Commodities Daily Report

Saturday| March 02, 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

Saturday| March 02, 2013

Agricultural Commodities
News in brief
Cotton slips after hitting Rs 38,000 a candy
Cotton prices touched Rs 38,000 a candy of 356 kg on Friday but soon after demand declined. Traders said demand began taking a hit once prices touched Rs 37,700. However, prices ended Rs 200 higher compared with Thursdays price. Demand for cotton still exists in the market but buyers are unwilling to pay higher prices that sellers are demanding. In the morning, Gujarat Sankar-6 cotton quoted higher by Rs 500 at Rs 37,900-38,000 but, thereafter, it declined to Rs 37,500-37,700. Kapas or raw cotton price touched Rs 1,000-1,020 for a maund of 20 kg due to lower arrivals and higher demand. About 35,000 bales cotton arrived in Gujarat and 1.25 lakh bales cotton arrived across the country. Spinners and exporters were active in the markets but they are reluctant to buy at higher rates. Fresh export inquiries were limited. Traders said that cotton may rise further; but a small correction is likely in the near future. (Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on March 1, 2013
WoW MoM YoY

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

18919 5720 54.91 90.68 1572

0.30 0.47 0.98 -1.49 -0.37

-2.06 -2.23 1.15 -2.63 -0.03

-5.43 -5.55 3.12 -7.41 -6.43

6.57 6.21 11.80 -15.31 -8.07

.Source: Reuters

Yellow rust affects wheat crop in North

The yellow rust (stripe rust) disease has hit various wheat growing areas of Haryana, Punjab and Himachal Pradesh. Due to unwanted rainfall in recent past, thousands of acres under wheat crop have been affected by yellow rust (stripe rust) in these States. Among all these wheat growing areas, the worst hit was Yamunanagar district of Haryana. The DWR (Directorate of Wheat Research) team has monitored the rust situation in the affected villages of Sadhaura and Jagadhri blocks of Yamunanagar. According to their report, stripe rust has appeared in severe form in varieties, Super 172, WH 711, HD 2851, Raj 3765 planted in large scale in village Sarawa. Severity of the disease is up to 60%. In other villages of Sadhaura block, stripe rust has been observed in 20-40%. While in Jaroda village (Jagadhri block), 30% of stripe rust has been observed in variety, HD 2967. According to the experts, few parts of Yamuna Belt of Karnal district have also been affected by yellow rust. (Source: Business Line)

Govt will intervene to protect rubber growers from price fluctuation

The Commerce and Industry Minister Anand Sharma has said that the Government will intervene to ensure that domestic rubber producers are not affected by price fluctuation. Rubber producers and MPs from Kerala had petitioned the Government to raise import duty on natural rubber to shield farmers from a sharp fall in prices in the recent months. While not elaborating on the measure that would be taken, the Minister said the Commerce Department had convened a meeting on the issue recently that was also attended by the Rubber Board Chairman and a decision has been taken to take appropriate action. There is a possibility that an increase in import duty on natural rubber may be announced soon as the Commerce and Industry Ministry has reportedly proposed such a move. The increase could be as much as 70 per cent to Rs 34 a kg over the prevailing duty of Rs 20/kg (or 20 per cent of the domestic price, whichever is lower). (Source: Business Line)

No export duty to spur investment in rice bran solvent extraction

Encouraged by the withdrawal of a 10% export duty on de- oiled rice bran oil cake (Dorboc), solvent extraction units in India are likely to see an investment of Rs300 crore in the next couple of years, feel experts. Indias annual paddy production is estimated at 120 mt. With an estimated average recovery of around six%, the rice bran (a brown layer between husk and rice) obtained through processing of this paddy is about 7.2 mt. Of this, however, solvent extraction units have managed to process only five mt, to obtain around 0.9 mt of rice bran oil. The remaining four- odd mt goes to make Dorboc. The withdrawal of export duty would make us competitive in the international market, where Dorboc is competing with wheat husk and other materials used for bird and animal feed, said B V Mehta, executive director, Solvent Extractors Association of India. (Source: Business Standard)

Subsidy overdues may prompt urea price hike

A urea price hike seems inevitable, as the Budget has effectively provided Rs 27,046 crore toward fertiliser subsidy, which is far from adequate. But, whether the Government will bite the urea bullet in an election year is worth a watch. Though the actual budgetary provision is Rs 65,972 crore for 2013-14, the effective subsidy that would be available to fertiliser companies stands at around Rs 27,046 crore. This is because the Government, at present, owes about Rs 39,000 crore to fertiliser makers, as the subsidy for 2012-13 has overshot the budget estimate to such extent. The overrun in subsidy burden was due to a sharp increase in global prices of potash and phosphatic fertilisers last year and impact of a weakened rupee, as the country heavily relies on imports for such nutrients. The delay in subsidy payment has resulted in cash flow problems for many fertiliser makers. The industry believes that an effective lower subsidy for 2013-14 could get exhausted quickly, sometime in June-July, as was seen last year as companies are saddled with huge stocks that would be offloaded during the forthcoming kharif season. (Source: Business Line)

Have sought rejection of recommendations on GM crop trials: Govt

The government today said it has filed an affidavit before the Supreme Court seeking rejection of the recommendations of a Parliamentary Panel and the apex court-appointed expert committee to stop field trials of GM crops. In a written reply to the Rajya Sabha, Minister of State for Agriculture Tariq Anwar said the Parliamentary Standing Committee on Agriculture had recommended stopping of GM trials till regulatory system is strengthened. A Technical Expert Committee constituted by the Supreme Court had suggested 10 years moratorium on field trial of GM crops in its interim-report, he added. (Source: Economic Times)

Base import price for RBD palmolein hiked

The Government has hiked tariff value or base import price on RBD palmolein and crude palmolein by $2 a tonne largely in line with global prices. The base price for refined, bleached and de-odourised (RBD) palmolein has been hiked to $914 a tonne, up from $912. Similarly, the base price for crude palmolein has increased to $911 a tonne from $909. However, the tariff value on crude soyabean oil has decreased to $1,202 from $1,229 a tonne. The Government has recently unfrozen the tariff values of all edible oils, palm oil crude and refined, and soyabean oilcrude and has decided to notify their tariff values fortnightly on the basis of their prevailing international prices. (Source: Business Line)

Biggest Robusta Harvest at Risk as Vietnam Suffers Drought

The coffee harvest in Vietnam, the biggest grower of the robusta variety, may decline in the 2013- 2014 season as a drought in the countrys top producing region may lead to smaller fruits, potentially boosting prices. Water levels in reservoirs, rivers and streams in the Central Highlands are much lower due to less rainfall last year, Nguyen Dai Nguong, the head of Dak Lak Meteorology and Hydrology Department, said yesterday. Dry conditions are expected to continue this month as the probability of offseason rains is much less than in previous years, he said. (Source: Bloomberg)

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Commodities Daily Report

Saturday| March 02, 2013

Agricultural Commodities
Chana
After hitting a fresh contract low of Rs. 3318, Chana Futures recovered from lower levels on account of short coverings. Prices have declined sharply on account of rising supplies of new crop in the domestic markets along with bumper output expectations which have pressurized prices. Arrivals will increase further in the coming days as harvesting will commence in full pace in MP. The spot settled 0.24% lower while the Futures settled 0.93% higher on Friday. 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 3502 3365 Prev day -0.24 0.93

as on March 1, 2013 % change WoW MoM -3.50 -8.04 -2.04 -5.21 YoY -3.70 -6.08

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

Source: Reuters

Technical Chart - Chana

NCDEX April contract

Pulses Sowing 2012-13

According to the final figures from ministry of agriculture dated 22 February 2012, Chana sowing is 3.6% higher at 95.15 lakh ha compared to previous year. Acreage is up in Rajasthan, Maharashtra, MP and AP at 15.7 lakh ha, 12.53 lakh ha, 32.99 lakh ha and 7.33 lakh ha respectively.
nd

Higher returns earned in 2012, coupled with a hike in minimum support prices (MSP), have helped expand overall acreage in 2012-13 season. The Centre has hiked the MSP by 14 per cent to Rs 3,200 a quintal for chana and as part of its strategy to encourage farmers to grow more pulses to reduce import dependence.

Demand supply fundamentals

According to second advance Estimates released on 8 Feb 2013, Total pulses output for 2012-13 season has been pegged at 17.58 mn tn, down 3.3% compared to previous year. The target for 2012-13 pulses crop output was set at 18.24 million tonne during the year. However, drought conditions have hampered kharif pulses output, which has been only partially offset by Rabi pulses output, especially chana. Out of the total pulses output, kharif output is estimated at 23% lower at 5.48 mn tn while rabi pulses output is pegged 8.72% higher at 12.09 mn tn compared with the final estimates of 2011-12. There has been a sharp increase in the chana output estimates on the back of higher acreage and good yield. Chana output is expected to breach its 2010-11 record of 8.2 mn tn and is estimated at 8.57 mn tn for 2012-13. In its first advance estimates chana output was pegged at 7.9 mn tn. Assocham estimates, 21 mn tn of pulses demand in 2012-13 and is likely to reach at 21.42 mn tn in 2013-14 and 21.91 MT in 2014-15. (Source: Agriwatch).
th

Source: Telequote

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

valid for Mar 2, 2013 Resistance 3385-3405

3295-3330

Trade Scenario
India imports Chana mainly from Australia and Canada and higher availability in these countries at comparatively cheaper rates is seen boosting imports of Chana to meet the domestic shortfall. In Australia, total chickpea production in 201213 is estimated to have increased to a record 713000 tones as compared with 485000 tons in 2011-12. In Canada chickpea output is estimated at 1.58 lakh tonnes compared with 86000 tn in 2011-12.

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

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Commodities Daily Report

Saturday| March 02, 2013

Agricultural Commodities
Sugar
Sugar futures declined sharply yesterday hitting a fresh contract low of Rs. 3009 on account of higher supplies coupled with sluggish demand in the domestic markets. Differences between different ministries of the government on the issue of decontrol also pressurized prices. There was no announcement on decontrol of sugar by the Finance Minister in the 2013-14 budget. 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 spot as well as the Futures settled 0.16% and 1.15% lower on Friday. 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 3170

as on March 1, 2013 % Change Prev. day WoW -0.16 -1.14 MoM -2.15 YoY 7.70

Rs/qtl

3009

-1.15

-2.78

-4.39

4.23

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMay'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 513.9 398.00

as on March 1, 2013 % Change Prev day WoW -1.12 -2.56 1.66 -1.81 MoM 3.44 -4.28 YoY -21.31 -28.25

.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.

Source: Telequote

Global Sugar Updates

Liffe white sugar as well as Raw Sugar futures on ICE settled sharply lower by 1.12% and 2.56% respectively on Friday on account of renewed worry about the global economy sank markets already pressured by ample supplies. A global surplus situation has led the prices to a sharp decline. Currently the prices are trading around their 2 year lows. Brazil exported 1.21 mt of raw sugar in February, vs 1.73 mt in January. The ISO last week had forecasted a global sugar surplus of 8.526 mn tn in 2012/13, up from 6.479 mn tn in 2011-12. It forecast that the sugar stocks-to-consumption ratio would rise to 40.56 percent in 2012/13 from 38.21 percent in 2011/12. Sugar traders are the most bullish since October on speculation that the slump in prices to the lowest in 2 1/2 years will spur Brazilian millers to make more biofuel and less of the raw sweetener from cane. Brazil plans to reduce taxes on ethanol to boost production and use of the biofuel. If brazil cuts tax the ethanol parity to sugar may rise and thus the share of cane directed to sugar production in the 2013-14 season may be 44 -45%, down from 49.6 % in the current period.

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

valid for Mar 2, 2013 Resistance 3035-3060

2980-2995

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

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Commodities Daily Report

Saturday| March 02, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean futures traded on a positive note in the early
trades on account off lower domestic supplies but declined in the later half due to profit taking. Weak international markets also added to the downside pressure. Oil meal exports rose by almost 40 per cent to 7.68 lakh tonnes in January this year, industry body Solvent Extractors Association of India said. The export of oil meals, however declined by 18 per cent to 36.79 lakh tonnes in the first 10 months of this fiscal compared to 44.85 lakh tonnes in the year-ago period. The country exported 25.36 lakh tn soybean meal in first 10 months compared to 30.82 lakh tn in the same period last year which showing a decline of 17.72%. According to the second advance estimates, 2012-13 oilseed output is pegged at 29.4 mn tn, down by 1.1%, while soybean output is pegged higher at 12.9 mn tn, up 3.2%.

Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Mar '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3400 3303 683.2 672.9 Prev day 0.47 -0.66 -0.65 -1.18

as on March 1, 2013

WoW -1.22 -1.74 -5.71 -4.59

MoM 1.52 0.46 -10.09 -8.75

YoY 28.93 22.25 -3.68 -5.39

Source: Reuters

as on March 1, 2013 International Prices Soybean- CBOTMar'13 Futures Soybean Oil - CBOTMar'13 Futures Unit USc/ Bushel USc/lbs Last 1465 49.47 Prev day -0.66 1.33 WoW 0.22 -1.75 MoM 0.88 -4.33
Source: Reuters

International Markets
Soybean Futures on CBOT declined by 0.66% due after Informa Economics raised its estimate of Brazil's soybean harvest to 84.5 mn tn from its earlier estimates of 84 mn tn. However, Strong demand for the bean prevented a sharp downside. German oilseeds analyst Oil World on Tuesday cut its forecast of the 2013 soybean harvest in Argentina by 2 mn tn to 50 mn tn from its Jan estimates because of dry weather, but has raised its forecast of Brazil's soybean crop by 0.5 mn tn. Rainfall in Argentina's top soy-producing province revived wilting crops as many entered important growth stages, but others were still in urgent need of rain. Argentina soybean acreage is estimated at 19.35 mn ha. U.S. farmers will harvest record soybean crops in 2013, ending three years of falling production and rebuilding nearly depleted stockpiles.

YoY 11.22 -8.29

Crude Palm Oil

% Change Prev day WoW -1.05 0.80 -5.17 -0.81

as on March 1, 2013

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

Last 2350 454.7

MoM -2.49 3.81

YoY -27.80 -16.89

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil as well as CPO declined by 1.18% and
0.18% respectively due to higher supplies. 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%.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Apr'13 Futures Rs/100 kgs Rs/100 kgs Last 3619 3377 Prev day 0.53 -0.32 WoW -4.77 -1.95

as on March 1, 2013 MoM -7.44 -2.26

Source: Reuters

YoY 6.44 -5.41

Technical Chart Soybean

NCDEX March contract

Rape/mustard Seed: Mustard Futures declined 0.32% on Friday

on account of higher output expectations. Arrivals have commenced in Rajasthan and thus prices may decline further. Mustard seed sowing is now up by 2.2% at 67.23 lakh ha. Agriculture ministry in its third advance estimates, pegged mustard output at 7.36 mn tn, up by 11.5%. MSP of mustard seed is fixed at Rs 3000 per qtl.

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

Source: Telequote

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

valid for Mar 2, 2013 Support 664-668 3250-3275 3350-3365 450-453 Resistance 679-685 3335-3370 3395-3415 457-460

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Commodities Daily Report

Saturday| March 02, 2013

Agricultural Commodities h
Black Pepper
Pepper March Futures declined sharply yesterday on account of increasing arrivals of the new crop from Karnataka. Prices have gained over the last couple of days due to low stocks, thin supplies and delayed harvesting on back of to lack of skilled laborers. Harvesting of the fresh crop is going in and is expected to gain momentum in the coming days. Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 8,000 tonnes. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot settled as well as the Futures settled 1.17% and 2.35% lower on Friday. According to a circular issued by NCDEX on 09/02/2013, launch of June 2013 expiry contract in Pepper which is scheduled on February 11, 2013, has been postponed till further notice. The revised launch date will be announced in due course. Spices Board has announced plans to import high yielding Madagascar variety that was behind the record productivity in Vietnam. It could raise productivity of Indian pepper from 2,000 kg/ha to 7,000 kg/ha. Pepper prices in the international market are being quoted at $7,700/tn. Vietnams Asta is quoted at $6,925-6,975/tn, Indonesia GM-1 is quoted at $6,900/tn and Brazil Asta is quoted at $6,600/tn.

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Mar'13 Futures Rs/qtl Rs/qtl Last 38959 36730 % Change Prev day -1.17 -2.35 WoW -3.91 -2.52

as on March 1, 2013 MoM -3.22 -5.20 YoY 2.74 -3.42

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 Mar 2, 2013 Support 36130-36430 Resistance 37270-37780

Production and Arrivals

The arrivals in the spot market were reported at 67 tonnes while off takes were reported at 70 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 estimates, pepper output in Vietnam is estimated to be 1.05 lakh tonne in 2012 as compared to 1.1 lakh tonne in 2011. Brazil is also expected to produce 22,000 tn this year. Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Pepper trade board) Pepper production in 2012-13 is expected around 60,000-63,000 tonnes. Currently, pepper is in the fruit formation stage in Kerala.

Outlook
Pepper is expected to trade lower extending yesterdays losses as improvement in arrivals may pressurize prices further. However, low stocks coupled with good demand from the upcountry markets may support prices. Reports that farmers are holding back stocks may also support prices at lower levels.

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Commodities Daily Report

Saturday| March 02, 2013

Agricultural Commodities
Jeera
Jeera Spot as well as Futures decline sharply and hit a fresh contract lower of Rs. 12762.50 yesterday as increasing arrivals of the new crop has pressurized prices. The arrivals of new crop are averaging around 15,000 bags/ day and are expected to improve in the coming days. Higher sowing as well as conducive weather in Gujarat, the main jeera growing region has increased output expectations. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.244 lakh ha in 2013 compared with 3.64 lakh ha last year. In Rajasthan, sowing is expected to increase by 10-15%. The spot as well as the Futures settled 0.92% and 1.56% lower on Friday. According to markets sources the exports target has already been achieved due to a supply crunch in the global markets. Supply concerns from Syria and Turkey still exists. Expectations are that export orders may still be diverted to India from the international markets due to lack of supplies from Syria on back of the ongoing civil war. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,975-$3,000 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 5-6 lakh bags.

Market Highlights
Unit Jeera Spot- NCDEX (Unjha) Jeera- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Last 13200 12788 Prev day -0.92 -1.56

as on March 1, 2013 % Change WoW -4.14 -4.78 MoM -5.71 -5.73 YoY -7.89 -8.05

Source: Reuters

Technical Chart Jeera

NCDEX March contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 19,000 tn on Thursday. 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 -0.25 -1.49

as on March 1, 2013 % Change

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

Last 5407 6082

WoW -0.47 -1.68

MoM -2.03 -4.10

YoY 21.48 27.67

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.

Turmeric
Turmeric Futures declined yesterday due to higher supplies of the new crop coupled with higher carryover stocks. However, lower output expectations supported prices. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes. The Spot as well as the Futures settled 0.25% and 1.49% lower on Friday.

Technical Chart Turmeric

NCDEX April contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 4,000 bags and 12,000 bags respectively on Thursday. 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 today. Higher carryover stocks and weak overseas demand are expected to pressurize prices from higher levels. However, reports of some damage to the crop coupled with lower output concerns and demand from stockists may support prices at lower levels. Fresh buying by stockists at lower levels may also support prices.

Source: Telequote

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

Valid for Mar 2, 2013

Support 12620-12690 5980-6030 Resistance 12920-13060 6170-6260

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Commodities Daily Report

Saturday| March 02, 2013

Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton opened on a positive note yesterday after the the Finance Minister announced various incentives and policies in the Union Budget to support the ailing textile industry. Prices are on an uptrend as government last week decided to continue with current cotton exports policy. Traders expect exports to cross governments estimates of 8 mn bales. However, prices declined sharply from higher levels towards the end of the day and hit the lower circuit breaker due to profit booking at higher levels. NCDEX Kapas as well as MCX Cotton settled 3.13% and 1.46% lower on Friday. 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 975 18260

as on March 1, 2013 % Change Prev. day WoW -3.13 0.10 -0.22 2.53 MoM 6.79 2.53 YoY #N/A 5.18

NCDEX Kapas Apr Futures MCX Cotton Mar Futures

Source: Reuters

International Prices
ICE Cotton Unit USc/Lbs Last 83.68 81.35

as on March 1, 2013 % Change Prev day WoW 0.14 2.81 0.00 0.00 MoM 0.87 0.00 YoY -4.32 -29.20

Domestic Production and Consumption

According to Cotton Advisory Boards (CAB) estimates (23 Jan 2013) for 2012-13 season that commenced in October, domestic cotton production is pegged 330 lakh bales, down from the previous years estimates of 353 lakh bales. However, higher exports and domestic consumption can be met through revised higher opening stocks of 40 lakh bales and higher imports. After witnessing record exports in 2011-12 season, Indian exports could witness significant fall this season on the back of lower availability along with unattractive domestic cotton prices. CAB estimates cotton exports at 80 lakh bales this season, compared with 128.8 lakh bales last year.
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Cot look A Index

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

Cotton traded higher extending previous days gains and settled 0.14% st higher as mills buying lifted prices. Prices reported its 1 weekly gains after declining for the last 3 weeks after touching a 9 month high due to lower world demand. However, mills buying and expectations of good demand from China have supported prices at lower levels. U.S. growers will harvest the smallest cotton crop in four years and notch the smallest exports in 12 years as world demand for the fiber drops, especially in China.
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Source: Telequote

Technical Chart - Cotton

MCX March contract

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

Outlook
Cotton prices are expected to open lower extending yesterdays losses. However, prices may recover from lower levels as various policy announcements to support the textile industry may support prices. Also the prices may take cues from firmness in the international markets which registered a largest one day gain in the last six months on Wednesday. Expectations that China may release higher import quota which might boost imports also supported an upside in the cotton prices. Also, expected lower US cotton acreage and output in 2013-14 may also support prices at lower levels.

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

valid for Mar 2, 2013 Support 945-960 17870-18090 Resistance 990-1010 18640-1960

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