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Date: 30/10/2018 NCoMM

NCML Commodity Market Monitor

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NCoMM

NCML COMMODITY MARKET MONITOR

Cotton | Sugar | Soybean | RM Seed | Castor seed | Turmeric | Jeera

OUTLOOK

OTHER DATA Sowing progress | Advance estimates | Kharif and rabi MSP

Sugar | Tur | Paddy/Rice | Guar seed

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NCML COMMODITY MARKET MONITOR NCoMM

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Date: 30/10/2018 NCoMM

NCML Commodity Market Monitor

Fundamental Report

• Sugar prices traded firm amid increase in buying by stockiest and bulk

consumers for Diwali festival.

• As per market expert, demand may remain buoyant ahead of Diwali.

However, mills continued to sell at prevailing rates to ease their old stocks

as new crushing season is expected to start soon.

• Meanwhile, India is keen to sell more sugar to China to bridge widening

trade deficit. Moreover, increased demand for Indian sugar has driven up

export deals signed by domestic millers to about 3.5 lakh tonnes,

according to the All India Sugar Traders Association (AISTA).

• Traders and export houses are trying their best to ensure that mills make

most of the export incentives extended by the Central government for

export of 5 million tonnes of sugar in 2018-19.

• India’s sugar output is likely to decline marginally this year due to the

possibility of lower cane yields. The drop in output is being attributed to

white grub infestation in Maharashtra and water logging in the cane fields

of Uttar Pradesh.

• For 2018-19 sugar season Maharashtra government has reduced the

production estimate from 10.5 million tonnes to 10 million tonnes, while

the Industry expects it could be lower than that.

• Indian Sugar Mills Association has lowered India’s 2018-19 sugar

production estimate by 11.26% at 315 lakh tonnes as compared to its earlier

estimate of 355 lakh tonnes. Sugar production during the current 2018-19

SS is being reported to be lower than what was expected about 3-4

months back.

• The decline in sugar output would be beneficial for cane crushing mills,

which are apprehensive about starting production for the current season

amid fears of a worsening supply glut. India is estimated to have started

this season with over 10 million tonnes of surplus inventory, resulting in

lack of storage space for the new season output.

• The Maharashtra government has started issuing the mandatory crushing

licences required for the mills to begin production in the country’s top

sugar producing state.

• Mills in Uttar Pradesh, however, are waiting for the cane to mature and

hope to start crushing around Diwali.

• According to the First Advanced Estimate, India’s sugarcane output is

estimated around 384 million tonnes for 2018-19 compared to 377 million

tonnes in the previous year.

Mandi Price in Rs/Quintal

29-10-2018 22-10-2018 %Change

Kolhapur 3117 3092 0.80

Muzaffarnagar 3300 3260 1.22

Delhi 3291 3235 1.73

FUNDAMENTAL SUMMARY

Price Drivers Impact

Buying by stockiest and bulk consumers for Diwali festival

Bullish

Mills continued to sell at prevailing rates to ease their old stocks

Bearish

New sugarcane crushing season is expected to start

Bearish

India’s sugar production is estimated to be lower to 315 lakh tonnes in the current marking

Bullish

Maharashtra government has reduced the production estimate from 10.5 million tonnes to 10 million tonnes

Bullish

Export incentives extended by the Central government

Bullish

Based on Primary & Secondary Sources

2,100

2,400

2,700

3,000

3,300

3,600

3,900

Feb

-14

Au

g-1

4

Feb

-15

Au

g-1

5

Mar

-16

Se

p-1

6

Mar

-17

Se

p-1

7

Mar

-18

Oct

-18

Sugar - M-grade : Muzaffarnagar

SUGAR

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Date: 30/10/2018 NCoMM

NCML Commodity Market Monitor

Fundamental Report

• All-India progressive procurement of Rice as on 26th October 2018 was at 77.19 lakh tonnes against the procurement of 56 lakh tonnes in the corresponding period of last year. Higher procurement has been received from northern states of Punjab (42.72 lakh tonnes), Haryana (32.80 lakh tonnes).

• India’s Rice stocks in the central pool as on 01st October 2018 increased at around 19.74 million tonnes up by 19.2 per cent from 16.56 million tonnes recorded during the corresponding period last year, according to data from the Food Corporation of India (FCI). Highest stock could be seen in the state of Telangana (18.0 lakh tonnes) followed by Andhra Pradesh (16.18 lakh tonnes) and Haryana (11.65 lakh tonnes) and Uttar Pradesh (11.53 Lakh tonnes). The highest stock recorded of 33.96 million tonnes recorded in February 2018.

• According to the Ministry of Agriculture data, Kharif Rice acreage during 2018-19 season declined by 2 per cent at 384.19 lakh hectares as against 393.52 lakh hectares during 2017-18.

• As per the First Advance Estimates 2018-19, production of Kharif Rice during 2018-19 is estimated at 99.24 million tonnes. This is higher by 1.74 million tonnes than the last year’s production of 97.50 million tonnes. Further, it is higher by 6.64 million tonnes over the average production of Kharif Rice during the last five years.

• China recently sanctioned 4 more Indian Rice mills/companies to export rice. Now, 24 rice millers can export non-basmati rice to China. China is one of the largest rice producing and consuming countries in the world and imports 5 million tonnes of rice annually. India can export one million tonnes of rice to China.

• India’s basmati-rice exports are expected to pick up as key importer Saudi Arabia is set to adopt easy residue parameters to take delivery of consignments.

• Rice export in the month of August 2018 was 8.39 lakh tonnes in which basmati rice contribution were around 2.89 lakh tonnes and non-basmati rice export in the month of August was 5.50 lakh tonnes the importing countries of non-basmati rice were Cote d ivories, Benin and Indonesia followed by Madagascar.

• During 2017-18 (January-December) Bangladesh rice import forecast is lowered to 1.70 million metric tonnes (MMT). According to sources 1.62 MMT of rice was imported during January to September 2018.

• The Government increased the Minimum Support Price (MSP) of paddy common by Rs 200 per quintal to Rs 1,750 and for Grade A MSP increased by Rs 180 at Rs 1770 for the marketing year 2018-19 crop year starting from October.

Mandi Price in Rs/ Quintal

29-10-2018 22-10-2018 %Change

Abohar (1121) 3150 3210 -1.86

Narela (1121) 3330 3500 -4.85

Hanumangarh (1121)

3500 3550 -1.40

FUNDAMENTAL SUMMARY

Price Drivers Impact

Procurement of Rice reported at 77 lakh tonnes as against 56 lakh tonnes in the corresponding period

Bullish

Rice stocks with Government increased to 19.74 million tonnes up by 19.2 per cent from 16.56 million tonnes same period last year

Bearish

Decline in Rice acreage at 384.19 lakh hectares as against 393.52 lakh hectares last year

Bullish

Production of Kharif Rice in 2018-19 estimated higher at 99.24 million as compared to 97.50 million tonnes

Bearish

Expectation of higher export demand from China

Bullish

Higher Minimum Support Price for Paddy during 2018-19 season

Bullish

Based on Primary & Secondary Sources

1150.00

1350.00

1550.00

1750.00

1950.00

Sep

-17

Oct

-17

Dec

-17

Feb

-18

Mar

-18

May

-18

Jul-

18

Au

g-1

8

Oct

-18

Paddy : Sambha : Basti

RICE/PADDY

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Date: 30/10/2018 NCoMM

NCML Commodity Market Monitor

Fundamental Report

• Guar seed and Guar gum price so far this month rose by around 10 per

cent mainly due to strong buying by stockists and crushers amid lower

crop prospects.

• Guar seed and guar gum price will not sustain until exports of Guar gum

don't increase. Overall Guar fundaments are also positive due to fall in

production back- to -back this year, but the rise in prices is too sharp

and ahead of fundamentals.

• Crude oil prices and production in U.S are rising and thus industry

experts are optimistic that exports will rise in the coming months.

• According to traders, although crop is expected to be lower than last

year, but increased selling by farmers amid attractive rates resulted in

higher supply. The supply of Guar seed is likely to be on the higher side,

i.e. above 50,000 daily till Diwali and thereafter it is likely to reduce as

crop is lower than last year.

• Guar seed crop is expected to be much lower than what was

anticipated and it could be said more precisely only after tracking

arrivals in the month of November.

• According to various trade sources, Guar seed crop in the country this

season 2018-19 (Oct-Sept) could be around 45-55 lakh bags as against

60-70 lakh bags last year in 2017-18.

• As per trade sources, export of guar gum has decreased in the month

of September by 24.72 per cent compared to previous month. India

exported around 18406 tonnes of guar gum in the month of September

at an average FOB of $ 1765.31 per tonne compared to 23771 tonnes in

August at an average FOB of $ 1772.92 per tonne. Exports are expected

to remain low in October-18 as well.

• As per trade sources, export of guar split has decreased in the month

of September. Exports in the month of September are down by around

28.62 per cent compared to previous month. India exported around

4299 tonnes of guar split in the month of September at an average FOB

of $ 1446.82 per tonne. Of the total quantity, around 2660 tonnes and

1280 tonnes have been exported to China and Unites States

respectively.

• As per the latest Advance Estimates of Department of Agriculture

Rajasthan, Guar seed production for 2017-18 is estimated at 12.44 lakh

tonnes as compared to 14.04 lakh tonnes in 2016-17.

Mandi Price in Rs/ Quintal

29-10-2018 22-10-2018 %Change

Bikaner 4675 4575 2.18

Jodhpur 4703 4600 2.23

Deesa 4350 4395 -1.02

FUNDAMENTAL SUMMARY

Price Drivers Impact

Guar seed crop in the country this season 2018-19 could be around 45-55 lakh bags as against 60-70 lakh bags last year

Bullish

Strong buying by stockists and crushers amid lower crop prospects

Bullish

Expectation of rise in exports in coming months

Bullish

Decline in Guar gum and Guar split exports from India

Bearish

Profit booking at higher levels Bearish

Firmness in crude oil prices and Weak Rupee value against Dollar

Bullish

Based on Primary & Secondary Sources

2,900.00

3,200.00

3,500.00

3,800.00

4,100.00

4,400.00

4,700.00

May

-16

Au

g-1

6

No

v-16

Feb

-17

Jun

-17

Se

p-1

7

De

c-17

Mar

-18

Jul-1

8

Oct

-18

Guarseed : Bikaner

GUAR SEED

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Date: 30/10/2018 NCoMM

NCML Commodity Market Monitor

Fundamental Report

• Tur demand from retail markets has started improving amidst the

festive season and it would continue till November.

• Government is set to procure new crop at higher MSP of Rs 5675 and

around 30 to 40 % crop is expected to be procured by govt.'s agencies.

• There is an anticipation of lower yield in Maharashtra, Karnataka and

Gujarat due to moisture stress in the field.

• In Gulbarga market tur is being traded at Rs 3700-3900 per qtl.

depending on quality.

• For supporting Tur market government seems ready to start futures

in Tur. Government had banned futures in tur and urad in 2007 due to

unexpected spike in price. Various concerned ministries too seem in

favor of re-launching futures and a proposal in this regard may be sent

to SEBI this week and decision is expected by the end of October.

• Higher stock available in domestic market including central pool,

average to normal crop so far would not allow market to move one

way up despite higher MSP.

• On the other hand, likely higher export incentive (10 to 15%) and

uncertain weather may support tur cash market in the weeks ahead.

Import would be limited under restricted quota. However, any big

spike is unlikely as selling from central pool stock continues.

• As per the government’s final sowing report area sown under Tur is

45.83 lakh ha against 45.56 lakh ha sown till date last year and the

normal of 41.90 lakh ha.

• The production is expected to be about at 3.97 million tonnes in 2018-

19 despite crop loss in some parts of major producing states.

• As per the 4th advance estimates for 2017-18 28th Aug-2018. For Tur it

is 4.25 mn MT, higher than third advance estimate of 4.18 million

tonnes and lower than 4.87 million tonnes last year.

• States and UTs will be offered to lift 34.88 lakh tonnes of Tur, Chana,

Masoor, Moong and Urad at discount of Rs 15 per Kg over the

prevailing wholesale market price on first come first serve basis. This

will be one-time dispensation for a period of 12 months or complete

disposal of 34.88 lakh tonnes of pulses stock, whichever is earlier.

• As per the government data, tur imports dropped by 41% to 4.12 lakh

tonnes in 2017-18 fiscal from 7.04 lakh tonnes during 2016-17.

Mandi Price in Rs/ Quintal

29-10-2018 22-10-2018 %Change

Wardha 3600 3600 0.00

Mumbai 3400 3300 3.03

Akola (Avg cmie) 3700 3800 -2.63

FUNDAMENTAL SUMMARY

Price Drivers Impact

Expectation of relaunch of tur futures Bullish

Higher acreage compared to last year contrary to the expected decline

Bearish

Crop loss/damage in certain belts of UP, Karnataka & MP

Bullish

Discount of Rs 15 per kilogram on pulses over wholesale market price to states for distribution under welfare schemes.

Bearish

Festive season demand Bullish

Decrease in imports Bullish

Quantitative restriction of 2 lakh tonnes/annum on tur import

Bullish

Based on Primary & Secondary Sources

2500

6500

10500

14500

Jun

-15

No

v-15

Mar

-16

Au

g-1

6

De

c-16

Ap

r-17

Se

p-1

7

Jan

-18

Jun

-18

Oct

-18

Lemon tur FAQ-Myanmar origin : Mumbai

TUR

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Date: 30/10/2018 NCoMM

NCML Commodity Market Monitor

• Basmati price firms up on weak

rupee, low carryover stock

• Bajra procurement in Haryana may jump 10-fold

• Gujarat APMCs to go on strike from

November 1

• Sugar output seen falling to 31.5 mn

tonnes in 2018-19, lower than 2017-18

• India's groundnut output may fall 29%

this kharif season on lower rainfall

• ISMA cuts sugar output projection to

315 lt

• India likely to face hurdles in meeting

300-mn-kg tea export target

• Opinion | Indian agriculture’s problem

of scale

To purchase the India Commodity Year

Book 2018, contact us at

research@ncml.com

Official Production Estimates

Fourth advance estimates 2017-18 &

previous years’ estimates: Fourth

Advance Estimates 2017-18

MINIMUM SUPPORT PRICE (Rs/Qtl.)

Commodity 2017-18 2018-19

KHARIF **NEW**

Paddy Common 1550 1750

paddy grade A 1590 1770

Jowar Hybrid 1700 2430

Jowar Maldandi 1725 2450

Bajra 1425 1950

Ragi 1900 2897

Maize 1425 1700

Tur/Arhar 5450 5675

Moong 5575 6975

Urad 5400 5600

Groundnut 4450 4890

Sunflower seed 4100 5388

Soyabean black 3050 3399

Sesamum 5300 6249

Nigerseed 4050 5877

Cotton (Medium Staple) 4020 5150

Cotton (Long Staple) 4320 5450

RABI

Commodity 2017-18 2018-19

Wheat 1735 1840

Barley 1410 1440

Gram 4400 4620

Masur (Lentil) 4250 4475

Rapeseed/Mustard 4000 4200

Safflower 4100 4945

*includes bonus of Rs 200 per quintal

# includes bonus of Rs 100 per quintal

Commodity Latest Fortnight ago Month ago Year ago

29-Oct-18 15-Oct-18 01-Oct-18 30-Oct-17

Wheat 2006 2025 2015 1675

Chana 5300 5300 5200 4950

Rice/Paddy 3550 3500 3500 3100

Guarseed 4675 4312.5 4250 3550

Sugar 3272 3254.9 3300 3760

Tur 3925 3800 3800 3850

PRICE TRACKER

Link for commodity-wise and

market-wise prices and arrivals:

http://agmarknet.gov.in/PriceAndArriv

als/CommodityWiseDailyReport2.aspx

THE WEEK THAT WAS

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Date: 30/10/2018 NCoMM

NCML Commodity Market Monitor

0

Date: 30/10/2018 NCoMM

NCML Commodity Market Monitor

Action plan for Procurement of Pulses under PSS Scheme for KMS

2018-19, PSS Guidelines, MSP & FAQ Norms

0

Date: 30/10/2018 NCoMM

NCML Commodity Market Monitor

y

NCoMM QUIZ ANSWERS OF THE PREVIOUS WEEK

THESE PEOPLE ANSWERED CORRECTLY!

1. CAI has pegged Ind ia's 2018-19 cotton production ___________ last year.

_____________ lower than

2. SOPA has pegged India's 2018 -19 soybean production ___________ last year.

higher than

4.95 lakh tonnes

3. India's cumin ( jeera) production in 2016 -17 was

Sno. Full Name Location Sno. Full Name Location

1 Amit Relekar Mumbai 28 Karmvir Behal

2 Pratima Goswami Gurgaon 29 Nitin Laxman Tambe Satara

3 Ajendra Singh Chauhan Gurgaon 30 Ashwani Khurana Suratgarh

4 Kuldip Singh Gurgaon 31 Dattatray Manwar Savali

5 Mohammadrafi Gandhidham 32 Praveen Kumar Mundra Ellenabad

6 Navdeep Kaur Ludhiana 33 Amol Dilip Nikam Dhawarwadi

7 Ansar Kochin 34 Javeed . M Davanagere

8 Rakesh Kumar Raut Gurgaon 35 Mahesh Kumar Ramaswamy Gurgaon

9 Annasaheb Sargar Sangli 36 Purushottam Kumar Ahmedabad Gujarat

10 Satyanarayan Das Bairagi Alote 37 Brijendra Srivastava Lucknow

11 Krishan Pal Singh Solanki Ratlam 38 Dilip Namdeo Bhopal

12 Ranjeet Singh Sri Ganganagar 39 Nagina Chander Gowda Mumbai

13 Shanmukha Davanagere 40 Pavankumarsingh Gulbarga

14 Sanjay Singh Ellenabad-770 41 Suresh G Chennai

15 Vanisha Vij Delhi 42 Shashi Kumar Mishra Barauni

16 Vineet Poonia Ellenabad 43 Narendra Somarouthu Hyderabad

17 Sunny Karela Ellenabad 44 Om Singh Bikaner

18 Neha Sharma Gurgaon 45 Ansari Saddam Hussain Mumbai

19 Dadasaheb Salunkhe Tanang 46 Sandipkumar Nayak Ahmedabad

20 Anjali Gurugram 47 Babloo Kumar Gurgaon

21 Shimyonu Boddu Edumudi 48 Kumood Sharma Jodhpur

22 Rudrapaala Bharath Kumar Hydearabad 49 Dinesh Kumar Villupuram

23 Pampanagowda S Koppal 50 V Krishna Hyderabad

24 Anand Pandey Lucknow 51 Ranjit Pradhan Gurugram

25 Rajaram Bhilare Mumbai 52 Arun Kumar Gurugram

26 Pawan Joshi Haryana 53 Vinod Maurya Gurgaon

27 Aniket Sandage Alsand

THE LUCKY WINNER IS…

Anand Pandey S&P, Lucknow; Emp Id: 3655

CONGRATULATIONS!

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Date: 30/10/2018 NCoMM

NCML Commodity Market Monitor

Advisory Team

Nalin Rawal Head: CWIG nalin.r@ncml.com

Sreedhar Nandam Vice President: SCM sreedhar.n@ncml.com

Research Team

Suresh Solanki Assistant Manager: TCIG suresh.s@ncml.com

Akash Jaiswal Research Analyst: TCIG akash.j@ncml.com

Rajiv Kumar Associate: TCIG rajiv.ku@ncml.com

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