Commodities Daily Report

Tuesday| March 05, 2013

Agricultural Commodities

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

Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narvekar@angelbroking.com (022) 2921 2000 Extn. 6130 Anuj Choudhary - Research Analyst anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132

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Commodities Daily Report

Tuesday| March 05, 2013

Agricultural Commodities
News in brief
Sugar output falls slightly to 18.8 mt so far: Isma
THE country produced 18.8 million tonnes of sugar in the first five months of the ongoing 2012-13 season that started from October 2012, slightly lower than the year-ago period, industry body Isma said on Monday. Production has started slowing down with 50-odd mills in Maharashtra and Karnataka closing crushing operations, it said and maintained that the countrys overall sugar output is estimated to be 24.3 million tonnes for the current year. 452 mills have crushed about 190 million tonnes of sugarcane, to produce 18.8 million tonnes of sugar. This is 60,000 tonnes less than last year, despite almost same quantity of sugarcane crushed in both years, Indian Sugar Mills Association (Isma) said in a statement. Maharashtra, the countrys largest sugar producing state, has produced 6.53 million tonnes of sugar till February of the current year, as against 6.5 million tonnes in the year-ago period. Sugar recovery was lower at 11.15 per cent and 30 mills have already closed their operations. (Source: Financial Chronicle)

Market Highlights (% change)

Last Prev. day

as on March 4, 2013
WoW MoM YoY

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

18878 5699 54.96 90.12 1572

-0.21 -0.37 0.10 -0.62 0.01

-2.35 -2.67 1.78 -3.21 -0.89

-5.11 -5.57 3.16 -7.56 -5.33

7.36 6.72 11.64 -17.20 -8.66

.Source: Reuters

91% of tea offerings sold at Coonoor sale

New price records have been created at Sale No: 9 of CTTA auctions when about 91 per cent of the years lowest offer of 10.97 lakh kg was sold. For the fourth consecutive week, Cross Hill Tea Factory, the oldest factory in Kotagiri region, topped the CTC market. Our broken orange pekoe fannings, auctioned by J. Thomas and Company, topped the market when Jai Tea Company bought it for Rs 197 a kg. This is the highest price fetched by this grade in all the auctions held so far this year. It is also the highest price fetched by this grade ever since manufacturing started in our factory 68 years ago, Cross Hill Operations Head Dinesh Raju told Business Line. (Source: Business Line)

IFC to promote Odisha agri-business, tourism

International Finance Corporation (IFC), an arm of the World Bank, will work jointly with Odisha government to promote private sector-led growth in the strategic sectors of agri-business and tourism, catalysing investments and creating jobs. As per the three-year partnership agreement between IFC and Odisha government, IFC will work with the state government to streamline regulation for investment, identify areas for improvement, and tap into opportunities in the private sector. In agribusiness, the project aims to facilitate investments in food processing and warehousing, storage and cold chain facilities. The project will also help the state develop as a tourism destination. (Source: Financial Chronicle)

Govt suffers Rs 875 cr loss on pulses import

The government has suffered a loss of Rs 875 crore on the imports of pulses during the last three years mainly due to reasons differences in the domestic and international prices, Parliament was informed on Monday. Due to the differential between domestic prices and international prices and exchange rate fluctuations, losses to the tune of Rs 875 crore were incurred in the last three years. These factors are well beyond the control of importing agencies, Commerce and Industry Minister Anand Sharma said in a written reply to the Lok Sabha.Imports are affected through designated state trading enterprises - STC, MMTC, NAFED and PEC, he said, adding that pulses imports are undertaken by the government on account of shortage in domestic supply.On the question that what corrective measures the government has taken in this regard, Sharma said: The schemes for 15% reimbursement of losses for import of pulses for PDS have been discontinued. (Source: Business Line)

Strong consumption may push up robusta coffee prices

Robusta coffee prices are likely to increase in the coming quarter on the back of higher demand from major consuming countries. Robusta prices are currently hovering around $ 2,100 a tonne. Prices have more or less been holding steady for the past year. The new trend in robusta consumption started last year following high prices for Arabica ( a species of coffee). The roasters and retail coffee chains started serving robusta, as it is considered to be good material for getting creamy coffee in the retail stores. Also, the instant coffee market started using more robusta variety. All these led to rise in the prices of robusta, said Nishant R Gurjer, chairman, Karnataka Planters Association. In addition, the robusta crop in Vietnam, the largest producer of the variety, is expected to be lower by 8- 12 per cent for the coming year, as the country is facing drought this year. (Source: Business Line)

Panel detects irregularities at Agri market yard in Warangal

An independent fact-finding committee has noted several irregularities and inadequate facilities at the Agriculture Market Committee at Warangal in Andhra Pradesh, leading to cotton farmers getting a price less than the MSP. The fact-finding committee, headed by Justice G. Bikshapathi, former Judge, AP High Court, was instituted by local farmers bodies, following complaints from farmers in the district. The committee observed that although the Cotton Corporation of India had issued notification for establishment of 11 cotton purchasing centres in the district to help farmers save on transportation, there was still a lone centre serving the farmers. (Source: Business Line)

Potato prices may crash as Bengal cold storages shut doors

Mamata Banerjees no fare hike policy may lead to a crash in potato prices in West Bengal. While potato production is estimated to be up by 12% this season, nearly two-fifth of the 400-plus cold storages in the State have decided to keep their doors shut, without a hike in rentals. The State had last raise the rentals for storage three years ago. This is despite a sharp 50% rise in storage costs, especially for energy, during the period. According to Ram Pada Pal, President, West Bengal Cold Storage Association, cold storages spend nearly Rs 150 for storing one quintal of potatoes during the storage season extending between midFebruary to end-November. The rental for storing potatoes is currently Rs 101 a quintal during the season. West Bengal and Tripura are the only two States in the country where potato cold storage rents are controlled by the State Government. Electricity tariffs have moved up by 50% from Rs 30 a quintal about three years back to Rs 45 at present, while diesel prices have increased by 48% from Rs 35 to Rs 52. Labour costs have also gone up during this period, thereby, exerting pressure on profitability. As many as 100 cold storages in the State are running at a cash loss and are unable to carry on operations this year, Pal said. (Source: Business Line)

Spices Board alerts Customs to act against illegal cardamom imports

In a bid to arrest the entry of cardamom illegally into the country, the Spices Board has alerted the Commissioners of Customs at major ports to take action against illegal imports through land-locked and border countries, such as Nepal, Bhutan, Bangladesh, Pakistan, etc. Even though the imports, according to official records, are an insignificant 200 tonnes, the trade is of the view that more could have entered the domestic market illegally. However, good export buying supported the market to remain nearly steady despite slack demand from upcountry markets at the auctions. Exporters were estimated to have bought 70 tonnes of above 7mm good colour capsules last week. (Source: Business Line)

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Commodities Daily Report

Tuesday| March 05, 2013

Agricultural Commodities
Chana
Chana April futures continued to decline yesterday and hit a fresh contract low of Rs 3302. Higher supplies in the domestic markets amidst ongoing harvesting coupled along with bumper output expectations have pressurized chana prices. Sharp downside was however, cushioned on the back of demand from the stockists at lower price levels. The Spot as well as the Futures settled 1.73% and 1.02% lower on Monday. In the union budget 2013-14, although no direct move was considered for Pulses, still The Finance Minister expressed concern about the supplydemand mismatch in pulses. He said that the aggregate demand is a concern. Stating that food inflation is worrying, he said the government would take all steps to augment the supply side.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3456 3308 Prev day -1.73 -1.02

as on March 4, 2013 % change WoW MoM -3.68 -5.07 -2.68 -4.94 YoY -4.71 -10.30

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

Source: Reuters

Technical Chart - Chana

NCDEX April contract

Pulses Sowing 2012-13

According to the final figures from ministry of agriculture dated 22 February 2012, Chana sowing is 3.6% higher at 95.15 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.
nd

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. 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 5, 2013 Resistance 3325-3340

3280-3295

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 is expected to continue to trade lower tracking increasing arrivals of the new crop coupled with higher imports. However, sharp downside may be capped as demand will emerge at lower levels. Also, prices may not sustain below Rs 3200 as farmers will not liquidate their produce below these levels.

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Commodities Daily Report

Tuesday| March 05, 2013

Agricultural Commodities
Sugar
Sugar futures opened higher on account of short covering but declined towards the end and hit a fresh contract low on account of rising supplies in the physical markets and delay in lifting curbs on the controlled sector by the government. March futures hit a fresh contract low of Rs. 2986 yesterday on account of higher supplies coupled with sluggish demand in the domestic markets. There was no announcement on decontrol of sugar by the Finance Minister in the 2013-14 budget. Prices also declined as ISO forecasted higher global sugar surplus. The spot as well as the Futures settled 0.05% and 0.3% lower on Monday.
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. Indias Agriculture Minister Sharad Pawar said that they are favoring Food Ministrys proposal to increase the production tax on Sugar from the current Rs. 0.71/kg by Rs. 1.5/kg if mills were freed from an obligation to sell the sweetener at lower prices for public distribution. 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 Mar'13 Futures Rs/qtl Last 3164

as on March 4, 2013 % Change Prev. day WoW -0.05 -1.12 MoM -2.22 YoY 8.22

Rs/qtl

2995

-0.30

-2.32

-3.23

4.43

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMay'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 515.6 401.78

as on March 4, 2013 % Change Prev day WoW 0.33 0.95 2.00 0.39 MoM 3.24 -3.73 YoY -20.37 -26.74

.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 settled higher by 0.33% and 0.95% respectively on Monday on account of short coverings. A global surplus situation coupled with ample supplies has led the prices to a sharp decline. Currently the prices are trading around their 2 year lows. Brazil exported 1.21 mt of raw sugar in February, vs 1.73 mt in January. The ISO last week had forecasted a global sugar surplus of 8.526 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. 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 5, 2013 Resistance 3075-3095

3010-3030

Outlook
Sugar prices are expected to continue to decline further on account of huge supplies of sugar in both domestic and international markets. The market needs strong signals to bring an upside rebound in the prices. It may be in the form of sugar decontrol or yield concerns over next years output.

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Commodities Daily Report

Tuesday| March 05, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean futures traded on a mixed note yesterday.
Lower domestic supplies supported the prices. However, profit booking pressurized prices. The spot settled marginally higher by 0.26% while the futures settled marginally lower by 0.18% Monday. Oil meal exports rose by almost 40 per cent to 7.68 lakh tonnes in January this year, industry body Solvent Extractors Association of India said. The export of oil meals, however declined by 18 per cent to 36.79 lakh tonnes in the first 10 months of this fiscal compared to 44.85 lakh tonnes in the year-ago period. The country exported 25.36 lakh tn soybean meal in first 10 months compared to 30.82 lakh tn in the same period last year which showing a decline of 17.72%. 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 Mar '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3406 3306 685.1 677.4 Prev day 0.26 -0.18 0.17 0.00

as on March 4, 2013

WoW 0.12 -0.56 -3.93 -2.92

MoM 1.19 0.03 -9.70 -8.84

YoY 27.37 22.22 -3.52 -4.66

Source: Reuters

as on March 4, 2013 International Prices Soybean- CBOTMar'13 Futures Soybean Oil - CBOTMar'13 Futures Unit USc/ Bushel USc/lbs Last 1490 50.05 Prev day 1.76 1.17 WoW 2.69 -0.04 MoM 1.48 -5.32
Source: Reuters

International Markets
Soybean Futures on CBOT traded on a bullish note on account of strong export demand. Also tight supplies of the old crop supported the prices. Informa Economics raised its estimate of Brazil's soybean harvest to 84.5 mn tn from its earlier estimates of 84 mn tn. German oilseeds analyst Oil World on Tuesday 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. Rainfall in Argentina's top soy-producing province revived wilting crops as many entered important growth stages, but others were still in urgent need of rain. 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.

YoY 12.96 -6.29

Crude Palm Oil

% Change Prev day WoW 2.13 0.61 -0.79 0.90

as on March 4, 2013

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

Last 2400 459

MoM 0.76 1.50

YoY -25.81 -16.03

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil opened higher on account of short
coverings but declined and settled unchanged. CPO settled 0.61% higher tracking positive international markets. Higher global production estimates of palm oil by oil world have pressurized prices at higher levels. Expected higher soy oil stocks in the US also exerted downside pressure on the prices. Global palm oil output is estimated at 55.3 mn tn in 2012-13, up by 3.4 mn tn. U.S. soybean processors say they have been pleasantly surprised by the high oil content of the latest U.S. soybean harvest, a factor that has contributed to strong profit margins and should pad year-end soy oil inventories. India's vegetable oil imports soared 27 percent from a month ago to an all-time high in January on purchases of cheap palm oil. 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%. Rape/mustard Seed: Mustard Futures declined 0.21% yesterday on account of higher output expectations. Arrivals have commenced in Rajasthan and thus prices may decline further. Mustard seed sowing 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.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Apr'13 Futures Rs/100 kgs Rs/100 kgs Last 3574 3364 Prev day -1.73 -0.21 WoW -4.41 -1.90

as on March 4, 2013 MoM -9.33 -3.11

Source: Reuters

YoY 3.04 -6.69

Technical Chart Soybean

NCDEX April contract

Source: Telequote

Outlook
Soybean may trade higher tracking positive international markets. Also, lower supplies in the domestic markets may support the prices. Mustard seed may remain weak on expectations arrivals to improve soon along with increase in output estimates. CPO may also decline as higher production estimates may pressurize prices. However prices may find support on expectations that output may fall due to seasonally lower yield.

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 5, 2013 Support 666-669 3250-3265 3340-3350 455457 Resistance 678-684 3300-3315 3375-3390 461-463

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Commodities Daily Report

Tuesday| March 05, 2013

Agricultural Commodities h
Black Pepper
Pepper March Futures traded on a positive note yesterday on account of short coverings. However, spot prices remained in the negative on account of increasing arrivals of the new crop from Karnataka. Prices have gained over the last couple of days due to low stocks, thin supplies and delayed harvesting on back of to lack of skilled laborers. Harvesting of the fresh crop is going in and is expected to gain momentum in the coming days. Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 8,000 tonnes. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot settled 0.88% lower while the Futures settled 0.53% higher on Tuesday. 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 $7,700/tn. 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 Mar'13 Futures Rs/qtl Rs/qtl Last 38225 36760 % Change Prev day -0.88 0.53 WoW -4.74 -1.72

as on March 4, 2013 MoM -6.23 -5.43 YoY 1.63 -4.89

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 5, 2013 Support 34080-34720 Resistance 35800-36240

Production and Arrivals

The arrivals in the spot market were reported at 17 tonnes while off takes were reported at 15 tonnes on Monday. 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 lower as improvement in arrivals may pressurize prices further. However, low stocks coupled with good demand from the upcountry markets may support prices. Reports that farmers are holding back stocks may also support prices at lower levels.

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Commodities Daily Report

Tuesday| March 05, 2013

Agricultural Commodities
Jeera
Jeera Futures traded higher yesterday on account of short coverings. Prices have declined last week as increasing arrivals of the new crop has pressurized prices. The arrivals of new crop are averaging around 15,000 bags/ day and are expected to improve in the coming days. 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 3.244 lakh ha in 2013 compared with 3.64 lakh ha last year. In Rajasthan, sowing is expected to increase by 10-15%. The spot as well as the Futures settled 1.29% and 0.97% higher on Monday. 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 $2,975-$3,000 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 13308 13028 Prev day 1.29 0.97

as on March 4, 2013 % Change WoW -0.92 0.81 MoM -5.21 -5.58 YoY -5.37 -4.67

Source: Reuters

Technical Chart Jeera

NCDEX April contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 22,000 tn on Monday. 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 0.14 2.39

as on March 4, 2013 % Change

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

Last 5415 6174

WoW -1.10 -0.87

MoM -0.94 0.13

YoY 23.60 30.69

Outlook
Jeera Futures may trade on a mixed note. Demand at lower levels may support prices. However, increasing arrivals may pressurize may prices. In the medium term, prices are likely to stay firm as Syria and Turkey have stopped shipments.

Turmeric
Turmeric Futures recovered sharply on account of short coverings. Higher supplies of the new crop coupled with higher carryover stocks have pressurized prices. However, lower output expectations supported prices. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes. The Spot as well as the Futures settled 0.14% and 2.39% higher on Monday.

Technical Chart Turmeric

NCDEX April contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 4,000 bags and 15,000 bags respectively on Monday. 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 may trade higher extending yesterdays gains. Reports of some damage to the crop coupled with lower output concerns and demand from stockists may also support prices. Fresh buying by stockists at lower levels may also support prices. However, higher carryover stocks and weak overseas demand are expected to pressurize prices from higher levels.

Source: Telequote

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

Valid for Mar 5, 2013

Support 12720-12930 6050-6120 Resistance 13310-13470 6270-6350

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Commodities Daily Report

Tuesday| March 05, 2013

Agricultural Commodities
Kapas
NCDEX Kapas and MCX Cotton continued to trade lower and settled 1.44% and 0.76% lower respectively as removal of duties from cotton led he prices to decline. However, sharp downside was capped as government decided to continue with 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 961.5 18210

as on March 4, 2013 % Change Prev. day WoW -1.44 -1.89 -0.76 2.30 MoM 6.89 2.30 YoY #N/A 6.12

NCDEX Kapas Apr Futures MCX Cotton Mar Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 84.91 81.35

as on March 4, 2013 % Change Prev day WoW 1.47 5.85 0.00 0.00 MoM 2.36 0.00 YoY -8.41 -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 traded higher extending previous weeks gains and settled 1.47% st on Monday higher as mills buying lifted prices. Prices reported its 1 weekly gains after declining for the last 3 weeks after touching a 9 month high due to lower world demand. However, mills buying and expectations of good demand from China have 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.
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Source: Telequote

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.

Technical Chart - Cotton

MCX March contract

Outlook
Cotton prices are expected to open lower extending yesterdays losses. However, prices may recover from lower levels as various policy announcements to support the textile industry may support prices. Also the prices may take cues from firmness in the international markets which registered a largest one day gain in the last six months on Wednesday. Expectations that China may release higher import quota which might boost imports 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.

Source: Telequote

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

valid for Mar 5, 2013 Support 940-950 18000-18100 Resistance 975-990 18340-18480

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