Commodities Daily Report

Thursday| February 28, 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

Thursday| February 28, 2013

Agricultural Commodities
News in brief
National Food Security scheme likely to be implemented first in Congress- ruled states
The United Progressive Alliance (UPA) governments ambitious social security programme the proposed National Food Security scheme could be implemented in Congress- ruled states ahead of others. The Budget, to be tabled tomorrow in Parliament, is likely to give substantial allocation to the programme. The Centre plans to launch the programme across the country simultaneously. However, given the opposition of some non- Congress- ruled states to certain provisions of the Bill, there is a possibility that Congress- ruled states might implement it first, said sources. Opposition- ruled states such as Bihar, Chhattisgarh, Tamil Nadu and West Bengal have raised objections to various provisions of the Bill. A Parliamentary standing committee had recommended that belowpoverty- line and above- poverty- line categories be merged. It had also said five kg of grain be given to a beneficiary per month at Rs. 3 a kg for rice, Rs. 2 for wheat and Rs. 1 a kg for coarse cereals. It also advocated that the coverage under the Food Security Bill be hiked to 67% from the earlier 64%, of which at least 75% should be in rural India and 50% in urban parts. The Budget is likely to clear the air in this regard. According to sources, the food ministry has accepted all major recommendations of the standing committee, barring merging the beneficiaries of the Antyodaya Anna Yojana into the uniform category. (Source: Business Standard)

Market Highlights (% change)

Last Prev. day

as on Feb 27, 2013

WoW MoM YoY

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

19152 5797 53.87 92.76 1595

0.72 0.62 -0.43 0.14 -1.24

-2.50 -2.46 -0.39 -1.80 1.12

-4.73 -4.57 -0.35 -3.82 -3.46

9.78 9.76 9.55 -14.55 -10.06

.Source: Reuters

Remove subsidy distortions to cut fiscal deficit

DAY ahead of the budget, the 2012-13 economic survey on Wednesday pitched for reversing the high level of distortionary subsidies to keep the runaway fiscal deficit under manageable levels. Controlling expenditure on subsidies will be crucial. Efforts need to be made to contain subsidies through better targeting, limit other expenditures, and raise revenues over time so as to take the revenue to GDP ratio to 200708 levels, the Economic Survey said. Open ended commitments such as uncapped subsidies are particularly problematic for fiscal credibility, because they expose fiscal marksmanship to the vagaries of prices. Subsidies have burgeoned in AprilDec 2012 to reach a figure of Rs 1,66,824 crore, said economic survey 2012-13. (Source: Financial Chronicle)

Subsidy bill for FY13 to surpass Budget estimate

With the subsidy bill for the financial year 2012- 13 set to exceed the Budget allocation of Rs. 1.9 lakh crore, the government plans to focus on better targeting and plugging leakage, according to the Economic Survey. At the same time, it says, Priority needs to be accorded to food subsidy, in view of the under- consumption of basic food by the poor and the extent of malnutrition. On this leading to a higher subsidy outgo, the Survey says this is a part of the challenge of prioritisation, to provide for this basic need while controlling other items of spending. It said the food subsidy has been growing at an average annual rate of 25.4 per cent in the past five years, of which the bulk goes to the Targeted Public Distribution System. (Source: Business Standard)

Subsidy for cardamom growers

Cardamom growers can avail the subsidy for the replanting scheme for the current financial year ending on March 31. The Spices Board is finalising the beneficiaries now and planters who have not availed of the scheme have to submit applications immediately. The subsidy can be availed of by all growers having area up to eight hectares. The total assistance provided for growers having area up to four hectares under this programme is Rs 34,816, which will be disbursed in two annual instalments of Rs 17,780 and Rs 17,036. An assistance of Rs 26,375, which will be given in two annual instalments of Rs 13,470 and Rs 12,905 will be provided to growers with holding size from four to eight hectares.
(Source: Business Line)

Natural rubber imports to get costlier

The Union government has decided to increase the import duty on natural rubber (NR) from Rs. 20 a kg to a maximum of Rs. 34.20 a kg. Growers would welcome the move, but the tyre industry is angry. The rise in tariff was decided at a meeting in Delhi convened by Commerce Minister Anand Sharma. Rubber Board Chairperson Sheela Thomas and MPs from Kerala attended. The ministry of commerce will soon issue a notification. The meeting decided to revise the duty structure based on the average price of the last three years or on current prices. Accordingly, the average price of 2010, 2011 and 2012, of Rs. 171 a kg, will be considered for the revision. Earlier, this was Rs. 102 a kg, based on the average prices of 2008, 2009 and 2010. So, while the rate of duty remains 20 per cent, the effective duty will rise. (Source: Business Standard)

Budget may not remove curbs on sugar industry

Even as the Economic Survey has pitched for decontrol of the sugar sector, there are indications that the decision may not be part of the Union Budget to be presented by Finance Minister P. Chidambaram on Thursday. Announcing the removal of levy and imposing an additional excise duty to enable the Government to finance the sugar purchases for the public distribution system as part of the Budget may not be politically expedient. It will give the Opposition just the right handle to dub the Budget as anti-people, sources in the know said. According to them, the decision to decontrol may be taken up separately by the Union Cabinet after the Budget, possibly next week. (Source: Business Line)

Calibrate import duty on edible oils: Survey

In order to boost domestic output of vegetable oil, the Economic Survey today suggested that import duty on cooking oils should be calibrated to protect the interest of farmers, consumers and processors. The recommendation comes in the backdrop of the government raising import duty on crude edible oil to 2.5% from zero, while defreezing the tariff value of all edible oils. India is one of the largest producers of oilseeds in the world. However, 50% of its domestic requirements are met through imports, which touched a record over 10 million tonnes last year. Considering this situation, it is time to frame a price band for edible oils in a manner that harmonises interests of domestic farmers, processors, and consumers through imposition of import duty at an appropriate rate, the Survey said. One instrument for promoting future domestic production is calibration of the import duty structure. (Source:
Business Line)

Millers stare at high wheat prices

Despite abundant stocks of wheat in the country, flour millers are bracing for higher prices, compared to last year. New wheat crop arrivals, which usually begin by now in Saurashtra ( Gujarat) and Madhya Pradesh, have been delayed due to the prolonged winter. In traditional wheat- growing states, such as Punjab, Haryana and Uttar Pradesh, arrivals are likely to start in the second week of April, provided temperatures start rising. As on February 1, government warehouses had 30.8 million tonnes ( mt) of wheat, against the quarterly buffer requirement of 8.2 mt. Wheat production in rabi 2011- 12 stood at 93.9 mt, while procurement stood at 38.1 mt. This rabi season, production is estimated at 94 mt, while government agencies aim to procure about 44 mt. (Source: Business Standard)

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Commodities Daily Report

Thursday| February 28, 2013

Agricultural Commodities
Chana
Chana Futures opened marginally lower extending the losses of the previous session, however, recovered towards the end on short coverings ahead of budget. Rising supplies of new crop in the domestic markets along with bumper output expectations have pressurized chana prices. Arrivals will increase further in the coming days as harvesting will commence in full pace in MP. The spot settled 0.73% lower while the Futures settled 0.33% higher on Wednesday. Ministry of Agriculture in its second advance estimates, have pegged, bumper chana output for 2012-13 season at 8.57 mn tn, up 11% from 2011-12 final estimates of 7.7 mn tn.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3474 3358 Prev day -0.73 0.33

as on Feb 27, 2013 % change WoW MoM -4.31 -11.39 -3.17 -5.41 YoY -8.83 -10.86

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 Feb 28, 2013 Resistance 3375-3400

3310-3335

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
Increasing arrival pressure may exert downside pressure on the chana prices in the coming days. 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

Thursday| February 28, 2013

Agricultural Commodities
Sugar
Sugar futures extended the losses of the previous session, however, recovered towards the end on short coverings ahead of budget. The spot as well as the Futures settled 0.31% and 0.26% lower on Wednesday. Prices have declined in the past few sessions on Governments decision to keep sugar import duty unchanged, which may boost cheaper imports further and keep domestic prices under pressure. Prices also declined as ISO forecasted higher global sugar surplus. The government last week said it 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. Food minister KV Thomas on Thursday said the government is likely to take a decision on decontrolling the sugar industry before the Budget. Food ministry has proposed dispensing with the regulatory release mechanism and abolishing the levy system.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Mar'13 Futures Rs/qtl Last 3178

as on Feb 27, 2013 % Change Prev. day WoW -0.31 -1.26 MoM -2.11 YoY 8.94

Rs/qtl

3060

-0.26

-2.08

-4.26

5.30

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMay'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 513.4 396.44

as on Feb 27, 2013 % Change Prev day WoW 0.90 0.28 2.43 -2.78 MoM 3.84 -4.75 YoY -21.31 -30.48

.Source: Reuters

Technical Chart - Sugar

NCDEX March 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 0.9% and 0.28% higher with firm commodity basket supported by weaker Dollar index. Crushing has commenced in parts of Brazil. A global surplus situation has led the prices to a sharp decline. Currently the prices are trading around their 2 year lows. The International Sugar Organization (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 Mar NCDEX Futures Unit Rs./qtl Support

valid for Feb 28, 2013 Resistance 3072-3082

3040-3051

Outlook
Finance minister will present the federal budget 2013-14 today and any decision with respect to sugar decontrol may have a positive impact on the sugar prices. Supplies of sugar in both domestic and international markets are huge and thus market need 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

Thursday| February 28, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean futures opened lower extending the previous
days losses but recovered towards the end due to lower domestic supplies coupled with positive international markets. 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
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 3379 3302 693 687.2

as on Feb 27, 2013 % Change Prev day -0.21 0.23 -1.35 -0.37 WoW -1.31 -2.87 -5.52 -6.37 MoM 2.05 1.43 -8.14 -5.28 YoY 29.22 24.70 -2.57 -3.78

Source: Reuters

as on Feb 27, 2013 International Prices Soybean- CBOTMar'13 Futures Soybean Oil - CBOTMar'13 Futures Unit USc/ Bushel USc/lbs Last 1458 49.27 Prev day 0.67 0.51 WoW -1.70 -5.38 MoM 0.67 -5.05
Source: Reuters

International Markets
Soybean Futures on CBOT gained by 0.67% on Wednesday due to improved demand from China coupled with delayed shipping from Brazil. Higher ending stocks estimates coupled with active selling by farmers in the US Midwest have pressurized prices in the last week. 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. Refined Soy Oil: Ref soy oil declined by 0.37% due to higher supplies while CPO gained by 0.04% on account of short coverings. 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 traded on a mixed note. Higher output expectations pressurized prices. Arrivals have commenced in Rajasthan and thus prices may decline further. However, prices recovered on account of short coverings and settled 0.18% higher on Wednesday. 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.

YoY 10.96 -8.91

Crude Palm Oil

as on Feb 27, 2013 % Change Prev day WoW 0.13 0.04 -4.74 -0.90

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

Last 2390 453.1

MoM 0.84 4.26

YoY -26.42 -15.51

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 3613 3407 Prev day -1.18 0.18

as on Feb 27, 2013 WoW -7.73 -1.82 MoM -7.71 -0.47

Source: Reuters

YoY 4.02 -6.48

Technical Chart Soybean

NCDEX March contract

Outlook
Soybean may trade sideways with a positive bias as 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 trade on a mixed note. Prices may rise on expectations of palm oil exports to improve gradually while output may fall due to seasonally lower yield. However, higher production estimates may pressurize prices.

Source: Telequote

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

valid for Feb 28, 2013 Support 681-684 3265-3284 3368-3385 456-459 Resistance 690-693 3320-3338 3425-3440 464-466

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Commodities Daily Report

Thursday| February 28, 2013

Agricultural Commodities h
Black Pepper
Pepper March Futures gained sharply yesterday as low stocks, thin supplies and delayed harvesting due to lack of skilled laborers have supported prices. Prices declined over the previous two session on account of improved arrivals of the new crop from Karnataka. 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 marginally lower by 0.36% while the Futures settled 2.17% higher on Wednesday. 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 $7,500/tn(C&F Europe). Vietnams Austa is quoted at $6,925-6,975/tn, Indonesia GM-1 is quoted at $6,900/tn and Brazil Austa is quoted at $6,600/tn.

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Mar'13 Futures Rs/qtl Rs/qtl Last 39600 37875 % Change Prev day -0.36 2.17

as on Feb 27, 2013 WoW -3.33 -9.24 MoM -0.42 0.42 YoY 8.96 -1.12

Source: Reuters

Technical Chart Black Pepper

NCDEX March 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, Total exports in 2012 were forecasted at around 1,10,000 tonnes. 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 Mar Futures Unit Rs/qtl

valid for Feb 28, 2013 Support 37280-37600 Resistance 38230-38570

Production and Arrivals

The arrivals in the spot market were reported at 45 tonnes while off takes were reported at 50 tonnes on Wednesday. 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 higher extending yesterdays gains as low stocks coupled with thin arrivals may support prices. However, improvement in arrivals may cap sharp upside. Reports that farmers are holding back stocks may also support prices at lower levels.

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Commodities Daily Report

Thursday| February 28, 2013

Agricultural Commodities
Jeera
Jeera Futures recovered from lower levels on account of short coverings. Prices have declined sharply over the last few days as the increasing arrivals of the new crop have pressurized prices. The arrivals of new crop are around 10,000-14,000 bags/day and are expected to increase 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 till Jan, 2013 compared with 3.64 lakh ha last year. In Rajasthan, sowing is expected to increase by 10-15%. The spot settled 0.29% lower while the Futures settled 1.3% higher on Wednesday. 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 $2,975-$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 13380 13053 Prev day -0.29 1.30

as on Feb 27, 2013 % Change WoW -3.34 -1.58 MoM -3.73 -2.37 YoY -6.82 -8.02

Source: Reuters

Technical Chart Jeera

NCDEX March contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 16,500 tn on Wednesday. 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 -0.05 -1.16

as on Feb 27, 2013 % Change

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

Last 5439 6154

WoW -0.31 -2.04

MoM 0.77 2.26

YoY 20.95 25.95

Outlook
Jeera Futures is expected to continue to trade lower as higher arrivals may pressurize prices. However, fresh overseas demand at lower levels may support prices at lower levels. In the medium term, prices are likely to stay firm as Syria and Turkey have stopped shipments.

Technical Chart Turmeric

NCDEX April contract

Turmeric
Turmeric Futures declined yesterday due to higher supplies of the new crop coupled with higher carryover stocks. However, lower output expectations supported prices in the spot. Prices have gained over the last few days due to some unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes. The Spot as well as the Futures settled 0.05% and 1.16% lower on Wednesday.

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 4,000 bags and 10,000 bags respectively on Wednesday. Expectations are that production may be lower by 40-50%. There are reports of some crop damage in Erode region. Turmeric production in 2012-13 is expected around 50 lakh bags. Production in Nizamabad is expected around 12 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. It is estimated that next years carryover stocks would be around 10 lakh bags. According to Spices Board of India, exports of Turmeric in April 2012 increased by 1% at 7,300 tn as compared to 7,230 tn in April 2011. Outlook Turmeric is expected to trade on a mixed note today. Higher carryover stocks and weak overseas demand may pressurize prices at higher levels while reports of some damage to the crop coupled with lower output concerns and demand from stockists may support prices at lower levels.

Source: Telequote

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

Valid for Feb 28, 2013

Support 12730-12870 6020-6080 Resistance 13160-13290 6256-6350

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Commodities Daily Report

Thursday| February 28, 2013

Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton settled 0.45% and 0.73% higher on Wednesday. Prices are on an uptrend as government last week decided to continue with current cotton exports policy. However, sufficient supplies pressurized prices at higher levels. Traders expect exports to cross governments estimates of 8 mn bales. 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 997.5 17980

as on Feb 27, 2013 % Change Prev. day WoW MoM 0.45 3.85 10.28 0.73 1.64 1.64 YoY #N/A 5.52

NCDEX Kapas Apr Futures MCX Cotton Feb Futures

Source: Reuters

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.
th

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 82.73 81.35

as on Feb 27, 2013 % Change Prev day WoW 2.99 0.55 0.00 0.00 MoM 2.07 0.00 YoY -7.93 -29.20

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

Cotton registered its largest one-day gain in six months on Wednesday and settled 3% higher as mills buying lifted prices. Prices have declined 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. At its annual Outlook Forum, USDA projected a crop of 14 million bales from planted acreage of 10 million acres. Plantings would be the smallest in four years and down 19 percent from last year. The crop, projected to be down 18 percent from 2012, would be the smallest since 2009. China is planning to issue more cotton import quotas to exportdependent textile mills that are struggling to protect margins as domestic prices soar due to a state stockpiling plan. However, according to USDA, the world's largest cotton grower and user, will import the smallest amount of cotton, 8 million bales, in five years in 2013/14 as it copes with huge domestic reserves.
Source: Telequote

Technical Chart - Cotton

MCX March contract

Outlook
Cotton prices may increase further in the intraday taking 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 Feb 28, 2013 Support 979-988 18030-18140 Resistance 1005-1015 18330-18410

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