-urea fertilisers


The Government proposes to slash the subsidy on non-urea fertilisers such as di-ammonium phosphate (DAP) by 14 per cent and muriate of potash (MoP) by about 19 per cent for 2013-14, following the decline in global prices of these nutrients. The Fertiliser Ministry has proposed a subsidy cut of Rs 2,000 a tonne for DAP and Rs 2,700 for MoP for the 2013-14, sources said. The subsidy on DAP is likely to be pegged at Rs 12,350/tonne for 2013-14 against last years Rs 14,350. Similarly, the subsidy for MoP may be fixed at Rs 11,740 (Rs 14,440). The proposed cut may not hit the maximum retail prices of these complex nutrients as global prices have softened by 15-20 per cent in recent months. As the country is nearly fully dependent on the imports of phosphatic (P) and potassic (K) fertilisers either in the form of finished fertilisers or their raw materials and the subsidy being fixed, its international prices affect the prices of these nutrients. On Friday, Minister of State for Fertilisers Srikant Jena hinted at a reduction in subsidy rates for P&K fertilisers.
(Source: Business Line)

Edible oil imports may rise 33% to 14 mt by 2020


Country's edible oil imports are estimated to surge 33% to 14 million tonne by 2020 so as to meet the rising domestic demand, according to an oilseeds processors' industry body. India imports about 60 per cent of its domestic demand. It imports palm oil from Indonesia and Malaysia and soyabean oil from Brazil and Argentina. The import estimate was given by the Solvent Extractors Association (SEA) in a presentation before the Agriculture Ministry on the overview and outlook of oilseeds sector. According to SEA Executive Director B V Mehta, edible oil imports are projected to increase to more than 13.9 million tonne by 2020, from 10.5 million tonne estimated in the ongoing 2012-13 marketing year ending October this year. (Source: Economic Times)

Maize up 1.9% at Rs 13,350 per tonne: USGC


Maize ruled slightly firm by 1.9 per cent in the market yards across the country during the last week at Rs 13,350 per tonne compared to the previous week following delay in arrivals of winter crop, according to the US Grains Council. Corn prices on pan India average at market yard level moved up by 1.9 per cent to Rs 13,350 per tonne last week, as the rabi crop in Bihar is delayed, USGC India Representative Amir Sachdev said. In the US, he said, the week started with an upward rally and prices reached a high of $288.56 per tonne on Thursday, and finally sliding downward at settling at $285.88 per tonne for May contract, up 1.42 per cent against the previous weeks close.As the market moved upward, cash sales were higher as farmers liquidated stocks held by them at farm. There is also a discussion that farmers could plant over 97 million acres of corn, he said.International Grains Council in its report on March 21, has estimated that the US corn crop output in 2013-14 could increase by 30 per cent on year-on-year basis, if normal weather continues. Due to this, the report said, the stocks are projected to recover to an eight-year high in 2013-14 from the 16-year low in 2012-13. (Source: Business Line)

Wheat storage a tough task as buying begins


Wheat storage seems to be a daunting task for the government even as the Food Corporation of India and other state agencies in Madhya Pradesh begin procurement at the minimum support price. Over 12 mt wheat is currently lying in the open -- termed Covered and Plinth (CAP) storage in officialese -- waiting to be evacuated largely from Punjab, Haryana and Uttar Pradesh. The government targets to procure over 44.12 mt wheat in the 2013-14 procurement season. As on March 1, FCI is holding 62.8 mt of food grains 27.10 mt wheat and 35.77 mt rice. According to an FCI official, Punjab is holding a record 22.76 mt grains 10.39 mt wheat and 12.37 mt rice. Similarly, Haryana is holding 10.04 mt grains 7.11 mt wheat and 2.93 mt rice. Uttar Pradesh is holding 3.38 mt grains, with wheat stock at 1.35 mt. In Madhya Pradesh, the emerging wheat bowl of the country, we are concerned about storage, considering that infrastructure is not available and the procurement target is 13 mt, said the FCI official. He added that government agencies and private players have 6-6.5 mt storage space in godowns and over 4 million in CAP. We are constructing 2-2.5 mt new scientific CAP storage in Madhya Pradesh and another 1 mt in warehouse are getting ready, he added. (Source: Economic Times)

SISPA appeals to Cotton Corporation to ensure quality cotton supply


The South India Spinners Association (SISPA) has appealed to the Cotton Corporation of India (CCI) to ensure adequate supply of quality cotton at a stable price to the domestic industry throughout the year. SISPA President K Thirunavukarasu has in a communication to the Chairman of CCI explained the precarious position of the mill sector in the aftermath of the spiralling price of cotton. Cotton prices have soared to unbelievable levels in the last fortnight. Since the member mills under SISPA come under the SME sector, we have been severely affected as the traders and MNCs are not offering cotton to this sector and quality cotton is not available at reasonable rates to the domestic spinning sector. He appealed to the CCI Chairman to release adequate quantity of cotton in the domestic market, both to stabilise the price as also ensure adequate supply. (Source: Business Line)

Coonoor tea sale turnover up 83%


The Coonoor Tea Trade Association (CTTA) auction turnover has risen by 82.96 per cent in the first two months of this calendar over last year, says an analysis of market reports. In January and February, eight auctions had been conducted when 1.03 crore kg was sold against 0.79 crore kg in 2012. On an average, each kg fetched Rs 98.51 (Rs 70.20 last year). Consequently, the turnover rose to Rs 101.47 crore from Rs 55.46 crore. This marked an increase of Rs 46.01 crore or a whopping 82.96 per cent in just two months. (Source: Business Line)

New forum begins graded turmeric sale at Erode

ICE to study cutting soft commodities trading hours www.angelcommodities.com

Commodities Daily Report


Monday| March 25, 2013

Agricultural Commodities
Chana
Chana Futures traded on a mixed note with a negative bias last week on account of higher production estimates coupled with higher arrivals of the new crop. However, demand from stockists and reports of some crop damage due to unseasonal rains in parts of MP supported prices at lower levels. The Spot as well as the Futures settled 1.58% and 0.62% lower wo-w. Arrivals have gained momentum in MP, the largest chana producing state and shall soon commence in Rajasthan, the second largest producer. Thus, sharp upside is capped in the chana spot prices.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3414 3388 Prev day -0.33 -1.45

as on March 23, 2013 % change WoW MoM -1.58 -5.93 -0.62 -1.37 YoY -5.45 -10.23

Chana Spot - NCDEX (Delhi) Chana- NCDEX Apr'13 Futures

Source: Reuters

Pulses Sowing 2012-13


According to the final figures from ministry of agriculture dated 5 February 2012, Chana sowing is 5.65% higher at 95.17 lakh ha compared to previous year. Acreage is up in Rajasthan, Maharashtra, MP and AP at 15.7 lakh ha, 12.53 lakh ha, 32.99 lakh ha and 7.33 lakh ha respectively.
th

Technical Chart - Chana

NCDEX April contract

Higher returns earned in 2012, coupled with a hike in minimum support prices (MSP), have helped expand overall acreage in 2012-13 season. The Centre has hiked the MSP by 14 per cent to Rs 3,200 a quintal for chana and as part of its strategy to encourage farmers to grow more pulses to reduce import dependence.

Demand supply fundamentals


According to second advance Estimates released on 8 Feb 2013, Total pulses output for 2012-13 season has been pegged at 17.58 mn tn, down 3.3% compared to previous year. The target for 2012-13 pulses crop output was set at 18.24 million tonne during the year. However, drought conditions have hampered kharif pulses output, which has been only partially offset by Rabi pulses output, especially chana. Out of the total pulses output, kharif output is estimated at 23% lower at 5.48 mn tn while rabi pulses output is pegged 8.72% higher at 12.09 mn tn compared with the final estimates of 2011-12. There has been a sharp increase in the chana output estimates on the back of higher acreage and good yield. Chana output is expected to breach its 2010-11 record of 8.2 mn tn and is estimated at 8.57 mn tn for 2012-13. In its first advance estimates chana output was pegged at 7.9 mn tn. However, erratic weather in M.P. may lower the yield. Assocham estimates, 21 mn tn of pulses demand in 2012-13 and is likely to reach at 21.42 mn tn in 2013-14 and 21.91 MT in 2014-15. (Source: Agriwatch).
th

Source: Telequote

Technical Outlook
Contract Chana Apr Futures Unit Rs./qtl Support

valid for Mar 25, 2013 Resistance 3425-3460

3345-3365

Trade Scenario
India imports Chana mainly from Australia and Canada and higher availability in these countries at comparatively cheaper rates is seen boosting imports of Chana to meet the domestic shortfall. In Australia, total chickpea production in 201213 is estimated to have increased to a record 713000 tones as compared with 485000 tons in 2011-12. In Canada chickpea output is estimated at 1.58 lakh tonnes compared with 86000 tn in 2011-12.

Outlook
Chana may trade on a mixed note today. Prices may gain due to demand from the stockists. Reports of crop damage from MP may also support prices. However, arrival pressure of the new crop coupled with overall higher production estimates may pressurize prices at higher levels.

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Commodities Daily Report


Monday| March 25, 2013

Agricultural Commodities
Sugar
Sugar futures declined sharply last week on account of higher supplies in the markets. Weak demand from the bulk consumers has also pressurized the prices. Prices have also declined as the government deferred discussion on the partial decontrol of the sugar sector. The spot as well as the Futures settled 0.66% and 3.42% lower w-o-w. Agriculture Minister Sharad Pawar said that the sugar output in 2013-14 may fall to around 24 mn tn against current years output of 24.5 mn tn. There are reports that some mills in Maharashtra have stopped crushing due to non availability of cane.
India, the world biggest sugar consumer, could consider easing curbs on the tightly controlled industry this week. Decontrolling the sugar sector would, involve abolition of regulated release mechanism, removal of levy sugar obligation from industry, freer export-import policy, removal of sugar from compulsory packing in jute bags only and a transparent policy linking cane price with sugar price. The government has decided not to increase import duty on sugar though industry bodies and manufacturers had demanded a hike in the duty to 60% from the current 10% to curb shipment of the sweetener. India's sugar production in the 2013/14 season is set to fall below consumption for the first time in four years as a water shortage trims acreage in three key states.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Apr '13 Futures Rs/qtl Last 3098

as on March 23, 2013 % Change Prev. day WoW 0.00 -0.66 MoM -3.39 YoY 8.60

Rs/qtl

2939

-0.81

-2.81

-5.04

5.64

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMay'13 Futures Sugar No 11-ICE May '13 Futures $/tonne $/tonne Last 527.1 404.44

as on March 22, 2013 % Change Prev day WoW -0.25 -0.05 -2.28 -3.65 MoM 5.17 -0.82 YoY -20.10 -28.99

.Source: Reuters

Technical Chart - Sugar

NCDEX April contract

Domestic Production and Exports


Out of the estimated 24 mn tn sugar output for the season 2012-13, India produced 13.7 mn tn in the first four months of the season beginning October 2012, up 3 percent a year ago period. With the opening stocks of 6.5 mn tn, domestic Sugar supplies are estimated at 30.5 mn tn against the domestic consumption of around 22. 5mln tn for 2012-13. Exports are not viable as international prices have also declined significantly.

Global Sugar Updates


Liffe white sugar as well as raw sugar futures on ICE declined 0.25% and 0.05% due to a global surplus situation coupled with ample supplies. Prices have declined as ISO forecasted higher global sugar surplus. Brazil exported 1.21 mt of raw sugar in February, vs 1.73 mt in January. The ISO forecasted a global sugar surplus of 8.526 mn tn while FO. Litch forecasted a sugar surplus of 10 mn tn in 2012/13, up from 6.479 mn tn in 2011-12. It forecast that the sugar stocks-to-consumption ratio would rise to 40.56 percent in 2012/13 from 38.21 percent in 2011/12. Sugar traders are the most bullish since October on speculation that the slump in prices to the lowest in 2 1/2 years will spur Brazilian millers to make more biofuel and less of the raw sweetener from cane. According to FO Litch, Brazil's center-south sugar production is expected to reach 36.2 million tonnes in 2013/14, up from 34.1 million tonnes in the previous season, Brazil plans to reduce taxes on ethanol to boost production and use of the biofuel. If Brazil cuts tax the ethanol parity to sugar may rise and thus the share of cane directed to sugar production in the 2013-14 season may be 44 -45%, down from 49.6 % in the current period.
Source: Telequote

Technical Outlook
Contract Sugar Apr NCDEX Futures Unit Rs./qtl Support

valid for Mar 25, 2013 Resistance 2960-2980

2910-2925

Outlook
Sugar is expected to trade lower due to higher supplies in the domestic markets. However, prices may recover from lower levels as demand will now reemerge to meet the summer season requirement. Markets are also awaiting a further announcement from the government on decontrol. Further, crushing will now start declining amid lower cane availability this season.

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Commodities Daily Report


Monday| March 25, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean Futures traded on a bullish note last week on
account of lower supplies in the domestic markets. The spot settled as well as the April futures settled 2.39% and 4.53% higher w-o-w. Exports of Soybean meal during February, 2013 was 5,77,589 tones as compared to 3,70,524 tonnes in February, 2012 showing an increase by 55.88% over the last year. On a financial year basis, the export during April 2012 to February 2013 is 31,13,651 tonnes as compared to 34,52,791 tonnes in the same period of previous year showing a decrease of 9.82%. According to the second advance estimates, 2012-13 oilseed output is pegged at 29.4 mn tn, down by 1.1%, while soybean output is pegged higher at 12.9 mn tn, up 3.2%.

Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Apr '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Apr '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3679 3637 689.8 687.7 Prev day 0.68 1.06 0.36 0.66

as on March 23, 2013

WoW 2.39 -0.55 0.78 -0.35

MoM 6.89 8.21 -4.79 -2.49

YoY 28.46 23.06 -6.05 -7.41

Source: Reuters

International Markets
Soybean Futures on CBOT corrected from higher levels and settled 0.59% lower on account of profit taking towards the end of the week coupled with expectations of record high plantings in 2013. Tight supplies of the old crop have supported prices in the US markets. Advancement of the South American crop has led to a decline in the prices over the last few sessions. There are reports that China has cancelled some cargoes from Brazil due shipment delays. Farmers in Argentina are holding back their crop anticipating higher prices. The USDA monthly crop report has kept the Brazil output unchanged at 83.5 mn tn while, it reduced Argentinas crop forecast from 53 mn tn to 51.5 mn tn. German oilseeds analyst Oil World cut its forecast of the 2013 soybean harvest in Argentina by 2 mn tn to 50 mn tn from its Jan estimates because of dry weather, but has raised its forecast of Brazil's soybean crop by 0.5 mn tn. Argentina soybean acreage is estimated at 19.35 mn ha. U.S. farmers will harvest record soybean crops in 2013, ending three years of falling production and rebuilding nearly depleted stockpiles.
International Prices Soybean- CBOTMay'13 Futures Soybean Oil - CBOTMay'13 Futures Unit USc/ Bushel USc/lbs Last 1441 50.43 Prev day -0.59 0.02

as on March 22, 2013 WoW 1.02 1.04 MoM -2.85 -3.15


Source: Reuters

YoY 6.74 -6.54

Crude Palm Oil

as on March 23, 2013 % Change Prev day WoW 0.99 0.17 4.77 1.65

Unit
CPO-Bursa Malaysia Apr '13 Contract CPO-MCX- Mar '13 Futures

Last 2460 461.5

MoM -1.95 0.68

YoY -26.94 -20.73

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Apr'13 Futures Rs/100 kgs Rs/100 kgs Last 3504 3462 Prev day 0.12 -0.32 WoW -0.22 0.26

as on March 23, 2013 MoM -7.79 0.52


Source: Reuters

Refined Soy Oil: Ref soy oil as well as CPO gained 1.76% and 1.65%
respectively tracking higher BMD prices. Demand from Malaysia is expected to increase, which have supported prices over the last few days. Lead speakers in the Palm Oil Conference have forecasted lower prices due to rising supplies. Higher global production estimates of palm oil by oil world have pressurized prices at higher levels. Global palm oil output is estimated at 55.3 mn tn in 2012-13, up by 3.4 mn tn. India's vegetable oil imports declined 17 percent from a month ago in February due to higher taxes. To curb imports, the tariff value of crude palm oil, the edible oil India imports most, has been raised from $ 815 a tonne to $ 848 a tonne, a rise of 4.04%.

YoY -8.03 -11.89

Technical Chart Soybean

NCDEX April contract

Rape/mustard Seed: Mustard Futures gained marginally bny


0.26% last week tracking positive edible oil pack. However, arrivals pressure of the new crop coupled with higher output expectations capped sharp upside. Sowing of Mustard seed is now up by 2.2% at 67.23 lakh ha. Agriculture ministry in its third advance estimates, pegged mustard output at 7.36 mn tn, up by 11.5%. MSP of mustard seed is fixed at Rs 3000 per qtl.

Outlook
Soybean is expected to continue to trade on a positive note due to low supplies in the domestic markets. Mustard seed is also expected to trade higher tracking positive oil complex. However, higher output expectations may restrict the upside. Soy oil and CPO is expected to trade higher due to higher international markets. Prices may find support on expectations that output may fall due to seasonally lower yield.

Source: Telequote

Technical Outlook
Contract Soy Oil Apr NCDEX Futures Soybean NCDEX Apr Futures RM Seed NCDEX Apr Futures CPO MCX Mar Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl

valid for Mar 25, 2013 Support 679-683 3565-3600 3425-3445 458-460 Resistance 690-693 3660-3685 3485-3510 463-465

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Commodities Daily Report


Monday| March 25, 2013

Agricultural Commodities h
Black Pepper
Pepper Futures traded on a mixed note last week. Good demand for the Kerala crop supported prices. Traders are actively buying the Kerala crop. Low stocks in the warehouses coupled with thin supplies and delayed harvesting on back of to lack of skilled laborers have also supported the prices. However, the spot prices remained under pressure due to higher supplies from Karnataka. Karnataka crop is trading at lower levels due inferior quality. Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 8,000 tonnes. There are also reports of some exports of Karnataka pepper from Mangalore port. Exports demand for Indian pepper in the international markets is weak due to price parity. The Spot settled 1.15% lower while the Futures settled 0.59% higher w-o-w. According to a circular issued by NCDEX on 09/02/2013, launch of June 2013 expiry contract in Pepper which is scheduled on February 11, 2013, has been postponed till further notice. The revised launch date will be announced in due course. Spices Board has announced plans to import high yielding Madagascar variety that was behind the record productivity in Vietnam. It could raise productivity of Indian pepper from 2,000 kg/ha to 7,000 kg/ha. Pepper prices in the international market are being quoted at $6,925/tn (C&F, New York). Vietnams Asta is quoted at $6,925-6,975/tn, Indonesia GM-1 is quoted at $6,900/tn and Brazil Asta is quoted at $6,600/tn.

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Apr '13 Futures Rs/qtl Rs/qtl Last 36750 35975 % Change Prev day 0.89 -0.07

as on March 23, 2013 WoW -1.15 -3.54 MoM -9.36 -4.52 YoY -8.95 -14.74

Source: Reuters

Technical Chart Black Pepper

NCDEX April contract

Exports and Imports


Indias pepper exports in 2012 have been reported at just 12,000 tonnes while imports reported at 15,000 tonnes making India a net importer. (Source: Agriwatch) According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of pepper in 2012 stood at 116,962 mt, Vietnam shipped 12000 mt of pepper in January 2013. Pepper imports by U.S. the largest consumer of the spice declined 9% in 2012 period to 62,458 tn as compared to 68,489 tn in 2011. 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. Brazil exported 25,900 tn pepper during Jan-Nov 2012, around 20% lower compared with 32,650 tn in the same period last year. Exports from Malaysia 8,300 tn pepper during Jan-Oct 2012, lower by 30% last year while exports in October stood at 1,077 mt in.
Source: Telequote

Technical Outlook
Contract Black Pepper NCDEX Apr Futures Unit Rs/qtl

valid for Mar 25, 2013 Support 35600-35780 Resistance 36200-36420

Production and Arrivals


The arrivals in the spot market were reported at 21 tonnes while off takes were reported at 22 tonnes on Saturday. As per IPC, Global pepper production in 2012 is projected at 3.27 lk tn, up compared with 3.18 lk tn in 2011. Production for 2013 is projected at 316832 tn. Indonesian pepper output is expected to rise by 24% and in Vietnam by 10%. According to estimates, pepper output in Vietnam is estimated to be 1.05 lakh tonne in 2012 as compared to 1.1 lakh tonne in 2011. Brazil is also expected to produce 22,000 tn this year. 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: Pepper trade board) Pepper production in 2012-13 is expected around 60,000-63,000 tonnes. Currently, pepper is in the fruit formation stage in Kerala.

Outlook
Pepper is expected to trade on a mixed note today. Prices may gain as low stocks coupled with good demand from the upcountry markets may support prices at lower levels. Reports that farmers are holding back stocks may also support prices at lower levels. However, improvement in arrivals may pressurize prices at higher levels.

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Commodities Daily Report


Monday| March 25, 2013

Agricultural Commodities
Jeera
Jeera Futures traded on a negative note last week due to higher arrivals of the new crop. However, good export demand supported in the spot. The arrivals of new crop are averaging around 26,000 bags/ day and are expected to improve in the coming days. New crop from Rajasthan is expected to enter the markets from April. Higher sowing as well as conducive weather in Gujarat, the main jeera growing region has increased output expectations. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.352 lakh ha in 2013 compared with 3.719 lakh ha last year. According to the Rajasthan State Budget 2013-14, it has exempted jeera from VAT. The spot as well as the Futures settled 0.49% and 2.34% lower w-o-w. According to markets sources the exports target has already been achieved due to a supply crunch in the global markets. Supply concerns from Syria and Turkey still exists. Expectations are that export orders may still be diverted to India from the international markets due to lack of supplies from Syria on back of the ongoing civil war. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,400 tn (c&f Europe) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 5-6 lakh bags.

Market Highlights
Unit Jeera Spot- NCDEX (Unjha) Jeera- NCDEX Apr '13 Futures Rs/qtl Rs/qtl Last 13384 13053 Prev day -0.10 -0.36

as on March 23, 2013 % Change WoW -0.49 -2.30 MoM -2.80 -2.81 YoY 4.74 7.03

Source: Reuters

Technical Chart Jeera

NCDEX April contract

Production, Arrivals and Exports


Arrivals in Unjha were reported at 30,000 tn on Saturday. Production of Jeera in 2012-13 is expected around 38-40 lakh bags (55 kgs each), same as last year. According to Spices Board of India, exports of Jeera in April 2012 stood at 2,500 tonnes as compared to 2,369 tonnes in April 2011, an increase of 6%.
Source: Telequote

Market Highlights
Prev day 0.00 -0.03

as on March 23, 2013 % Change

Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Apr '13 Futures Rs/qtl Rs/qtl

Last 6477 6614

WoW -1.05 -2.16

MoM 19.23 6.92

YoY 64.28 50.94

Outlook
Jeera Futures may trade with a negative bias today Arrivals of the new crop may pressurize prices. However, export as well as domestic demand may cushion the downside in the prices. In the medium term, prices are likely to stay firm as Syria and Turkey have stopped shipments.

Turmeric
Turmeric Futures traded on a negative note last week due to higher supplies at higher levels. However, good export demand coupled with output concerns cushioned a sharp downside. Traders have received fresh orders from many other states. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes. Higher supplies of the new crop have capped sharp gains in the spot. The Spot as well as the Futures settled 1.05% and 2.16% lower w-o-w.

Technical Chart Turmeric

NCDEX April contract

Production, Arrivals and Exports


Arrivals in Erode and Nizamabad mandi stood at 9,000 bags and 11,000 bags respectively on Friday. Expectations are that production may be lower by 40-50%. There are reports of some crop damage in Erode region. Turmeric production in 2012-13 is expected around 50 lakh bags. Production in Nizamabad is expected around 12 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. It is estimated that next years carryover stocks would be around 10 lakh bags. According to Spices Board of India, exports of Turmeric in April 2012 increased by 1% at 7,300 tn as compared to 7,230 tn in April 2011. Outlook Turmeric is expected to trade on a mixed note. Fresh export as well as domestic demand coupled with crop damage and lower output concerns may support prices. However, higher carryover stocks coupled with higher margin on the long side may cap sharp gains.

Source: Telequote

Technical Outlook
Unit Jeera NCDEX Apr Futures Turmeric NCDEX April Futures Rs/qtl Rs/qtl

Valid for Mar 25, 2013


Support 12850-12950 6500-6560 Resistance 13200-13400 6670-6720

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Commodities Daily Report


Monday| March 25, 2013

Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton declined sharply last week by 6.04% and 3.38% respectively after the Commerce Minister said that Cotton Corporation of India would offload stocks in the open market. Low demand from domestic millers has also pressurized prices over the last few days. The government has decided to continue with the current cotton exports policy. Traders expect exports to cross governments estimates of 8 mn bales. Finance Minister announced various incentives and policies in the Union Budget to support the ailing textile industry. Cotton supplies since the beginning of the year in October 2012 until February 10, 2013 were down at 183.4 lakh bales, down from 189.27 lakh bales a year earlier.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 925.5 18320

as on March 23, 2013 % Change Prev. day WoW -1.91 -6.04 -1.29 -3.38 MoM -4.98 -3.38 YoY #N/A 8.79

NCDEX Kapas Apr Futures MCX Cotton Mar Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 87.29 81.35

as on March 22, 2013 % Change Prev day WoW -1.03 -5.63 0.00 0.00 MoM 6.09 0.00 YoY -2.61 -29.20

Domestic Production and Consumption


According to Cotton Advisory Boards (CAB) estimates (23 Jan 2013) for 2012-13 season that commenced in October, domestic cotton production is pegged 330 lakh bales, down from the previous years estimates of 353 lakh bales. However, higher exports and domestic consumption can be met through revised higher opening stocks of 40 lakh bales and higher imports. After witnessing record exports in 2011-12 season, Indian exports could witness significant fall this season on the back of lower availability along with unattractive domestic cotton prices. CAB estimates cotton exports at 80 lakh bales this season, compared with 128.8 lakh bales last year.
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Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates


Cotton declined sharply for the third day by 1.03% extending previous days losses on reports that that India and China will release cotton from government stocks. Prices had shot up last week due to positive exports sales data. Prices are trading near year high levels. USDA, in its monthly crop report cut global cotton stock estimates on higher demand which cushioned a sharp downside in the prices. Buying by mills has also lifted the prices. Expectations of good demand from China supported prices at lower levels. U.S. growers will harvest the smallest cotton crop in four years and notch the smallest exports in 12 years as world demand for the fiber drops, especially in China. At its annual Outlook Forum, USDA projected a crop of 14 million bales from planted acreage of 10 million acres. Plantings would be the smallest in four years and down 19 percent from last year. The crop, projected to be down 18 percent from 2012, would be the smallest since 2009. China is planning to issue more cotton import quotas to exportdependent textile mills that are struggling to protect margins as domestic prices soar due to a state stockpiling plan. However, according to USDA, the world's largest cotton grower and user, will import the smallest amount of cotton, 8 million bales, in five years in 2013/14 as it copes with huge domestic reserves.
Source: Telequote

Source: Telequote

Technical Chart - Cotton

MCX March contract

Outlook
Cotton prices are expected to continue to decline today as the CCI has said that it will offload stocks in the open market. Low demand from mills may also pressurize prices. However, farmers may not sell their stocks at such low levels. The prices may also take cues from the international markets. Expectations that China may release higher import quota which might boost exports also supported an upside in the cotton prices. Also, expected lower US cotton acreage and output in 2013-14 may also support prices at lower levels.

Technical Outlook
Contract Kapas NCDEX April Futures Cotton MCX March Futures Unit Rs/20 kgs Rs/bale

valid for Mar 25, 2013 Support 910-920 18190-18250 Resistance 935-945 18430-18540

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