daily agri report, may 08
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Commodities Daily Report
Agricultural Commodities
Wednesday| May 08, 2013
www.angelcommodities.com
Content
News & Market Highlights
Chana
Sugar
Oilseed Complex
Spices Complex
Kapas/Cotton
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Market Highlights (% change) as on May 07, 2013
Last Prev. day WoW MoM
Sensex 19889 1.09 1.97 0.78 1
Nifty 6044 1.21 1.91 0.74 1
INR/$ 54.07 -0.13 0.71 0.43 Nymex Crude Oil - $/bbl 95.62 -0.56 2.31 1.73 -
Comex Gold - $/oz 1449 -1.30 -1.58 -1.27 -1
.Source: Reu
India’s fertiliser asset hunt yields no harvestIndia’s bid to acquire fertiliser assets in at least a dozen countries ov
the past two years has come a cropper. Not one project, coveted direct
by the centre, state-run or private companies, has been bagged. This h
put a big question mark on the government’s efforts to insulate t
country against global price volatility in fertilisers and its impact
subsidy outgo and supply of nutrients. India pays a huge subsidy bill of
1,00,000 crore on fertilisers annually. Though the prime minister’s tea
has been directly lobbying for projects abroad, success has eluded them
What came in the way was political risks, environmental concerns, lackfiscal incentives, raw materials or gas for these projects. Be it ure
potash, rock phosphate, ammonia or phosphoric acid, not one overse
project has come India’s way. (Source: Financial Chronicle)
Indian cane, cotton farmers pray for rains to end multi-ye
droughtWith the countdown to India's monsoon underway, farmers in parch
western and southern states are desperate for plentiful and timely ra
to help the region recover from its worst drought in four decades. T
country's biggest sugar and cotton producing states, Maharashtra a
Gujarat, are in this region and if they have another year of poor rains
some experts have hinted - shortages in India could raise global prices f
the commodities. India's monsoon season starts around June 1. T
southern and western region, which is the size of southern Europe,already wilting as temperatures hit 47 degrees Celsius in some area
Even a fortnight's delay in the rains could spell disaster. India is one
the world's biggest producers of sugar, grains and cotton. The monsoo
is crucial for around 55 percent of its farmland, which lacks irrigatio
and can often mean the difference between the country being
exporter or importer of staples. ( Source: Reuters)
Sweet season for cane farmers crushing time for industryThe sugarcane crushing season which is nearing its end in UP, has
many ways been unprecedented this year. The 40,000 farmers in t
state are happy despite the fact that the season is still a few days aw
from being officially closed & the sugar factories still owe the farmers
whopping Rs 6533.19 crores as dues. At 74.6 lakh tone, the sug
production in India this season is the 2nd
highest ever since 2006-
season. (Source: Financial Express)
India's cheap food plans to prove costly for governmentIndia may soon pass a new law to give millions more people cheap foo
fulfilling an election promise of the ruling Congress party that could co
about $23 bn a year and take a third of annual grain production. T
National Food Security Bill, which aims to feed 70% of the populatio
could widen India's already swollen budget deficit next year, increasi
the risk to its coveted investment-grade status. The ambitious bill,
priority for Congress President Sonia Gandhi, will raise India's annu
food subsidy spending by 45%. It promises wheat and rice at a fraction
the cost to some 810 mn people, expanding current handouts to rough
318 mn of India's poorest. Critics say the food bill is little more than
attempt to help Congress, reeling from corruption scandals, win r
election in a vote expected by next May. (Source: Reuters)
News in brief Government lowers wheat procurement target by 25% to 33mtWith private players aggressively buying wheat directly from farmers, the
Government today revised its procurement target downward by 25% to
33 mt for the 2013-14 marketing year, which will help the Centre save
about Rs 3,000 crore. In view of the higher output, the Government had
pegged wheat procurement at a record 44.12 mt in the currentmarketing year that started in April, as against 38.1 mt last year.
According to the revised estimate, the Government is expected buy 11
mt in Punjab, 7 mt in Haryana, 9 mt in Madhya Pradesh, 3 mt in Uttar
Pradesh and 2.5 mt in Bihar this year. The expected drop in wheat
procurement will reduce the burden on storage and help the
Government save about Rs 3,000 crore, thereby bringing down the
overall Food Subsidy Bill, the official said. The reasons for lower
procurement, the official said unlike in previous years, private players
such as roller millers have stepped up their wheat buying directly from
farmers because they have realised from the last few years’ experience
that they would not get cheaper grain under the Government’s open
market sale scheme (OMSS) later. ( Source: Business Line)
Farm Sector to lose 4 millionn workersThe country’s agricultural sector is projected to lose 4 mn workers in the
12th
plan period, the Govt told parliament on Tuesday. As per 11th
five
year plan document of the planning commission, the agricultural sector is
projected to contribute no increase in the 11th
plan and a net decrease of
4 mn agriculture workers in the 12th
plan period. There is no potential for
massive increase in agriculture sector. However, the indirect
employment is likely o increase with rise in farm production particularly
in agro processing & support infrastructure. (Source: Financial Express)
India to be world’s top rice exporter for second straight yearIndia could export 8.3 mn tons of rice this year, making it the world’s
leading rice exporter for two years in a row, the FAO said today. India last
year surpassed Thailand as the top exporter for the first time in three
decades, shipping 10.3 mn tons of milled rice compared with Thailand’s7.0 mn. The FAO’s Rice Market Monitor report projected Asia’s rice
production in 2013 to rise 2.2 per cent, to 452 mn tons of milled rice. The
FAO attributed the increased production to good weather and
Government price supports for farmers in India and Thailand. It
estimated that India’s stockpile would reach 22 mn tons by year-end
2013, down 7.6 per cent from 2012, while Thailand’s will reach 16.3 mn
tons, up 29 per cent from 2012. (Source: Business Line)
Rs. 4995 crore centre subsidy to provide ration sugar at existing
ratesProf. K.V.Thomas, Minister of Consumer Affairs, Food and Public
Distribution has informed Lok Sabha today that the Central Government
is providing subsidy for distribution of sugar through fair price shops in
the Targeted Public Distribution System (TPDS) at a uniform Retail Issue
Price (RIP) throughout the country. He said that the Central Government
has considered the recommendations of Dr. C. Rangarajan Committee on
de-regulation of sugar sector on 4.4.2013 and, has, inter-alia, decided to
do away with levy obligation on sugar mills. However, to make sugar
available in the TPDS at the existing RIP of Rs.13.50 per kg., the Central
Government would reimburse the subsidy @ Rs.18.50 per kg, limited to
the quantity based on the States/UTs existing allocations. Considering
that the States /UTs quota is about 27 lac tons, the total subsidy would
amount to approximately Rs. 4995 crores. Prof. Thomas further said that
under the new dispensation, State Governments/UT Administrations
would procure sugar in a transparent manner from the open market and
claim subsidy from the Central Government for the quantity distributed
in the TPDS. The guidelines for claiming subsidy are being framed and
would be issued shortly.( Source: Press Information Bureau, GOI)
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Commodities Daily Report
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Market Highlights as on May 07, 201
% change
Unit Last Prev day WoW MoM
Chana Spot - NCDEX
(Delhi)
Rs/qtl 3400 0.00 0.00 -3.55 -
Chana- NCDEX
May'13 Futures
Rs/qtl 3398 0.74 -0.99 -3.08 -
Source: Reut
Technical Chart - Chana NCDEX June contract
Source: Teleq
Technical Outlook valid for May 08, 201
Contract Unit Support Resistance
Chana May Futures Rs./qtl 3410-3445 3500-3525
ChanaChana June futures recovered from lower levels yesterday on account of
short coverings and settled 0.52% higher. Stockists buying at lower levels
supported prices. There are reports of lower yield in MP due to
unseasonal rainfall in February. Prices have declined sharply over the last
few weeks on account of supplies of the new crop coupled with higher
output estimates. Demand from stockists also remains dull.Higher supplies of the new crop from the major producing states such as
Madhya Pradesh, Rajasthan and Maharashtra is seen pressurizing prices
in the physical markets.
However, concerns over the yield in Madhya Pradesh, the largest chana
producing state, due to unfavorable weather conditions has been seen
supporting prices at lower levels. Chana prices may find support at lower
levels as stockists will build inventories at lower levels to meet the
demand for the entire season.
Demand supply scenario
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 chanaand as part of its strategy to encourage farmers to grow more pulses to
reduce import dependence.
Chana sowing in the current season 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.
According to third advance Estimates released on 3rd
May 2013, Total
pulses output for 2012-13 season has been pegged at 18 mn tn, up 5.76%
compared to previous year. The target for 2012-13 pulses crop output
was set at 18.24 million tonne during the year. Out of the total pulses
output, kharif output is estimated at 4.03% lower at 5.95 mn tn while
rabi pulses output is pegged 9.25% higher at 12.05 mn tn compared with
the final estimates of 2011-12.
Chana output is pegged marginally lower to 8.49 mn tn compared with
its second advance estimates of 8.57 million tonnes. However,Chana
output is expected to breach its 2010-11 record of 8.2 mn tn in 2012-13.
Erratic weather in M.P. lowered 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).
Trade Scenario
According to IBIS, imports of chana in the month of February declined to
0.46 lakh metric tonnes compared to 2.31 lakh metric tonnes during the
previous month.
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 2012 –13 is estimated to have
increased to a record 713000 tones as compared with 485000.
Outlook
We expect Chana prices to continue to decline today. Increasing arrivals
of the new crop may pressurize prices at higher levels. However, value
buying is expected emerge at lower levels. Improvement in demand from
stockists may also support prices at lower levels. Overall output in the
current season is comparatively higher and thus no major upside is
expected over a medium term.
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Market Highlights as on May 07, 2013 % Change
Unit Last Prev. day WoW MoM Yo
Sugar Spot- NCDEX
(Kolhapur) Rs/qtl 3041 -0.05 0.35 -0.90
Sugar M- NCDEX
May '13 Futures Rs/qtl 2928 0.48 -0.34 0.93
Source:
International Prices as on May 07, 2013
% Change
Unit Last Prev day WoW MoM
Sugar No 5- Liffe-
May'13 Futures
$/tonne 494 -0.56 -2.20 -2.06
Sugar No 11-ICE
May '13 Futures
$/tonne 392.00 -0.95 -0.17 -0.17
.Source:
Technical Chart - Sugar NCDEX June contract
Source: Te
Technical Outlook valid for May 08, 20
Contract Unit Support Resistance
Sugar May NCDEX Futures Rs./qtl 2920-2940 2970-2980
SugarSugar June Futures traded on a flat note yesterday. Prices made a fresh
contract low of Rs. 2945 in early trades as higher supplies from mills have
been seen offsetting the summer demand. However, improvement in
demand from the bulk consumers supported prices at lower levels. Sugar
prices in the domestic markets are consolidating at lower levels. The spot
as well as the June Futures settled 0.05% and 0.03% lower on Tuesday.
The Government has cleared the partial decontrol of sugar in April.
According to this, the government will now have to buy sugar from the
mills at open market prices. Also the release mechanism will be done
away with, after September 2013. States will decide on the FRP of cane.
Indian sugar mills produced 23 million tonnes of the sweetener between
Oct. 1 and March 31, about 2 percent less than a year earlier.
The Central Government has decided to make available quantity of 104
lakh tons of sugar, as non-levy quota for open market sale, for the 6
months of April, 2013 to September, 2013.
Domestic Production and Exports
According to ISMA, India’s Sugar production between October-
April stood at 24.52 mn tn, lower by 3% during the same periodlast year. Maharashtra’s production dipped 10% to 8 mn tn while
production in Uttar Pradesh increased by 7% to 7.43 mn tn.
India is likely to produce 24.6 mn tn of sugar in 2012-13 year ending on
Sept. 30, higher than the previous estimate of 24.3 mn tn, the Indian
Sugar Mills Association (ISMA) said last week.
With the opening stocks of 6.5 mn tn, domestic Sugar supplies are
estimated at 30.8 mn tn against the domestic consumption of around 22.
5 mln tn for 2012-13. Exports are not viable as international prices have
also declined significantly.
A severe drought in top sugar producing Maharashtra state has been
affecting new plantation and is likely to affect on sugar production in the
year starting from Oct. 1, 2013.Global Sugar Updates
Liffe sugar as well as ICE Raw Sugar settled 0.56% and 0.95% lower on
Tuesday, on account of higher supplies from Brazil. Sugar prices in the
international markets are trading at their lowest levels in since July 2010
on account of a global surplus situation for the third consecutive year.
According to Unica, South-Central Brazil cane crush projected at 589.60
million tons for 2013/2014. Main center-south sugar cane crop will
produce a record 35.5 mn tn of sugar in the 2013/14 season, higher by
4.1% compared to 34.1 mn tn last year.
Heavy rain in the cane belt of top world sugar producer Brazil has slowed
early progress of an expected record cane harvest. Brazil's sugar
production will jump to a record level in the 2013/14 season just now
starting, with a surge in cane output from an expanded planted area,favorable weather and efforts to renew old and less productive cane
plants.
Expectations of abundant supplies from the 2013-14 harvest in the other
leading producers, such as Thailand, Mexico and the United States have
kept prices under pressure. Sugar prices are trading around 2½ year lows.
Outlook
Sugar is expected to trade on a mixed note today. Prices may consolidate
at lower levels over the next few days. Improvement in demand from the
bulk manufacturers will support prices at lower levels. A decline in sugar
production may also support prices at lower levels. However, supplies
will continue to remain high as millers will release stocks to clear cane
arrears. This will offset summer season demand.
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Market Highlights as on May 07, 20
% Change
Unit Last Prev day WoW MoM
Soybean Spot- NCDEX
(Indore)
Rs/qtl 4021 -0.25 -0.07 -0.57
Soybean- NCDEX May '13
Futures
Rs/qtl 4002 -0.12 1.77 -0.66
Ref Soy oil Spot-
NCDEX(Indore)
Rs/10 kgs 726.6 -0.99 -1.76 1.60
Ref Soy oil- NCDEX May
'13 Futures
Rs/10 kgs 712.9 -0.81 -0.90 0.03
Source: Reuter
as on May 07, 2
International Prices Unit Last
Prev
day WoW MoM
Soybean- CBOT-
May'13 Futures
USc/
Bushel 1464 1.32 -0.29 7.47
Soybean Oil - CBOT-
May'13 Futures
USc/lbs 49.09 0.82 -0.08 0.53 -
Source: Reuters
Crude Palm Oil as on May 07, 201
% Change
Unit Last
Prev
day WoW MoM
CPO-Bursa
Malaysia – May
'13 Contract
MYR/Tonne 2238 0.40 -0.49 -5.41
CPO-MCX- May
'13 Futures
Rs/10 kg 457.2 -0.02 -1.66 -1.27
Source: Re
RM Seed as on May 07, 20
Unit Last
Prev
day WoW MoM
RM Seed Spot-
NCDEX (Jaipur)
Rs/100 kgs 3388 -0.40 -2.26 -4.91
RM Seed- NCDEX
May '13 Futures
Rs/100 kgs 3379 -0.27 -2.14 -5.14
Source: Reuters
Technical Chart – Soybean NCDEX June contra
Source: Teleq
Technical Outlook valid for May 08, 2013
Contract Unit Support Resistance
Soy Oil May NCDEX Futures Rs./qtl 680-683 690-694
Soybean NCDEX May Futures Rs./qtl 3840-3865 3915-3945
RM Seed NCDEX May Futures Rs./qtl 3390-3405 3445-3465
CPO MCX May Futures Rs./qtl 452-455 459-462
OilseedsSoybean: Soybean futures corrected from higher levels on account
of profit taking. However, poor supplies in the domestic markets
supported prices at lower levels. Gains have also been capped on
the back of IMD’s prediction of a normal monsoon. According to the
3rd
Advance Estimates, Soybean output is pegged at 14.14 mn
tonnes. The spot as well as the Futures settled 0.25% and 0.49%lower on Tuesday.
Special Margin (in Cash) of 10% on the Long side has be imposed in
Soyabean May 2013, June 2013 & July 2013 expiry contracts with
effect from beginning of day Tuesday, April 30, 2013.
India’s soy meal exports in April are likely to fall to 200,000 tonnes,
down 36 percent from a year ago, unless buying from Iran improves.
Exports of Soybean meal during March, 2013 was 3,20,265 tonnes as
compared to 4,61,892 tonnes in March, 2012 lower by 30.66% y-o-y.
International MarketsSoybean gained 1.32% on Tuesday on concerns over delays in
planting in the Midwest coupled with tight supplies of the old soy
crop. Farmer selling has slowed down. Expectations of lower ending
stocks in USDA’s Monthly crop report to be released next week alsosupported prices. Large South American crop coupled with forecasts
for US weather to improve in the coming week have capped sharp
gains. Sentiments remain weak on account of smooth supplies from
Brazil coupled with demand fears amid bird flu in China.
China’s soybean imports were reported at 3.98 mn tonnes in April
2013, lower by 18.4% in April last year, but marginally higher
compared to 3.84 mn tonnes in March. The decline is attributed to
delays in shipment from Brazil coupled with weak demand on the
back of outbreak of the bird flu.
Brazil's government lowered its forecast for the 2012/13 soybean
crop from 82.1mn tn to 81.9 mn tn.
Refined Soy Oil: Ref soy oil as well as MCX CPO settled 0.81% and
0.2% lower on Tuesday on account weak domestic soybean prices.
Indian government increased the base import price on crude
soybean oil by US $9 per tons to US $1103. Besides, base import
price on crude palm oil set at US $ 824 and reduced base import
price on palmolein crude as well as refined to US $ 864 per tons and
US $861 per tons.
Imports of all vegetable oils, including non-edible oils, fell 7.5 per
cent to 896,714 tn in March, pulled down by the drop in palm oil
imports. Palm oil imports dropped 12% to 708,262 tn in March.
Malaysia, the world's No.2 palm oil producer, set its crude palm oil
export tax for May at 4.5 percent, unchanged from April.
Exports of Malaysian palm oil products from April 1 to 25 increased
5.2% to 1,123,129 tonnes from 1,067,140 tonnes shipped during
March 1 to 25.
Rape/mustard Seed: Mustard June Futures declined by 0.49% on
Tuesday on account of higher supplies of the new crop. Sowing of
Mustard seed is 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%.
OutlookSoybean prices may trade on a mixed note. Positive international
markets as well as poor supplies in the domestic markets may
support prices. However, forecast of a normal monsoon coupled
with weak meal export demand may pressurize prices. Soy oil may
decline tracking weak soybean prices. CPO may gain tracking
positive KLCE prices. However, comfortable stock levels may cap
sharp upside.
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Market Highlights as on May 07, 2013
% Change
Unit Last
Prev
day WoW MoM
Jeera Spot- NCDEX
(Unjha)
Rs/qtl 13375 -0.40 0.08 -1.83
Jeera- NCDEX May
'13 Futures
Rs/qtl 12650 -0.88 -1.84 -7.24 -
Source: Reu
Technical Chart – Jeera NCDEX June contract
Source: Telequ
Market Highlights as on May 07, 2013
% Change
Unit Last
Prev
day WoW MoM Yo
Turmeric Spot-
NCDEX (N'zmbad)
Rs/qtl 6009 -1.80 -7.03 -6.04 78.
Turmeric- NCDEX
May '13 Futures
Rs/qtl 5830 -3.99 -9.11 -11.21 56.
Technical Chart – Turmeric NCDEX June contrac
Source: Telequ
Technical Outlook Valid for May 08, 2013
Unit Support Resistance
Jeera NCDEX May Futures Rs/qtl 12500-12620 12940-1315
Turmeric NCDEX May Futures Rs/qtl 5780-5850 6010-6090
JeeraJeera June futures declined by 1.02% on Tuesday and hit a fresh
contract low of Rs. 12717.50 due to weak demand from the domestic
as well as international markets. Higher production estimates have
also pressurized prices. Good supplies from Rajasthan also pressurized
prices. However, arrivals have started to slow down from its peak,
supported prices at lower levels. Domestic as well as overseas demand
is expected to improve in the coming days. According to Gujarat State
Agri Dept. sowing in Gujarat is reported at 3.352 lakh ha in 2013compared with 3.719 lakh ha last year. According to the Rajasthan
State Budget 2013-14, it has exempted jeera from VAT.
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 $2,400-2,425 tn (FOB Mumbai) while Syria and Turkey are
not offering. Carryover stocks of Jeera in the domestic market is
expected to be around 8-9 lakh bags.
Production, Arrivals and Exports
Arrivals in Unjha were reported at 13,000 lakh bags on Tuesday.Production of Jeera in 2012-13 is expected around 38-40 lakh bags (55
kgs each), same as last year.
Exports of Jeera between Apr 2012- Jan 2013 stood at 64,400 tn, an
increase of up 86%. (Source: Factiva)
OutlookJeera Futures is expected to trade with a negative bias today. Higher
output and weak demand may pressurize prices. However, any
improvement in overseas as well as domestic demand may support
prices. Overall trend remain positive for the Jeera prices as they are
likely to stay firm as Syria & Turkey have stopped shipments.
Turmeric
Turmeric June Futures declined sharply and hit the lower circuit filteryesterday on higher supplies and huge carryover stocks. Domestic as
well as overseas demand is also reported to be weak. However, there
are expectations of improvement in overseas demand in June.
Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes
of turmeric earlier. The spot as well as the Futures settled 1.8% and
3.94% lower on Tuesday.
Production, Arrivals and ExportsArrivals in Erode and Nizamabad stood at 4,000 bags and 6,000 bags
respectively on Tuesday.
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 45 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 year’s
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 with a negative bias today. Weak
exports data coupled with higher supplies of the fresh crop and huge
carryover stocks may pressurize prices at higher levels. However,
export demand coupled with demand from stockists may support
prices at lower levels. Crop damage and output concerns may also
support prices at lower levels.
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Market Highlights as on May 07, 2
% Change
Unit Last Prev. day WoW MoM
NCDEX Kapas Apr
Futures
Rs/20 kgs 1039 -0.91 -1.66 13.06
MCX Cotton May
Futures
Rs/Bale 17960 -1.32 -0.61 -0.61
Source: R
International Prices as on May 07, 2
% Change
Unit Last Prev day WoW MoM
ICE Cotton USc/Lbs 86.01 0.82 0.56 -2.63
Cot look A Index 94.8 1.39 1.72 -0.94
Source: Re
Technical Chart - Kapas NCDEX April contract
Source: Te
Technical Chart - Cotton MCX May contract
Source: Te
Technical Outlook valid for May 08, 2013
Contract Unit Support Resistanc
Kapas NCDEX April ’14 Fut Rs/20 kgs 1020-1030 1050-1060
Cotton MCX May Futures Rs/bale 17700-17830 18050-181
KapasNCDEX Kapas as well as MCX Cotton settled 0.91% and 1.32% lower
respectively on Tuesday on expectations CCI and NAFED will offload
stocks in May after an unsuccessful bid to offload of 2.5 lakh bales of
cotton in April 2013.
However, prices recovered in the later part of the session and settled
higher on account of emergence of fresh demand at lower price levels.Also, firm international markets supported an upside in the prices.
The Cotton Corporation of India (CCI) and the National Agricultural
Cooperative Marketing Federation of India (NAFED) are expected to
offload over 8 lakh cotton bales (a bale weighs 170 kg) in the domestic
market this month and the asking price may be lower by Rs 1,000 per
candy than the previous price.
In April, the government had offered a price of Rs 39,500 per candy,
which received lukewarm response from the textile industry. (Source:
Economic Times dated 6th
May 2013)
India's imports of cotton this year could reach 1.5 mn bales, missing
earlier estimates of more than 2 mn as the govt may to start selling its
stockpiles.
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.
Domestic Production and Consumption
CAB in its latest meet has projected cotton crop at 34 mn bales for 2012-
13 season compared to the previous estimates of 33 mn bales.
Mill consumption is expected to go up from 22.3 million bales last year to
23.5 million bales.
Exports are estimated at 8.1 mn bales. While Import are estimated 2.5
mn bales.
Global Cotton Updates
ICE Cotton futures extended the gains of the previous session and settled
0.82% on Tuesday on strong export sales data and U.S. plantings delays
which prompted worry over upcoming supplies.
US export sales for the week ending April 25 reached 314,400 running
bales, up 32% from previous week and most since mid-January.
According to China Cotton Association, China will continue with its
stockpiling policy this year which will boost imports.
According to the USDA report, planting intentions for the 2013-14 season
are said to be at a 4 year low. Also, there are expectations of good
export demand from China. Reports of India and China releasing stocks
from the state reserve led to a decline in the prices.
USDA has initially forecasted US Cotton acreage for 2013-14 season, at
smallest in 20 yrs, however, with recent surge in prices, farmers may
decide to plant more cotton. The planting intention data is schedule to
be released on 28th march 2013.
Outlook
We expect Cotton prices to trade on mixed note today. Prices may gain
tracking firm international markets. US cotton planting intentions were
reported at a 4 year low. China will continue its stockpiling policy, may
also support prices.
In the domestic markets, sharp upside will be capped as offloading from
the state reserves may ease supplies in the short term.