Commodities Daily Report

Monday| March 04, 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

Monday| March 04, 2013

Agricultural Commodities
News in brief
Govt considers crop switch in punjab to save soil, water
The government plans to revive cultivation of crops that make Punjabs iconic makki ki roti and sarson ka saag maize and mustard along with horticulture and fodder to breathe life into the stressed soil and the rapidly depleting water table in the green-revolution state. Prime Minister Manmohan Singh is pushing hard for crop diversification in Punjab and has appointed an interministerial panel on crop diversification led by agriculture minister Sharad Pawar to help farmers look beyond paddy that guzzles water, fertiliser and power. Farm experts say eastern India, which has plenty of water and the region chosen for the next wave of the green revolution, is a better location for such crops. The government has already allocated Rs. 500 crore to start the programme of crop diversification. The panel will also review infrastructure required to market, support and procure alternative crops. It includes ministers of finance, food and commerce and the deputy chairman of the Planning Commission. Growing alternative crops such as maize, mustard and cotton is expected to reduce water consumption and help revive the water table in Punjab, which is sinking by 33 cm every year. (Source: Economic Times)

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

Pakistan refrains from buying Coonoor tea for third week

For the third consecutive week, Pakistan has refrained from purchasing at the auctions of Coonoor Tea Trade Association. We do not have encouraging orders from our Pakistan importers yet. Pakistan traders hold sufficient stocks from previous purchases, an auctioneer told Business Line. However, international market reports show that this week, Pakistan had bought at Mombasa auction for Kenya and Malawi teas and Jakarta auction for Indonesian teas. This is regarded as to cover up the short supplies from India. Internal buyers were, however, fairly active because of low supplies in North India where some Kolkata auctions for this month have been listed for dropping. Upcountry buyers picked up brighter-liquoring teas. (Source: Business Line)

Crash in global prices may not worry growers

Price volatility in international markets may not spread shockwaves in Indias plantation sector anymore. The UPA government is working on a modified price stabilisation fund (MPSF) to protect the plantation sector that includes tea, coffee, rubber, cardamom and tobacco. The government feels that the fund is needed to protect growers from the cyclical nature of international prices in plantation crops. Additional commerce and industry secretary JS Deepak has asked commodity boards to discuss the key features of MPSF that will be in effect for five years from April 1 this year. Confirming the development, G Boriah, director for tea development, Tea Board, told ET: The government tried to introduce the fund for the plantation sector in 2003 with a corpus of . 500 crore. But it remained a non-starter as growers did not find it attractive. The new scheme is more acceptable and looks lucrative for the growers. (Source: Economic Times)

Higher chana crop may help curb import of pulses

Import of pulses may drop by about a tenth to around 3 million tonnes (mt) next fiscal on a larger chana (gram) crop this year. The current chana crop is higher by about 15% over last year. This may lead to lower imports at around 3 mt in 2013-14, said Pravin Dongre, President, India Pulses and Grains Association. He estimates the current year imports at around 3.3 mt, about 10% higher than the previous year. India, the largest producer, consumer and importer of pulses mainly sources from countries such as Canada, Australia, Myanmar and the US. (Source: Business
Line)

West starts to warm up as North stays cool

Western parts of peninsula and North-West India have started warming up even as northern parts of plains remained cool. US agency forecast says Central and adjoining western peninsula may witness sustained heating from next week. This would bring Nagpur and adjoining west Maharashtra and south Madhya Pradesh under direct battering from the sun. The IMD expects no significant change in minimum temperatures over North-West and central India during next two days. They would increase by 2-3 deg Celsius thereafter. This would be followed by a gradual rise in maximum temperature, too. Heating trend would be crucial for standing rabi crops in North-West during the month of March. Shoot-up of maximum temperatures beyond 30 deg Celsius before midMarch is not seen ideal. Meanwhile, rainfall trend during the first two months of the New Year have returned an all-India surplus of 26%. 29 out of 35 meteorological subdivisions posted excess or normal rainfall while two had deficient rain and five, scanty. (Source: Economic Times)

Don't cut food security subsidy, says Montek Singh

Food security subsidy should not be reduced even if the fiscal situation is not good, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said. He, however, added that this is his personal view and not the government policy. "I would say food security should be the first charge on subsidy budget. And if it turns out that basically there is a fiscal problem and we can't afford subsidy, we should cut the other subsidy, not the food security subsidy. That will be my view," Ahluwalia said. "In my view, I am not expressing government policy, but in my view, it is highly distortionary policy," he added. He said fertiliser subsidy should be cut to half as it damages soil nutrition. "We are subsidising chemical fertiliser, not subsidising organic fertiliser. Chemical fertiliser has damaged the nutrition of the soil. Within chemical fertiliser, we are over subsidising urea. If you ask me, we should cut the fertiliser subsidy to half of what it is," he said. (Source: Financial Express)

China likely to set up single regulator for food & drugs

China is likely to set up a single watchdog for food safety and pharmaceuticals, streamlining a complex regulatory system that has seen a series of scandals over food contamination and fake medicines, the South China Morning Post said on Monday. The ministerial-level body is due to be approved at the annual session of the National People's Congress, which begins on Tuesday, and will replace a system comprising up to 13 government agencies, the newspaper said, likening the new body to the U.S.F.D.A. Academics and food safety experts complain that the multiple agencies create blind spots and overlaps that contribute to a lack of consumer confidence in mainland China's food and drug industry, despite some well-publicised nationwide crackdowns on problems such as tainted milk and counterfeit drugs. (Source: Reuters)

GM crop lobbies irked by Ministrys inaction

They have opposite views on genetically modified (GM) crops but are united on one issue the inaction/silence of the Ministry for Environment and Forests (MoEF) on various issues. For instance, the proGM lobby, led by multinational and domestic seed-makers, wants the Ministry to reconstitute the Genetic Engineering Appraisal Committee (GEAC) so that the trial process can move on. Technically, there is no regulator for GM products now; the GEAC met last in April 2012. Some 50 applications relating to new crop biotech products are pending assessment and approval by the regulator. (Source: Business Line)

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Commodities Daily Report

Monday| March 04, 2013

Agricultural Commodities
Chana
Chana April futures hit a fresh contract low of Rs 3318 last week and settled 3.21% lower w-o-w. Higher supplies in the domestic markets amidst ongoing harvesting coupled along with bumper output expectations have pressurized chana prices in the last week. Sharp downside was however, cushioned on the back of demand from the stockiest at lower price levels. In the union budget 2013-14, although no direct move was considered for Pulses, still The Finance Minister expressed concern about the supplydemand mismatch in pulses. He said that the aggregate demand is a concern. Stating that food inflation is worrying, he said the government would take all steps to augment the supply side.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3517 3342 Prev day 0.44 -0.68

as on March 2, 2013 % change WoW MoM -2.92 -6.61 -3.21 -4.32 YoY -2.30 -9.31

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 4, 2013 Resistance 3365-3385

3310-3325

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

Monday| March 04, 2013

Agricultural Commodities
Sugar
Sugar futures declined last week owing to rising supplies in the physical markets and delay in lifting curbs on the controlled sector by the government. March futures hit a fresh contract low of Rs. 2994 last week on account of higher supplies coupled with sluggish demand in the domestic markets. There was no announcement on decontrol of sugar by the Finance Minister in the 2013-14 budget. Prices also declined as ISO forecasted higher global sugar surplus. The spot as well as the Futures settled 1.33% and 2.66% lower wo-w.
The government has decided not to increase import duty on sugar though industry bodies and manufacturers had demanded a hike in the duty to 60% from the current 10% to curb shipment of the sweetener. Indias Agriculture Minister Sharad Pawar said that they are favoring Food Ministrys proposal to increase the production tax on Sugar from the current Rs. 0.71/kg by Rs. 1.5/kg if mills were freed from an obligation to sell the sweetener at lower prices for public distribution. India's sugar production in the 2013/14 season is set to fall below consumption for the first time in four years as a water shortage trims acreage in three key states.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Mar'13 Futures Rs/qtl Last 3166

as on March 2, 2013 % Change Prev. day WoW -0.12 -1.33 MoM -2.35 YoY 8.05

Rs/qtl

3004

-0.17

-2.66

-3.28

5.74

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.

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.
Source: Telequote

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

valid for Mar 4, 2013 Resistance 3015-3030

2985-2995

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

Monday| March 04, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean futures traded on a mixed note last week. Lower
domestic supplies supported the prices while weak international markets pressuriesed prices. The spot as well as the futures settled 0.56% and 0.44% w-o-w. 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 3397 3312 684 677.4 Prev day -0.09 0.27 0.12 0.67

as on March 2, 2013

WoW -0.56 -0.44 -5.05 -3.08

MoM 1.62 0.18 -9.83 -9.41

YoY 27.18 23.79 -3.75 -4.61

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 0.33 -5.17 -0.22

as on March 2, 2013

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

Last 2350 456.2

MoM -2.49 0.53

YoY -27.80 -16.51

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil as well as recovered from lower levels
on account of short coverings and settled 0.67% and 1.33% higher. 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 3637 3371 Prev day 0.50 -0.18 WoW -3.99 -2.15

as on March 2, 2013 MoM -7.16 -3.13

Source: Reuters

YoY 5.09 -6.44

Technical Chart Soybean

NCDEX March contract

Rape/mustard Seed: Mustard Futures declined 2.15% w-o-w 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 positive bias tracking positive international markets. Also, lower supplies in the domestic markets may support the prices. Mustard seed may remain weak on expectations arrivals to improve soon along with increase in output estimates. CPO may also decline as higher production estimates may pressurize prices. However prices may find support on expectations that output may fall due to seasonally lower yield.

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 4, 2013 Support 670-673 3265-3290 3350-3360 451-453 Resistance 681-685 3335-3355 3385-3400 459-462

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Commodities Daily Report

Monday| March 04, 2013

Agricultural Commodities h
Black Pepper
Pepper March Futures declined sharply last week 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 4.84% and 3.36% lower w-o-w. 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 38565 36565 % Change Prev day -1.01 -0.45 WoW -4.84 -3.36

as on March 2, 2013 MoM -5.21 -5.80 YoY 2.84 -1.60

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, 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 Mar Futures Unit Rs/qtl

valid for Mar 4, 2013 Support 36140-36350 Resistance 36830-37080

Production and Arrivals

The arrivals in the spot market were reported at 22 tonnes while off takes were reported at 25 tonnes on Saturday. 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 last weeks 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

Monday| March 04, 2013

Agricultural Commodities
Jeera
Jeera Spot as well as Futures decline sharply last week and hit a fresh contract lower of Rs. 12700 as increasing arrivals of the new crop has pressurized prices. However, prices recovered towards the end on account of short coverings. 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 3.93% and 1.73% lower w-o-w. 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 13138 12903 Prev day -0.47 0.90

as on March 2, 2013 % Change WoW -3.93 -1.73 MoM -5.87 -6.81 YoY -7.22 -6.79

Source: Reuters

Technical Chart Jeera

NCDEX March contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 22,000 tn on Saturday. 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 -0.85

as on March 2, 2013 % Change

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

Last 5407 6030

WoW -0.47 -2.01

MoM -1.07 -1.66

YoY 23.42 28.46

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 last week due to higher supplies of the new crop coupled with higher carryover stocks. However, lower output expectations supported prices in the spot. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes. The Spot as well as the Futures settled 0.47% and 2.01% lower w-o-w.

Technical Chart Turmeric

NCDEX April contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 5,500 bags and 10,000 bags respectively on Friday. 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.

f
Source: Telequote

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

Valid for Mar 4, 2013

Support 12570-12740 5960-5990 Resistance 13030-13150 6080-6120

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Commodities Daily Report

Monday| March 04, 2013

Agricultural Commodities
Kapas
NCDEX Kapas declined last week by 2.74% on account of profit taking at higher levels. However, MCX Cotton settled higher by 0.22% last week as government decided to continue with current cotton exports policy. Traders expect exports to cross governments estimates of 8 mn bales. Finance Minister announced various incentives and policies in the Union Budget to support the ailing textile industry. Prices are on an uptrend as government last week 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. 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 975.5 18350

as on March 2, 2013 % Change Prev. day WoW 0.05 -2.74 0.49 1.89 MoM 7.55 1.89 YoY #N/A 5.95

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 last weeks 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 4, 2013 Support 955-965 18160-18250 Resistance 985-995 18430-18510

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