Commodities Daily Report

Friday| February 1, 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
Friday| February 1, 2013

Agricultural Commodities
News in brief
Govt hikes sugarcane FRP by 23.5% to Rs 210/qtl for 2013-14
The government today increased the sugarcane price that mills are required to pay to farmers by 23.5 per cent to Rs 210 per quintal for the year starting October 2013. The Fair and Remunerative Price (FRP), the minimum price that sugarcane farmers are legally guaranteed, was at Rs 170 per quintal in the 2012-13 marketing year (October-September). "The Cabinet Committee on Economic Affairs (CCEA) has approved sugarcane FRP for 2013-14 at Rs 210 per quintal. This is an increase of Rs 40 per quintal from the last year," Food Minister K V Thomas told reporters after the meeting. The CCEA has approved the proposal of the Food Ministry, which was in line with the recommendation of the Commission for Agricultural Costs and Prices (CACP) that suggested Rs 40 increase in the FRP at Rs 210 per quintal for 2013-14. Thomas said the sugar production forecast for the ongoing 2012-13 marketing year has been revised upward to 24 mn tns from 23.5 mn tns. "Earlier, we had estimated sugar output for 2012-13 at 23.5 mn tns. Now, this has been revised to 24 mn tns, whereas the industry body ISMA estimated 24.2 mn tns," the minister said. This year's production is expected to slightly lower than 26 mn tns achieved in 2011-12 but sufficient to meet the domestic demand of 22 mn tns, he added. (Source: Financial Express)

Market Highlights (% change)
Last Prev. day

as on Jan 31, 2013
WoW MoM YoY

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

19895 6035 53.28 97.49 1661

-0.55 -0.35 0.06 -0.46 -1.15

-0.14 0.26 -0.81 1.61 -0.53

2.41 2.20 -3.13 6.18 -0.85

15.71 16.07 7.59 -1.01 -4.44

.Source: Reuters

India, Bangladesh to sign pact on cotton shipments
India and Bangladesh may shortly seal an agreement on cotton that will ensure supply of a fixed minimum quantity from New Delhi to its neighbour every year irrespective of any export ban. “Bangladesh wants India to commit to 15 lakh bales (170 kg each) of cotton every year, but the final amount is still being negotiated,” Bangladesh Commerce Minister Ghulam Muhammed Quader told Business Line. The deal, which will be at a business-to-business level, is being worked out by the Commerce and Textile Ministries of the two countries. For India, the Cotton Corporation of India will sign the final agreement, an Indian Commerce Department official said. The price, which will be flexible, is likely to be marked slightly higher than the existing global prices as a premium for the guaranteed supply, the Indian official added. The premium amount is also being finalised. “We hope that within the next few months the deal will be through. It will protect textile manufacturers in our country from uncertainties that India’s frequent ban on cotton exports creates,” said a Bangladeshi Government official, who did not wish to be named. (Source: Business Line)

Barley price falls on adequate supply, subdued demand
Barley prices fell by Rs 30 per quintal in thin trade on the wholesale grains market today on reduced offtake by consuming industries, against adequate supplies. However, other grains moved in a tight range in limited deals and settled around previous levels. Marketmen said reduced offtake by consuming industries against adequate supplies mainly led the fall in barley prices. (Source: Financial Express)

Spike in EU alerts over ‘tainted’ India farm products
The European Union issued 47 notifications in November 2012 asking companies to check for contamination in food products imported from India. That’s an alarming jump from the monthly average of four-five alerts for Indian agri products. According to a source, the trade arm of the EU, the European Commission (EC), has also warned India that the high level of rejection due to presence of “toxic substances” may lead to a complete ban on products such as groundnuts. Of India’s merchandise exports to the EU, about 7% are agricultural products. During the first eight months of 2012, India’s total exports to the EU were worth $18 billion. It was in 2010 that the EC introduced increased checks on food products from India. Following the November alerts, the EU told India that groundnuts, curry leaves and okra (lady’s finger) coming from India would have to undergo 100 Spike in EU alerts over ‘tainted’ India farm products per cent pre-export testing, and would need a health certificate guaranteeing absence of harmful pesticides. The EC also told the Indian Embassy that it was planning to undertake “documentary control at the border inspection posts while checking 20% of the groundnuts imported”. A source in India’s Agricultural and Processed Food Products Export Development Authority said they had taken note of the EU alerts.
(Source: Financial Express)

Farm costs panel pitches for stable agri-trade policy
The CACP has pitched for a stable, long-term agri-trade policy that will regulate exports and imports taking recourse to tariff measures, not quantitative restrictions. In a discussion paper on “Farm Trade: Tapping the Hidden Potential,” the CACP Chairman Ashok Gulati said a stable and liberal trade policy with moderate duties of 5-10 per cent would go a long way in promoting agricultural growth. (Source: Business Line)

Russia mulls scrapping grain import duty
Russia's agriculture and economy ministries voiced support on Thursday for a proposal to remove a 5 percent import duty on grain, which could help cool soaring domestic grain prices following a severe drought. Ministry officials spoke a day before a government meeting on the issue. The drought has slashed Russia's harvest and transformed it from a large wheat exporter to an importer. Deputy Economy Minister Andrei Klepach said that removing the duty was possible, because it would help cool domestic price rises. Russia's agriculture minister also said the move was possible. "It won't have a significant impact on the market. In my opinion it may be lifted," Minister Nikolai Fyodorov told reporters. Russia is now importing grain mainly from neighboring Kazakhstan, which does not have to pay the duty. (Source: Reuters)

Heavy snow, rains for north-west in February
Foggy and cold weather in north-west India would undergo a sharp change to being stormy and raining from next week. This is on account of expected arrival of a deep and heavily endowed (moisture-laden) western disturbance into the region. Currently located around the Mediterranean, the system is expected to start moving to the east over the next few days. The low-pressure system is forecast to weaken as it traverses the dry West Asia and limp into Afghanistan/Pakistan by Friday next. But from here, it would start drawing in moisture heavily from the northeast Arabian Sea and throw up a low-pressure area. The system may weaken suddenly as it crosses into north-west India. But it would already have started influencing local weather. (Source: Business Line)

Indonesian province to halt palm, mining expansion
Indonesia's province of East Kalimantan has imposed a one-year ban on forest destruction, a governor on the island of Borneo said on Thursday, citing the need to curb mining and palm oil expansion and cut back on land disputes. The move is a potential roadblock for investors in Indonesia, who already face a thicket of overlapping regulations at the provincial and federal levels. But Indonesia, home to the world's thirdlargest expanse of tropical forests, is under international pressure to curb deforestation and destruction of its carbon-rich peatlands. "We have applied this moratorium policy for new permits on forestry, mining and plantation since several weeks ago and it will last for a year," East Kalimantan governor Awang Faroek Ishak told Reuters, without giving a specific start date. (Source: Reuters)

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Commodities Daily Report
Friday| February 1, 2013

Agricultural Commodities
Chana
After witnessing downside pressure during the last three consecutive sessions, Chana futures settled marginally higher on short coverings and settled 0.28% higher. Prices have declined sharply in the past three sessions on commencement of arrivals in Maharashtra. Spot prices declined 1.54% on Thursday. Prices had gained in the previous week on reports that extreme cold in North may hamper chana crop yield. However, with commencement of harvesting, prices have again come under downside pressure.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3808 3550 Prev day -1.54 0.28

as on Jan 31, 2013 % change WoW MoM -2.99 -3.30 -1.25 -8.46 YoY 18.41 11.46

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

Source: Reuters

Sowing progress
Total pulses acreage as on 18th Jan 2013 stood at 1142.33 lakh ha, down by 0.6% yoy. As on 11th Jan 2013, pulses acreage was up by 0.4%. Chana sowing is almost complete and acreage so far is at 91.9 lakh ha, up by 3.4% as on 18th Jan. Chana acreage is marginally higher by 3% this year in Rajasthan at 14.80 lakh ha, In Maharashtra, Chana acreage is up at 10.92 lakh ha as on 11th Jan 2013 vs normal area of 10.6 lakh ha and 2012 area of 7.04 lakh ha. While in AP it is up at 7.14 lakh ha as on 11th Jan 2013, up by 26%. (Source: State farm dept)

Technical Chart - Chana

NCDEX April contract

Demand supply fundamentals
With some delay arrivals have finally commenced in Maharashtra. New chana crop commenced at Jalgaon, traded at Rs.3500/Qtl ,the new crop contain 13% moisture. Although Farm ministry has targeted 7.9 mn tn Chana output for 2012-13 season, higher compared to 7.58 mn tn in 2011-12, the final output would depend on the weather conditions in the major growing regions. According to the first advance estimates of 2012-13 season, kharif pulses output is estimated lower by 14.6% at 5.26 million tonnes compared with 6.16 mn tn last year. The Commission for Agriculture Costs and Prices (CACP) has suggested 10 per cent import duty on pulses to encourage domestic production. in the first six months of the new fiscal that is from April to September this year, imports were an estimated 12 lakh tonnes. 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).
Source: Telequote

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

valid for Feb 1, 2013 Resistance 3590-3630

3460-3510

Trade Scenario
In Australia, total chickpea production in 2012–13 is estimated to have increased to a record of around 746000 tones as compared with 485000 tons in 2011-12. India imports Chana mainly from Australia and Canada and higher availability in these countries at comparatively cheaper rates is seen boosting imports of Chana to meet the domestic shortfall.

Outlook
Chana Futures remain weak as arrivals pressure will gradually increase in the coming weeks. However, weather will play a crucial role in determining Chana crop yield in Rajasthan, the second largest chana producing state.

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Commodities Daily Report
Friday| February 1, 2013

Agricultural Commodities
Sugar
Sugar futures continued with its downward trend for the seventh consecutive session on account of higher supplies in the domestic markets. Prices touched an intraday low of Rs 3097 per qtl and again recovered to settle at Rs 3141 after the announcement of cane support price by the central government. India has fixed FRP (Fair and Remunerative Price),the price sugar mills must pay to cane growers at 210 rupees per 100 kg in the 2013/14 year, compared to current year’s 170 per qtl. Though the federal government revises the cane floor price every year, some state governments invariably raise the rate to woo farmers, a large political constituency. Higher floor price increases the cost of production as the raw material cost constitute the major part of cost of production of sugar. This should actually increase the prices of sugar. But the supplies are huge in the global and domestic markets which is restricting the upside in the sugar prices. Raw sugar futures on ICE as well as Liffe white sugar traded on a positive note extending previous day’s gains on Thursday supported by a decision by the Brazilian government to raise wholesale prices for gasoline and diesel and settled 0.52% and 0.37% higher respectively. A supply glut situation on the back of a sugar surplus for the third consecutive year has led to a sharp downside in the prices. Currently the prices are trading around 2½ year lows.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Feb'13 Futures Rs/qtl Last 3239

as on Jan 31, 2013 % Change Prev. day WoW -0.33 -0.76 MoM -0.44 YoY 11.14

Rs/qtl

3147

-1.32

-2.02

-3.11

9.31

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 499.4 417.33

as on Jan 31, 2013 % Change Prev day WoW 0.52 0.37 2.48 1.57 MoM -4.64 -3.74 YoY -20.70 -20.02

.Source: Reuters

Technical Chart - Sugar

NCDEX Feb contract

Domestic Production and Exports
Mills in the country have produced 7.96 mln tn sugar in the first three months of the season, up nearly 2.5% a year ago. Sugar mills are expected to produce between 23.5 million tonnes and 24 million tonnes in 2012/13. 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.

Source: Telequote

Global Sugar Updates
In the international markets, ICE Raw sugar fell to their lowest level since August 2010 to 18.46 cents in the last week expecting third consecutive year of global surplus in 2012-13. A third consecutive global sugar surplus will trim prices as supply is forecast to exceed demand by more than 8 million tonnes in the crop year to September 2013. Markets would need weather scares or bullish ethanol policy changes in Brazil to encourage new longs. Otherwise, prices will remain depressed. Brazil's main center-south cane crop will produce between 580 million and 590 million tonnes of sugar cane in 2013/14. Brazil will likely favor ethanol production over sugar from the 2013/14 cane crop.

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

valid for Feb 1, 2013 Resistance 3180-3200

3095-3120

Outlook
Sugar futures may remain sideways as hike in cane price and thereby increase in sugar production cost may force government to take some measures to increase sugar prices. This would negate the effect of huge supplies in the domestic markets. Fundamentals remain weak for the sugar markets with supplies exceeding the domestic consumption. Also exports remain unviable amid weak international markets.

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Commodities Daily Report
Friday| February 1, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean futures gained sharply during the early part of
the session taking cues from the firmness in the international markets. However, prices declined towards the end on profit taking and settled marginally higher by 0.37%. Arrivals in the domestic markets declined to 1.5 lakh bags, while demand is comparatively lower amid crushing disparity. Soy meal exports fell by 34% in December to 5.10 lakh tn, according to SOPA. The country had exported 7,78,382 tn in December 2011. During the first three months of the current oil year (Oct-Sep), exports declined by 27% to 10.78 lakh tn.

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Feb '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Feb '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3349 3288 759.8 737.4

as on Jan 31, 2013 % Change Prev day 0.90 0.37 0.50 0.25 WoW 1.45 0.50 0.56 1.67 MoM 0.96 2.05 7.36 5.28 YoY 35.81 34.10 10.48 7.93

International Markets
Soybean futures on the CBOT settled 0.67% lower on Thursday on some rains in Argentina. Concerns about rains in Argentina have led the prices to rise to a six week high earlier this week. Dry weather is starting to threaten soybean yields in parts of Argentina's main crop belt. Oil World forecasts Argentina’s 2012-13 harvest at 52.0 mn tn, down from 53 mn tn in December 2012, however, it is still higher compared with 39 mn tn produced in 2011-12 season. As of Wednesday, the report said 99.4 percent of 2012/13 soy had been planted, with only some northern areas of the Pampas grain belt left to plant. Soy seedings advanced by 2 percentage points over the week, it said. The U.S. Department of Agriculture (USDA) forecasts Argentina's 2012/13 soy crop at 54 million tonnes. Refined Soy Oil: Ref soy oil as well as CPO extended the gains of the previous session, but witnessed profit booking towards the end after the Reuters Poll forecasted second year of decline in crude palm oil prices. Malaysian palm oil product exports during January fell 7 percent to 1,458,475 tonnes from 1,568,510 tonnes in December, cargo surveyor Intertek Testing Services said on Thursday. India's palm oil imports rose 27.4% on month at 783,091 tn in December, boosted mainly by poor domestic supply of alternatives and attractive overseas prices due to record stocks in key supplier Malaysia. To reduce imports and protect domestic industries, govt lifted duty on crude palm oil from 0 % to 2.5 % and also stated that the base import price on crude palm oil which is currently $447 per ton may be reviewed fortnightly.

Source: Reuters

as on Jan 31, 2013 International Prices Soybean- CBOTMar'13 Futures Soybean Oil - CBOTMar'13 Futures Unit USc/ Bushel USc/lbs Last 1469 52.86 Prev day -0.69 0.49 WoW 2.32 1.44 MoM 3.51 7.53
Source: Reuters

YoY 20.67 3.26

Crude Palm Oil

as on Jan 31, 2013 % Change Prev day WoW 2.74 0.18 5.46 -0.70

Unit
CPO-Bursa Malaysia – Feb '13 Contract CPO-MCX- Jan '13 Futures

Last 2512 438

MoM 6.89 -0.05

YoY -17.10 -14.82

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Apr'13 Futures Rs/100 kgs Rs/100 kgs Last 4050 3455 Prev day -0.37 0.17

as on Jan 31, 2013 WoW -4.71 -1.12 MoM -4.71 -18.24
Source: Reuters

YoY 20.81 4.82

Technical Chart –Soybean

NCDEX Feb contract

Rape/mustard Seed: Mustard seed Futures settled 0.17% higher
on Thursday on short coverings. Extreme cold in north India supported prices last week. Rabi oilseeds sowing are now up by 2.23% at 8.54 mn ha as of Jan. 18. Arrivals are expected to commence in February and thus no major upside in the prices is seen if weather condition improve in the coming days. Rapeseed area stood at 6.7 mn ha as of Jan. 18, up by 2.8% from a year ago.

Outlook
Soybean complex is expected to trade on a positive note today due to dwindling supplies in the domestic markets. However, improvement in weather in Argentina may cap sharp upside. Mustard seed prices may trade lower on account of higher sowing of oilseeds. However, Prices reports of ground frost in Rajasthan which may hamper the mustard crop yield may limit the downside. CPO is expected to trade on a positive note today tracking bullish BMD prices.
Source: Telequote

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

valid for Feb 1, 2013 Support 729-733 3220-3250 3390-3420 443-446.50 Resistance 741-745 3320-3350 3480-3510 453-458

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Commodities Daily Report
Friday| February 1, 2013

Agricultural Commodities
Black Pepper
Pepper Futures opened higher extending previous day’s gains, but corrected from higher levels towards the end on account of profit booking. Pepper is trading on a bullish note on back of low stocks and thin supplies. There is a delay in harvesting due to lack of skilled labourers. Good winter demand also supported the prices. Prices have also increased due to arrivals of good quality pepper from Kerala. Earlier, prices had corrected as Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 8,000 tonnes. Harvesting of the fresh crop has commenced and is expected to gain momentum in the coming days. However, winter demand coupled with low stocks in the domestic markets has supported prices at lower levels. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot settled 0.57% higher while the Futures settled 0.33% lower on Thursday. Spices Board has announced plans to import high yielding Madagascar variety that was behind the record productivity in Vietnam. It could raise productivity of Indian pepper from 2,000 kg/ha to 7,000 kg/ha. Pepper prices in the international market are being quoted at $8,400/tn(C&F Europe). Vietnam’s 550 GL is quoted at $6,500/tn, Malaysia and Indonesia Austa variety are quoted at $7,000/tn and Brazil black pepper is quoted at $6,600/tn.

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Feb'13 Futures Rs/qtl Rs/qtl Last 40256 38745 % Change Prev day 0.57 -0.33

as on Jan 31, 2013 WoW 2.78 2.51 MoM 6.25 13.37 YoY 29.87 31.45

Source: Reuters

Technical Chart – Black Pepper

NCDEX Feb contract

Exports and Imports
According to Spices Board of India, exports of pepper in April 2012 fell by 47% and stood at 1,200 tonnes as compared to 2,266 tonnes in April 2011. India imported 1,848 tonnes of pepper till March 2012 and has become the third country to import such large quantity after UAE and Singapore. (Source: Agriwatch) According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of pepper during Jan-Oct 2012 stood at 102,340 mt, lower by 12% as compared to 1,15,780 mt in the same period last year. Total exports in 2012 are forecasted at around 1,10,000 tonnes. Pepper imports by U.S. the largest consumer of the spice declined 26% during January-September 2012 period to 41,923 tn as compared to 52,489 tn in the same period previous year. 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 Feb Futures Unit Rs/qtl

valid for Feb 1, 2013 Support 38100-38400 Resistance 39100-39600

Production and Arrivals
The arrivals in the spot market were reported at 15 tonnes while off takes were reported at 15 tonnes on Thursday. 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 previous estimates, pepper output in Vietnam is estimated to be 1 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 on a positive note today on back of low stocks coupled with thin arrivals. Winter buying demand may also support prices. However, higher output expectations may cap sharp upside. FSSAI’s sealing of huge quantity of pepper has led to a squeeze in the supplies.

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Commodities Daily Report
Friday| February 1, 2013

Agricultural Commodities
Jeera
Jeera Futures opened higher on account of short coverings but corrected towards the end. Prices have corrected sharply over the last 5-6 weeks tracking higher sowing figures. Higher sowing as well as conducive weather in Gujarat, the main jeera growing region have pressurized prices. Sowing is complete. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.244 lakh ha till Jan, 2013 compared with 3.64 lakh ha last year. In Rajasthan, sowing is expected to increase by 10-15%. The spot settled marginally higher by 0.03% while the Futures settled 0.17% lower on Thursday. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Supply concerns from Syria and Turkey still exists. Expectations are that export orders may still be diverted to India from the international markets due to lack of supplies from Syria on back of the ongoing civil war. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,925-2,950 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 5-6 lakh bags.

Market Highlights
Unit Jeera Spot- NCDEX (Unjha) Jeera- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Last 14000 13565 Prev day 0.03 -0.17

as on Jan 31, 2013 % Change WoW -1.13 -0.29 MoM -4.79 -8.22 YoY -8.88 -8.00

Source: Reuters

Technical Chart – Jeera

NCDEX March contract

Production, Arrivals and Exports
Arrivals in Unjha were reported at 3,300 tn on Thursday. Production of Jeera in 2011-12 is expected around 40 lakh bags as against 29 lakh bags in 2010-11 (55 kgs each). 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 0.69 1.31

as on Jan 31, 2013 % Change

Outlook
Jeera may recover from lower levels as demand may emerge at lower levels. Demand from domestic traders and millers at lower levels may also support prices. Export demand at lower levels may also support prices. However, higher sowing figures coupled with conducive weather in Gujarat may pressurize prices. In the medium term, prices are likely to stay firm as Syria and Turkey have stopped shipments.
Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Apr '13 Futures

Unit Rs/qtl Rs/qtl

Last 5519 6342

WoW 1.27 1.18

MoM -2.83 -5.68

YoY 17.24 37.09

Turmeric
Turmeric Futures traded on a bullish note yesterday on back of lower arrivals as well as emerging demand at lower levels. Lower output expectations have also supported the prices. However, spot did not gain sharply on account of sluggish export demand. Huge carryover stocks have pressurized prices over the last few days. There are reports of some crop damage in Erode region. Expectations are that production may be lower by 40-50%. Production is expected around 55 lakh bags. It is estimated that next year’s carryover stocks would be around 10 lakh bags. There are reports that Turmeric Farmers’ Association of India have decided to fix their own MSP of Rs.10000/qtl. The Spot as well as the Futures settled 0.69% and 1.31% higher on Thursday.

Technical Chart – Turmeric

NCDEX April contract

Source: Telequote

Production, Arrivals and Exports
Arrivals in Erode and Nizamabad mandi stood at 2,500 bags and 3,000 bags respectively on Thursday. Turmeric production in 2012-13 is expected around 55 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. 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 open higher extending yesterday’s gains as well as lower output concerns. Demand from stockists at lower levels may support prices. However, higher carryover stocks and weak overseas demand may cap sharp upside
.

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

Valid for Feb 1, 2013
Support 13280-13420 6200-6280 Resistance 13650-13800 6420-6500

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Commodities Daily Report
Friday| February 1, 2013

Agricultural Commodities
Kapas
NCDEX Kapas & MCX Cotton traded on a negative note and settled 0.54% and 0.66% lower respectively. The Cotton Advisory Board, which met in Mumbai on Wednesday, has estimated cotton production this season (Oct 2012 to Sep 2013) will be 330 lakh bales against the previous estimates in October at 334 lakh bales. Also, exports and domestic consumption has been revised upward to 253 and 80 lakh bales respectively from 250 and 70 lakh bales estimated earlier. As on January 9 this year, nearly 38 lakh bales were registered for exports. Cotton Association of India (CAI) expects output to be around 353 lakh bales in 2012-13. ICE Cotton traded sideways with a negative bias and settled marginally lower by 0.01% on Thursday on reports of some cancellation of export orders. Prices have traded on a bullish note on hopes of demand from China led to a sharp increase over the week. Concerns about the quality of cotton to be released by China also supported the prices.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 913 16500

as on Jan 31, 2013 % Change Prev. day WoW -0.54 0.50 -0.66 0.79 MoM -8.10 0.79 YoY #N/A -5.28

NCDEX Kapas Apr Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 82.95 81.35

as on Jan 31, 2013 % Change Prev day WoW -0.01 0.07 0.00 0.00 MoM 10.39 0.00 YoY -11.95 -29.20

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Domestic Production and Consumption
According to Cotton Advisory Board’s (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 year’s 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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Global Cotton Updates
China, the world's biggest buyer of cotton, began selling a tiny fraction of its massive stockpile of the fibre on Monday, in a move to ease domestic supply shortages. Beijing has been building a strategic stockpile of cotton since 2011, paying above global prices to support its farmers, but the policy has hurt China's textile mills, which have been struggling with tight supplies, and high prices, at home. Many in the industry were expecting China to reward mills that buy state reserves with new import quotas enabling them to buy cheaper overseas supplies. But no such deal was announced. Brazil’s 2012-13 cotton production forecast at 6.3 million bales, down 27 percent from 2011/12 production now estimated at 8.6 million bales. (USDA attaché report)

Source: Telequote

Technical Chart - Cotton

MCX Feb contract

Outlook
Cotton prices may trade sideways with a positive bias today. Higher output expectations by Cotton Association of India have turned the sentiments negative for the cotton prices. However, downside may be limited as farmers may not sell their stocks at lower prices. Reports that the Government may purchase cotton from farmers to avoid distress sales may also support prices. Also, anticipated export demand from the neighboring countries may support prices.

Source: Telequote

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

valid for Feb 1, 2013 Support 895-905 16200-16500 Resistance 930-945 17000-17150

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