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News & Market Highlights Chana Sugar Oilseed Complex Spices Complex Kapas/Cotton
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Agricultural Commodities
News in brief
Govt hikes sugarcane FRP by 23.5% to Rs 210/qtl for 2013-14
The government today increased the sugarcane price that mills are required to pay to farmers by 23.5 per cent to Rs 210 per quintal for the year starting October 2013. The Fair and Remunerative Price (FRP), the minimum price that sugarcane farmers are legally guaranteed, was at Rs 170 per quintal in the 2012-13 marketing year (October-September). "The Cabinet Committee on Economic Affairs (CCEA) has approved sugarcane FRP for 2013-14 at Rs 210 per quintal. This is an increase of Rs 40 per quintal from the last year," Food Minister K V Thomas told reporters after the meeting. The CCEA has approved the proposal of the Food Ministry, which was in line with the recommendation of the Commission for Agricultural Costs and Prices (CACP) that suggested Rs 40 increase in the FRP at Rs 210 per quintal for 2013-14. Thomas said the sugar production forecast for the ongoing 2012-13 marketing year has been revised upward to 24 mn tns from 23.5 mn tns. "Earlier, we had estimated sugar output for 2012-13 at 23.5 mn tns. Now, this has been revised to 24 mn tns, whereas the industry body ISMA estimated 24.2 mn tns," the minister said. This year's production is expected to slightly lower than 26 mn tns achieved in 2011-12 but sufficient to meet the domestic demand of 22 mn tns, he added. (Source: Financial Express)
Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz
.Source: Reuters
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Agricultural Commodities
Chana
After witnessing downside pressure during the last three consecutive sessions, Chana futures settled marginally higher on short coverings and settled 0.28% higher. Prices have declined sharply in the past three sessions on commencement of arrivals in Maharashtra. Spot prices declined 1.54% on Thursday. Prices had gained in the previous week on reports that extreme cold in North may hamper chana crop yield. However, with commencement of harvesting, prices have again come under downside pressure.
Market Highlights
Unit Rs/qtl Rs/qtl Last 3808 3550 Prev day -1.54 0.28
as on Jan 31, 2013 % change WoW MoM -2.99 -3.30 -1.25 -8.46 YoY 18.41 11.46
Source: Reuters
Sowing progress
Total pulses acreage as on 18th Jan 2013 stood at 1142.33 lakh ha, down by 0.6% yoy. As on 11th Jan 2013, pulses acreage was up by 0.4%. Chana sowing is almost complete and acreage so far is at 91.9 lakh ha, up by 3.4% as on 18th Jan. Chana acreage is marginally higher by 3% this year in Rajasthan at 14.80 lakh ha, In Maharashtra, Chana acreage is up at 10.92 lakh ha as on 11th Jan 2013 vs normal area of 10.6 lakh ha and 2012 area of 7.04 lakh ha. While in AP it is up at 7.14 lakh ha as on 11th Jan 2013, up by 26%. (Source: State farm dept)
Technical Outlook
Contract Chana Apr Futures Unit Rs./qtl Support
3460-3510
Trade Scenario
In Australia, total chickpea production in 201213 is estimated to have increased to a record of around 746000 tones as compared with 485000 tons in 2011-12. 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.
Outlook
Chana Futures remain weak as arrivals pressure will gradually increase in the coming weeks. However, weather will play a crucial role in determining Chana crop yield in Rajasthan, the second largest chana producing state.
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Agricultural Commodities
Sugar
Sugar futures continued with its downward trend for the seventh consecutive session on account of higher supplies in the domestic markets. Prices touched an intraday low of Rs 3097 per qtl and again recovered to settle at Rs 3141 after the announcement of cane support price by the central government. India has fixed FRP (Fair and Remunerative Price),the price sugar mills must pay to cane growers at 210 rupees per 100 kg in the 2013/14 year, compared to current years 170 per qtl. Though the federal government revises the cane floor price every year, some state governments invariably raise the rate to woo farmers, a large political constituency. Higher floor price increases the cost of production as the raw material cost constitute the major part of cost of production of sugar. This should actually increase the prices of sugar. But the supplies are huge in the global and domestic markets which is restricting the upside in the sugar prices. Raw sugar futures on ICE as well as Liffe white sugar traded on a positive note extending previous days gains on Thursday supported by a decision by the Brazilian government to raise wholesale prices for gasoline and diesel and settled 0.52% and 0.37% higher respectively. A supply glut situation on the back of a sugar surplus for the third consecutive year has led to a sharp downside in the prices. Currently the prices are trading around 2 year lows.
Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Feb'13 Futures Rs/qtl Last 3239
as on Jan 31, 2013 % Change Prev. day WoW -0.33 -0.76 MoM -0.44 YoY 11.14
Rs/qtl
3147
-1.32
-2.02
-3.11
9.31
Source: Reuters
International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 499.4 417.33
as on Jan 31, 2013 % Change Prev day WoW 0.52 0.37 2.48 1.57 MoM -4.64 -3.74 YoY -20.70 -20.02
.Source: Reuters
Source: Telequote
Technical Outlook
Contract Sugar Feb NCDEX Futures Unit Rs./qtl Support
3095-3120
Outlook
Sugar futures may remain sideways as hike in cane price and thereby increase in sugar production cost may force government to take some measures to increase sugar prices. This would negate the effect of huge supplies in the domestic markets. Fundamentals remain weak for the sugar markets with supplies exceeding the domestic consumption. Also exports remain unviable amid weak international markets.
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Agricultural Commodities
Oilseeds
Soybean: Soybean futures gained sharply during the early part of
the session taking cues from the firmness in the international markets. However, prices declined towards the end on profit taking and settled marginally higher by 0.37%. Arrivals in the domestic markets declined to 1.5 lakh bags, while demand is comparatively lower amid crushing disparity. Soy meal exports fell by 34% in December to 5.10 lakh tn, according to SOPA. The country had exported 7,78,382 tn in December 2011. During the first three months of the current oil year (Oct-Sep), exports declined by 27% to 10.78 lakh tn.
Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Feb '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Feb '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3349 3288 759.8 737.4
as on Jan 31, 2013 % Change Prev day 0.90 0.37 0.50 0.25 WoW 1.45 0.50 0.56 1.67 MoM 0.96 2.05 7.36 5.28 YoY 35.81 34.10 10.48 7.93
International Markets
Soybean futures on the CBOT settled 0.67% lower on Thursday on some rains in Argentina. Concerns about rains in Argentina have led the prices to rise to a six week high earlier this week. Dry weather is starting to threaten soybean yields in parts of Argentina's main crop belt. Oil World forecasts Argentinas 2012-13 harvest at 52.0 mn tn, down from 53 mn tn in December 2012, however, it is still higher compared with 39 mn tn produced in 2011-12 season. As of Wednesday, the report said 99.4 percent of 2012/13 soy had been planted, with only some northern areas of the Pampas grain belt left to plant. Soy seedings advanced by 2 percentage points over the week, it said. The U.S. Department of Agriculture (USDA) forecasts Argentina's 2012/13 soy crop at 54 million tonnes. Refined Soy Oil: Ref soy oil as well as CPO extended the gains of the previous session, but witnessed profit booking towards the end after the Reuters Poll forecasted second year of decline in crude palm oil prices. Malaysian palm oil product exports during January fell 7 percent to 1,458,475 tonnes from 1,568,510 tonnes in December, cargo surveyor Intertek Testing Services said on Thursday. India's palm oil imports rose 27.4% on month at 783,091 tn in December, boosted mainly by poor domestic supply of alternatives and attractive overseas prices due to record stocks in key supplier Malaysia. To reduce imports and protect domestic industries, govt lifted duty on crude palm oil from 0 % to 2.5 % and also stated that the base import price on crude palm oil which is currently $447 per ton may be reviewed fortnightly.
Source: Reuters
as on Jan 31, 2013 International Prices Soybean- CBOTMar'13 Futures Soybean Oil - CBOTMar'13 Futures Unit USc/ Bushel USc/lbs Last 1469 52.86 Prev day -0.69 0.49 WoW 2.32 1.44 MoM 3.51 7.53
Source: Reuters
as on Jan 31, 2013 % Change Prev day WoW 2.74 0.18 5.46 -0.70
Unit
CPO-Bursa Malaysia Feb '13 Contract CPO-MCX- Jan '13 Futures
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 4050 3455 Prev day -0.37 0.17
Outlook
Soybean complex is expected to trade on a positive note today due to dwindling supplies in the domestic markets. However, improvement in weather in Argentina may cap sharp upside. Mustard seed prices may trade lower on account of higher sowing of oilseeds. However, Prices reports of ground frost in Rajasthan which may hamper the mustard crop yield may limit the downside. CPO is expected to trade on a positive note today tracking bullish BMD prices.
Source: Telequote
Technical Outlook
Contract Soy Oil Feb NCDEX Futures Soybean NCDEX Feb Futures RM Seed NCDEX Apr Futures CPO MCX Feb Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl
valid for Feb 1, 2013 Support 729-733 3220-3250 3390-3420 443-446.50 Resistance 741-745 3320-3350 3480-3510 453-458
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Agricultural Commodities
Black Pepper
Pepper Futures opened higher extending previous days gains, but corrected from higher levels towards the end on account of profit booking. Pepper is trading on a bullish note on back of low stocks and thin supplies. There is a delay in harvesting due to lack of skilled labourers. Good winter demand also supported the prices. Prices have also increased due to arrivals of good quality pepper from Kerala. Earlier, prices had corrected as Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 8,000 tonnes. Harvesting of the fresh crop has commenced and is expected to gain momentum in the coming days. However, winter demand coupled with low stocks in the domestic markets has supported prices at lower levels. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot settled 0.57% higher while the Futures settled 0.33% lower on Thursday. 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 $8,400/tn(C&F Europe). Vietnams 550 GL is quoted at $6,500/tn, Malaysia and Indonesia Austa variety are quoted at $7,000/tn and Brazil black pepper is quoted at $6,600/tn.
Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Feb'13 Futures Rs/qtl Rs/qtl Last 40256 38745 % Change Prev day 0.57 -0.33
as on Jan 31, 2013 WoW 2.78 2.51 MoM 6.25 13.37 YoY 29.87 31.45
Source: Reuters
Source: Telequote
Technical Outlook
Contract Black Pepper NCDEX Feb Futures Unit Rs/qtl
Outlook
Pepper is expected to trade on a positive note today on back of low stocks coupled with thin arrivals. Winter buying demand may also support prices. However, higher output expectations may cap sharp upside. FSSAIs sealing of huge quantity of pepper has led to a squeeze in the supplies.
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Agricultural Commodities
Jeera
Jeera Futures opened higher on account of short coverings but corrected towards the end. Prices have corrected sharply over the last 5-6 weeks tracking higher sowing figures. Higher sowing as well as conducive weather in Gujarat, the main jeera growing region have pressurized prices. Sowing is complete. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.244 lakh ha till Jan, 2013 compared with 3.64 lakh ha last year. In Rajasthan, sowing is expected to increase by 10-15%. The spot settled marginally higher by 0.03% while the Futures settled 0.17% lower on Thursday. According to markets sources about 75% 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 $2,925-2,950 tn (c&f) 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 Mar '13 Futures Rs/qtl Rs/qtl Last 14000 13565 Prev day 0.03 -0.17
as on Jan 31, 2013 % Change WoW -1.13 -0.29 MoM -4.79 -8.22 YoY -8.88 -8.00
Source: Reuters
Market Highlights
Prev day 0.69 1.31
Outlook
Jeera may recover from lower levels as demand may emerge at lower levels. Demand from domestic traders and millers at lower levels may also support prices. Export demand at lower levels may also support prices. However, higher sowing figures coupled with conducive weather in Gujarat may pressurize prices. In the medium term, prices are likely to stay firm as Syria and Turkey have stopped shipments.
Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Apr '13 Futures
Turmeric
Turmeric Futures traded on a bullish note yesterday on back of lower arrivals as well as emerging demand at lower levels. Lower output expectations have also supported the prices. However, spot did not gain sharply on account of sluggish export demand. Huge carryover stocks have pressurized prices over the last few days. There are reports of some crop damage in Erode region. Expectations are that production may be lower by 40-50%. Production is expected around 55 lakh bags. It is estimated that next years carryover stocks would be around 10 lakh bags. There are reports that Turmeric Farmers Association of India have decided to fix their own MSP of Rs.10000/qtl. The Spot as well as the Futures settled 0.69% and 1.31% higher on Thursday.
Source: Telequote
Technical Outlook
Unit Jeera NCDEX March Futures Turmeric NCDEX April Futures Rs/qtl Rs/qtl
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Agricultural Commodities
Kapas
NCDEX Kapas & MCX Cotton traded on a negative note and settled 0.54% and 0.66% lower respectively. The Cotton Advisory Board, which met in Mumbai on Wednesday, has estimated cotton production this season (Oct 2012 to Sep 2013) will be 330 lakh bales against the previous estimates in October at 334 lakh bales. Also, exports and domestic consumption has been revised upward to 253 and 80 lakh bales respectively from 250 and 70 lakh bales estimated earlier. As on January 9 this year, nearly 38 lakh bales were registered for exports. Cotton Association of India (CAI) expects output to be around 353 lakh bales in 2012-13. ICE Cotton traded sideways with a negative bias and settled marginally lower by 0.01% on Thursday on reports of some cancellation of export orders. Prices have traded on a bullish note on hopes of demand from China led to a sharp increase over the week. Concerns about the quality of cotton to be released by China also supported the prices.
Market Highlights
Unit Rs/20 kgs Rs/Bale Last 913 16500
as on Jan 31, 2013 % Change Prev. day WoW -0.54 0.50 -0.66 0.79 MoM -8.10 0.79 YoY #N/A -5.28
Source: Reuters
International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 82.95 81.35
as on Jan 31, 2013 % Change Prev day WoW -0.01 0.07 0.00 0.00 MoM 10.39 0.00 YoY -11.95 -29.20
Source: Reuters
Source: Telequote
Outlook
Cotton prices may trade sideways with a positive bias today. Higher output expectations by Cotton Association of India have turned the sentiments negative for the cotton prices. However, downside may be limited as farmers may not sell their stocks at lower prices. Reports that the Government may purchase cotton from farmers to avoid distress sales may also support prices. Also, anticipated export demand from the neighboring countries may support prices.
Source: Telequote
Technical Outlook
Contract Kapas NCDEX April Futures Cotton MCX Feb Futures Unit Rs/20 kgs Rs/bale
valid for Feb 1, 2013 Support 895-905 16200-16500 Resistance 930-945 17000-17150
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