Commodities Daily Report

Thursday| March 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| March 28, 2013

Agricultural Commodities
News in brief
Groundnut exporters woes continue
The woes of Indian groundnut exporters dont seem to end. With Russia imposing a fresh ban on groundnut imports from India, the issue of quality compliance has surfaced again. In its notification earlier this year, the Agricultural and Processed Food Products Export Development Authority (Apeda) had asked all groundnut exporters to secure quality certificates from the competent authority. Many exporters had objected to this, challenging the new regulations in the Madras High Court. Now, even as a verdict is yet to be pronounced, the ban comes as a blow to the industry. Now, brand India is at stake. A rejection and ban from Russia has worried the industry. This requires stricter compliance with the rules for quality, said Rajesh Bheda, chairman, Indian Oilseed and Produce Export Promotion Council (IOPEPC). Last month, Russias federal service for veterinary and phytosanitary surveillance had suspended rice and peanut imports from India. According to data provided by Apeda, during the April- January period, groundnut exports from India stood at 4,55,415 tns, against 6,73,486 tns in the year- ago period. (Source: Business Standard)

Market Highlights (% change)

Last Prev. day

as on March 27, 2013

WoW MoM YoY

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

18705 5642 54.48 96.58 1606

0.12 0.14 0.33 0.25 0.65

-1.60 -1.82 -0.04 3.89 -0.08

-3.17 -3.57 0.37 3.70 2.15

9.69 8.82 6.76 -9.76 -4.70

.Source: Reuters

Sugar mills given free hand to sell open market quota

The Government, on Tuesday, gave freedom to sugar factories to sell their open market quota. Mills have now been given a free sale quota covering a period of six months, against the existing practice of fixing the quantity to be sold every month. On Tuesday, the Government released 10.4 million tonnes sugar for April to September, which mills can freely dispose of any time during these six months. In other words, they do not have to wait for quotas to be fixed every month. While this is certainly a move towards decontrol of the sugar industry, it has, however, also raised questions. When there is already talk of the Government dispensing with the release mechanism altogether along with freeing the industry from levy obligation, why have they announced this piecemeal measure? Does it mean decontrol is off for the moment, despite Food Minister K.V. Thomas saying that it will be taken up by the Cabinet on Thursday, an industry observer said. (Source: Business Line)

Indias per capita consumption of edible oil might rise 4%

With edible oil prices remained under pressure due to surplus availability from the worlds two leading producers -Malaysia and Indonesia - Indias per capita consumption of cooking oil is set to increase 4.19% in the current financial year. Price- sensitive low strata consumers that constitute around 40% of Indias edible oil demand are set to consume over 400,000 tn more of cooking oil this year, resulting in its demand per capita rising to 13.92 kg, compared to 13.36 kg last year. This, along with the continuous focus of the affluent class to concentrate more on outside foods, which is generally considered rich in oil, would raise Indias overall consumption of cooking oil to 17.55 mt this year, a rise of around 1 mt, or 6%, from the overall usage of the previous year. (Source: Business Standard)

P&K fertiliser subsidy may be slashed by Rs 2,000-2,700 a tonne

The Government is likely to cut the subsidy on phosphatic and potassic (P&K) fertilisers such as di-ammonium phosphate (DAP) and muriate of potash (MoP) by Rs 2,000-2,700 a tonne on account of weakening of global prices. The Fertiliser Ministry is expected to reduce the subsidy on DAP by Rs 2,000 per tonne to Rs 12,350 a tonne and that on MoP by Rs 2,700 per tonne to Rs 11,700 a tonne for the 2013-14 fiscal, an official in know of the development said. Under the nutrient-based subsidy regime introduced on April 1, 2010, retail prices of 22 varieties of P&K fertilisers have been freed, but the government reimburses companies the difference in cost of selling these soil nutrients at lower price to farmers. (Source: Business Line)

AP draft seed Bill leaves farmers disappointed

Farmers organisation and non-governmental organisation are irked over the draft Andhra Pradesh Seed Bill. According to them, it lacks clarity on issues such as pricing, seed producers and contamination of native seed varieties. The draft doesnt have any mention on contamination (one seed variety getting attributes of another by pollination caused by wind). We have seen incidence of multinational companies suing farmers for using certain traits illegally. The truth was the farmers seeds were contaminated, said Saraswati, a representative of National Alliance of Peoples Movements, commenting on the draft. The State Government is planning to introduce the Bill in the current session of Assembly that will meet again in the third week of April. (Source: Business Line)

Global food prices fall on lower demand, improved supplies World Bank
Global food prices have declined in recent months as lower demand for cereals and improved supplies pushed prices down, the World Bank said on Wednesday, warning that prices were still near record peaks and volatile. The World Bank's Food Price Index showed international prices of wheat fell by 11 percent, sugar by 10 percent and maize, or corn, by 6 percent during the four-month period between October 2012 and February 2013. The poverty-fighting institution said lower demand from a sharp fall in the use of wheat feed and declines in corn consumption for ethanol in the United States has pushed prices down. Favorable weather conditions in some regions have also raised hopes of better crop supply for 2013. (Source: Reuters)

A cotton variety that can withstand jassid pest

With reports suggesting resurgence of sucking pests, Shriram Bioseed has come out with a solution to address the problem. It sold 1.32 lakh packets of Yuava in the last kharif, which Paresh Verma, Research Director of Bioseed Research India claims, significantly reduces sprays to control sucking pests. Bioseed is an arm of the DCM Shriram Consolidated Limited. Sucking pests such as jassids have been causing severe losses to the cotton crop. (Source: Business Line)

Organic food may be exempt from farm products export ban

The Government may exempt organic products from export ban imposed on farm commodities from time to time to check the spiralling prices in the domestic market. The move, when implemented, is expected to give a boost to exports from the fast-growing sector by making supplies in the overseas market more predictable. The Commerce Department is formulating a proposal for exempting organic products from export ban on the lines of the recent exemption given to processed food and is expected to soon discuss it with other ministries concerned. (Source:
Business Line)

UK 2012/13 wheat imports revised up to 2.26 mln tonnes

Britain's wheat imports are forecast to rise sharply in 2012/13 after unseasonably wet weather reduced domestic production and quality, the farm ministry said on Wednesday. The ministry forecast wheat imports would more than double to 2.26 million tonnes, up from the ministry's previous estimate of 2.19 million tonnes, and the 2011/12 season's 908,000 tonnes. Cumulative imports for the 2012/13 season, which started on July 1 last year, had more than tripled to 1.61 million tonnes as at the end of January, versus 531,121 tonnes in the same period a year earlier, customs data showed earlier this month. (Source: Reuters)

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Commodities Daily Report

Thursday| March 28, 2013

Agricultural Commodities
Chana
After declining sharply on Monday, Chana futures witnessed short coverings and settled 0.69% higher. Prices had declined in the past few sessions on increasing arrivals of new crop in the physical markets coupled with higher output expectations. Arrivals have gained momentum in MP, the largest chana producing state and shall soon commence in Rajasthan, the second largest producer. Thus, sharp upside is capped in the chana prices. New chana desi crop contain around 10 -12% moisture. The government has extended ban on export of pulses till March 31, 2014. According to DGFT, there is an exception with export of kabuli chana, organic pulses and lentils being allowed up to a ceiling of 10,000 metric tonnes per annum.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3300 3357 Prev day -0.27 0.69

as on March 26, 2013 % change WoW MoM -4.85 -5.71 -1.24 0.30 YoY -5.83 -8.33

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

Source: Reuters

Technical Chart - Chana

NCDEX April contract

Chana Sowing
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. Chana sowing in the current season is 5.65% higher at 95.17 lakh ha compared to previous year. Acreage is up in Rajasthan, Maharashtra, MP and AP at 15.7 lakh ha, 12.53 lakh ha, 32.99 lakh ha and 7.33 lakh ha respectively.

Production
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. However, erratic weather in M.P. may lower the yield. Assocham estimates, 21 mn tn of pulses demand in 2012-13 and is likely to reach at 21.42 mn tn in 2013-14 and 21.91 MT in 2014-15. (Source: Agriwatch).
th

Source: Telequote

Technical Outlook
Contract Chana Apr Futures Unit Rs./qtl Support

valid for Mar 28, 2013 Resistance 3375-3390

3310-3335

Trade Scenario
According to IBIS, imports of chana in the month of February declined to 0.46 lakh metric tonnes compared to 2.31 lakh metric tonnes during the previous month. India imports Chana mainly from Australia and Canada and higher availability in these countries at comparatively cheaper rates is seen boosting imports of Chana to meet the domestic shortfall. In Australia, total chickpea production in 201213 is estimated to have increased to a record 713000 tones as compared with 485000.

Outlook
Arrivals of chana may increase further once harvesting commences from the second largest producing state, Rajasthan. Increasing arrival pressure may keep chana prices under downside pressure. However, robust buying by the stockists at lower levels may prevent sharp fall in the chana prices.

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Commodities Daily Report

Thursday| March 28, 2013

Agricultural Commodities
Sugar
Sugar futures which gained in the early part of the session on Tuesday on reports that government may take sugar decontrol decision this week, declined sharply after the release of higher non levy quota for the next six months. The Central Government has decided to make available quantity of 104 lakh tons of sugar, as non-levy quota for open market sale, for the 6 months of April, 2013 to September, 2013.
The Cabinet Committee on Economic Affairs will take up the issue of sugar decontrol during its meeting on Thursday, according to Union Minister of State for Food and Consumer Affairs K.V. Thomas. Barring two key regulations with respect to fixing sugarcane price and sharing of 70 per cent revenue by sugar firms with farmers, the Rangarajan Committee report has suggested giving freedom to mills to sell sugar in the open market and having a stable export and import policy.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Apr '13 Futures Rs/qtl Last 3039

as on March 26, 2013 % Change Prev. day WoW -0.53 -2.42 MoM -4.65 YoY 6.04

Rs/qtl

2915

-1.09

-2.54

-4.99

3.37

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMay'13 Futures Sugar No 11-ICE May '13 Futures $/tonne $/tonne Last 508.4 396.67

as on March 26, 2013 % Change Prev day WoW -1.05 0.39 -4.18 -2.72 MoM 0.57 -0.89 YoY -19.60 -26.42

Agriculture Minister Sharad Pawar said that the sugar output in 2013-14 may fall to around 24 mn tn against current years output of 24.5 mn tn. There are reports that some mills in Maharashtra have stopped crushing due to non availability of cane.

.Source: Reuters

Technical Chart - Sugar

NCDEX April contract

Domestic Production and Exports

India is likely to produce 24.6 mn tn of sugar in 2012-13 year ending on Sept. 30, higher than the previous estimate of 24.3 mn tn, the Indian Sugar Mills Association (ISMA) said last week. Indian sugar mills produced 21.05 mn tn of the sweetener between Oct. 1 and March 15, down 1% from a year ago. With the opening stocks of 6.5 mn tn, domestic Sugar supplies are estimated at 30.8 mn tn against the domestic consumption of around 22. 5 mln tn for 2012-13. Exports are not viable as international prices have also declined significantly.

Global Sugar Updates

Liffe sugar settled 1.05% lower on Wednesday on account of expectations of abundant supplies from the 2013-14 harvest in the centre-south of Brazil and other leading producers, such as Thailand, Mexico and the United States. According to FO Litch, Brazil's center-south sugar production is expected to reach 36.2 million tonnes in 2013/14, up from 34.1 million tonnes in the previous season. Czarnikow on Wednesday raised its forecast for a projected global sugar surplus to 9.1 mn tn, raw value, up from Decembers projection of 7.8 mn tn in 2012-13, citing higher-than-expected production in the key centresouth region of Brazil. The main adjustment on the production side is the increase in CS Brazil output following a successful end to the crushing season at a new record high of 34.1 million tonnes.

Source: Telequote

Technical Outlook
Contract Sugar Apr NCDEX Futures Unit Rs./qtl Support

valid for Mar 28, 2013 Resistance 2935-2960

2860-2885

Outlook
Continuous selling by mills at lower rates due to financial year ending and need based demand is keeping sugar markets under pressure. Although supplies continue to remain high in the domestic markets, we dont expect sugar prices to decline much from the current low levels considering a recovery in the international markets.

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Commodities Daily Report

Thursday| March 28, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean futures traded on a positive note on Tuesday on
account of lower supplies in the domestic markets. The spot settled as well as the April futures settled 1.19% and 2.25% higher on Tuesday. Exports of Soybean meal during February, 2013 was 5,77,589 tones as compared to 3,70,524 tonnes in February, 2012 showing an increase by 55.88% over the last year. 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 Apr '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Apr '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3732 3732 691 693.9 Prev day 1.19 2.25 0.25 1.23

as on March 26, 2013

WoW 3.64 2.80 0.65 1.12

MoM 10.22 13.30 -1.64 0.59

YoY 27.94 24.42 -7.01 -7.48

International Markets
Soybean Futures on CBOT traded on a mixed note and settled 0.41% as traders squared up their positions ahead of the US planting data for 2013 to be released on Thursday. Traders expect the planting intentions data to be projected at record high 78.4 million acres (Source Reuters). USDA will release its planting intention data on 28th March 2013 and market expects for record U.S. soybean plantings in 2013-14. Informa trimmed its forecast of U.S. 2013 soybean plantings to 78.457 million acres, from 78.777 million in January, but it is still up from the 77.198 mn acres seeded to soy in 2012. There are reports that China has cancelled some cargoes from Brazil due shipment delays. China's April imports will likely be less than 4.5 mn tn, lower than market expectations of about 5 mn tn, due to severe port congestion in Brazil that has delayed shipments.

Source: Reuters

as on March 26, 2013 International Prices Soybean- CBOTMay'13 Futures Soybean Oil - CBOTMay'13 Futures Unit USc/ Bushel USc/lbs Last 1454 50.82 Prev day 0.41 0.00 WoW 2.39 1.97 MoM 0.41 3.67
Source: Reuters

YoY 6.31 -6.92

Crude Palm Oil

as on March 26, 2013 % Change Prev day WoW 0.21 -0.11 -0.66 1.79

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

Last 2410 459.7

MoM -0.37 1.50

YoY -31.14 -22.01

Refined Soy Oil: Ref soy oil settled 1.23% higher on Tuesday
tracking positive soybean prices while CPO settled lower by 0.11% tracking weak BMD prices. India's imports of palm oil could rise more than 17% in the year to October 2013 to stand at 9 mn tn, compared with 7.67 mn tn of palm oil in 2011/12 as the edible oil is the cheapest available, despite an import duty. India's vegetable oil imports fell about 17 percent to 969,175 tonnes last month, with palm oil imports dropping to 805,362 tonnes. According to Dorab Mistry, Malaysian palm oil futures could rise to 2,400-2,700 ringgit ($770 to $865) per tons by the end of May due to weaker production and falling trend in palm oil inventories. By end of June 2013, Malaysian palm oil stocks will dip below 2 mn tn and Indonesian stocks would below 4 mn tn.

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 3417 3458 Prev day 0.06 0.73 WoW 0.37 1.53

as on March 26, 2013 MoM -6.54 1.68

Source: Reuters

YoY -10.63 -11.51

Technical Chart Soybean

NCDEX April contract

Rape/mustard Seed: Mustard Futures gained 0.73% on Tuesday

tracking positive edible oil market while increasing arrival pressure of new crop capped sharp upside. Higher output expectations also exerted downside pressure on the prices. Sowing of Mustard seed is up by 2.2% at 67.23 lakh ha. Agriculture ministry in its third advance estimates, pegged mustard output at 7.36 mn tn, up by 11.5%. MSP of mustard seed is fixed at Rs 3000 per qtl.

Outlook
Soybean prices are expected to trade with upward bias on dwindling supplies in the domestic markets. However, ongoing harvesting pressure in South America may cap sharp upside in the prices. It is crucial to keep close watch on US planting intention data to be released on Thursday. Higher than expected planting data may exert downside pressure on soy prices & vice a versa. Soy oil and CPO is expected to trade higher on expectations of higher exports, lower stocks. Prices may find support on expectations that output may fall due to seasonally lower yield.
Source: Telequote

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 28, 2013 Support 688-691 3645-3710 3420-3440 454-457 Resistance 699-702 3775-3810 3470-3490 462-465

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Commodities Daily Report

Thursday| March 28, 2013

Agricultural Commodities h
Black Pepper
Pepper Futures traded on a negative note due to higher supplies from Karnataka region. Karnataka crop is trading at lower levels due inferior quality. However, there is good demand for the Kerala crop. Interstate traders, especially from Tamil Nadu are actively buying the Kerala crop. Low stocks in the warehouses coupled with thin supplies have supported the prices. Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 8,000 tonnes. Some exports of Karnataka pepper from Mangalore port have been reported. However, exports demand for Indian pepper in the international markets is weak due to price parity. The Spot as well as the Futures settled 0.22% and 0.95% lower 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 $6,925/tn (C&F, New York). 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 Apr '13 Futures Rs/qtl Rs/qtl Last 36443 35450 % Change Prev day -0.22 -0.95

as on March 26, 2013 WoW -0.74 -2.33 MoM -8.30 -4.37 YoY -10.36 -15.83

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 28, 2013 Support 34970-35190 Resistance 35720-36030

Production and Arrivals

The arrivals in the spot market were reported at 42 tonnes while off takes were reported at 40 tonnes on Tuesday. 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. Harvesting of pepper in some regions in Kerala are already complete.

Outlook
Pepper is expected to trade on a mixed note today. Higher arrivals of pepper from Karnataka may put pressure on the prices. However, low stocks coupled with good demand from the upcountry markets may support prices at lower levels. Reports that farmers are holding back stocks may also support prices at lower levels.

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Commodities Daily Report

Thursday| March 28, 2013

Agricultural Commodities
Jeera
After trading on a negative note, Jeera Futures gained towards the end on account of short coverings. Higher arrivals of the new crop have pressurized prices. However, good export demand has cushioned a sharp downside. Arrivals of the new crop are averaging around 26,000 bags/ day and are likely to improve in the coming days. New crop from Rajasthan is expected to enter the markets from April. 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 3.352 lakh ha in 2013 compared with 3.719 lakh ha last year. According to the Rajasthan State Budget 2013-14, it has exempted jeera from VAT. The spot settled 0.05% lower while the Futures settled 0.35% higher on Tuesday. 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 $2,400 tn (FOB Mumbai) 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 Apr '13 Futures Rs/qtl Rs/qtl Last 13343 13018 Prev day -0.05 0.35

as on March 25, 2013 % Change WoW 0.05 -0.44 MoM -0.57 1.03 YoY 6.11 9.41

Source: Reuters

Technical Chart Jeera

NCDEX April contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 45,000 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 0.00 0.43

as on March 26, 2013 % Change

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

Last 6414 6544

WoW 0.82 -0.30

MoM 17.86 5.11

YoY 70.50 55.29

Outlook
Jeera Futures are expected to continue to trade with a downside pressure due to higher arrivals of the new crop. However, export as well as domestic demand may cushion the downside in the prices. 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 traded on a positive note on Tuesday on account of short coverings. Higher supplies of the new crop have pressurized prices. However, good export and domestic demand coupled with output concerns limited downside. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes of turmeric. The Spot settled unchanged while the Futures settled 0.43% higher on Tuesday.

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 11,000 bags and 20,000 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 is expected to trade with a negative bias. Higher supplies of the fresh crop, huge carryover stocks and higher margin on the long side may pressurize prices. However, good overseas as well as domestic demand coupled with crop damage and lower output concerns may support prices.

Source: Telequote

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

Valid for Mar 28, 2013

Support 12790-12930 6400-6480 Resistance 13150-13240 6600-6640

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Commodities Daily Report

Thursday| March 28, 2013

Agricultural Commodities
Kapas
NCDEX Kapas and MCX Cotton traded on a positive note on Tuesday extending previous days gains and settled 0.86% and 1.03% on account of short coverings. Prices had declined sharply last week on reports state-run Cotton Corporation of India (CCI) would offload stocks in the open market to augment supplies. Lower supplies in the domestic markets and rising cotton prices have caused concerns for textile industry, which is demanding government to direct CCI and NAFED to offload the cotton stock to domestic mills. CCI is expected to offload 4 lakh bales in the domestic market and NAFED will sell 3.63 lakh cotton bales from the first week of April 2013. India's imports of cotton this year could reach 1.5 mn bales, missing earlier estimates of more than 2 mn as the govt may to start selling its stockpiles. Cotton supplies since the beginning of the year in October 2012 until February 10, 2013 were down at 183.4 lakh bales, down from 189.27 lakh bales a year earlier.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 941.5 18650

as on March 26, 2013 % Change Prev. day WoW 0.86 -3.44 1.03 -0.96 MoM -5.19 -0.96 YoY #N/A 11.14

NCDEX Kapas Apr Futures MCX Cotton Mar Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 88.53 81.35

as on March 26, 2013 % Change Prev day WoW 0.56 -0.64 0.00 0.00 MoM 10.36 0.00 YoY -5.85 -29.20

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.
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Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

ICE Cotton futures traded on a mixed note with a positive bias and settled 0.56% higher due to expectations of good export demand from China. However, traders adopted a cautious view ahead of the US plantings data to be released on Thursday. Reports of India and China releasing stocks from the state reserve led to a sharp decline last week. China, the worlds largest consumer, is expected to sell about 3 mn tn of cotton this year from state reserves of around 10 mn tn. USDA has initially forecasted US Cotton acreage for 2013-14 season, at smallest in 20 yrs, however, with recent surge in prices, farmers may decide to plant more cotton. The planting intention data is schedule to be released on 28th march 2013.
Source: Telequote

Technical Chart - Cotton

MCX March contract

Outlook
In the current week, we expect Cotton prices to trade with downward bias on expectations supplies may increase in the open market. However, it is crucial to keep a close watch on US planting intentions which may have an impact on prices. A decline in cotton acreage may lead to an upside in the prices and vice a versa.

Source: Telequote

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

valid for Mar 28, 2013 Support 919-930 18440-18570 Resistance 950-960 18840-18970

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