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Commodities Daily Report

Thursday| March 21, 2013

Agricultural Commodities

Content
News & Market Highlights Chana Sugar Oilseed Complex Spices Complex Kapas/Cotton

Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narvekar@angelbroking.com (022) 2921 2000 Extn. 6130 Anuj Choudhary - Research Analyst anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132

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Commodities Daily Report
Thursday| March 21, 2013

Agricultural Commodities
News in brief
FCRA Bill may be tabled in House today
Consumer Affairs Minister K V Thomas is expected to table the muchawaited amendments to the Forward Contracts (Regulation) Act, 1952 (FCRA) in the Lok Sabha tomorrow. The amendment Bill was cleared by the Union Cabinet in October last year. The amendments will seek to give more powers to the commodities market regulator, Forward Market Commission (FMC), and open the door for introduction of new products like options and indices trading in the commodities futures market. Simultaneously, amendments to the Securities and Exchange Board of India (Sebi) Act, 1992 to bring it in line with the FCRA is also expected to be tabled in Parliament tomorrow. The FCRA Bill says the Securities Appellate Tribunal (SAT), set up under the Sebi Act will be the appellate authority for the commodity derivatives market as well and hence to give effect to this provision, the Sebi Act is also being amended. “The item has been listed in the list of business for tomorrow,” a senior official said. Another official source said the government seems determined to get the FCRA Bill cleared. After the Bill is passed, a member will be appointed on SAT to hear commodity derivative cases. The person to be appointed to the position has already been identified. (Source: Business Standard)

Market Highlights (% change)
Last Prev. day

as on March 20, 2013
WoW MoM YoY

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

18884 5694 54.33 92.96 1608

-0.65 -0.90 -0.31 0.87 -0.24

-2.47 -2.68 -0.07 0.48 1.21

-3.16 -3.46 0.12 -3.83 0.24

9.06 7.95 7.51 -11.98 -2.38

.Source: Reuters

Sell chilli on harvest, TN farmers told
The price of the red chilli may not move up in the near future. Farmers can consider offloading the produce upon harvest instead of storing it in anticipation of better rates, say Domestic and Export Market Intelligence Cell experts. Advising farmers to sell the produce on harvest, the DEMIC functioning at the Tamil Nadu Agricultural University said ‘the export order for the red chilli is limited. The possibility of any increase in the price would depend on fresh export orders.’ Trade sources said the area under red chilli had fallen drastically in Tamil Nadu, Karnataka and Andhra Pradesh in the current year. The production is also expected to take a 40 per cent hit sources said adding the chillies produced in Tamil Nadu would hit markets in Kovilpatti, Sathur, Sankarankoil, Rajapalayam, Kamuthi, Muthukulathur and Virudhunagar by March end. In 2011-12, Tamil Nadu produced 30,298 tn from 58,603 hectares. (Source: Business Line)

Food Bill: NAC member questions delay, lists out constraints
The revised food security bill may have got the government nod and is likely to be brought in Parliament this week, but a NAC member has criticised the two- year delay in its passing, saying this crucial time could have been used to address policy issues that may pose hurdles in its implementation. "The bill was first tabled in Parliament in 2011. I am deeply disappointed that its fate hanged in balance for past two years. There was no need to wait for two years and this period could have been utilised to address a number of major policy constraints that will continue to pose hurdles even when the law comes in force," N C Saxena said. The National Advisory Council (NAC), an advisory body that gives suggestions on country's policy issues, played an important role in drafting of the legislation. (Source: Financial Express)

Southern millers want export plans dropped
The Southern India Mills Association has urged the Government to stop the proposed export of cotton by the Cotton Corporation of India and the National Agricultural Cooperative Marketing Fedration of India and ensure stability of cotton prices. Expressing concern about the proposed export of 10 lakh bales of cotton by these Government agencies, SIMA Chief S. Dinakaran said ‘this decision is unfortunate. If the proposed export is not stopped, the commodity could become scarce at the end of the cotton season,’ he said. Urging the Government to put a halt to the proposed export of the white fibre, he said cotton export registrations have already crossed the 80 lakh bales mark. Export of 10 lakh bales out of the 22 lakh bales procured by the Government agencies would only lead to yet another industry turmoil. (Source: Business Line)

Food Security Bill could spark grain crisis: Gulati
With the revised National Food Security Bill set to be introduced in Parliament, the Commission for Agricultural Costs and Prices (CACP) has warned the government's move to distribute highly subsidised foodgrains to two-thirds of the population as a legal entitlement that would create a serious crisis of ‘food management’in the country. CACP chairman Ashok Gulati told FE that in the absence of huge investments in irrigation, foodgrain storage facilities and improvement in rail infrastructure for transportation of grains, the implementation of the proposed food security legislation would not be sustainable in the long run. The Union Cabinet on Tuesday gave its nod to the revised Food Security Bill, which guarantees providing 5 kg foodgrain per month at a subsidised rate to 67% of the country's population. Under the proposed food law, goodgrains would be provided to around 82 crore people in both urban and rural areas. Foodgrains would include rice, wheat and millet at R3, R2 and R1 a kg, respectively. The annual foodgrain requirement for implementing the National Food Security Bill is estimated at 61 million tonne. (Source: Financial Express)

Cotton Corp to release stocksin domestic market soon
Government-owned Cotton Corporation of India will release in the domestic market the cotton stock it holds, Commerce and Industry Minister Anand Sharma has said. The Minister, however, did not specify the amount of cotton that will be released or a timeframe for the release. “That will happen,” Sharma said on Wednesday answering questions from reporters on whether the Corporation would off-load its stocks in the open market. The Corporation had built the stocks by buying cotton from the open market as part of the Government market intervention programme following a dropped in prices below the minimum support level. For the current season to September, the Centre has fixed Rs 3,900 a quintal as the support price for long staple cotton and Rs 3,600 for medium staple cotton. (Source: Business Line)

Malaysian Palm Oil Product Exports Rose 13.7 Percent - SGS
Malaysian palm oil products exports for March 1-20 rose 13.7 cent to 922,987 tons from 811,722 tons shipped during the corresponding period last month - cargo surveyor Societe Generale de Surveillance. India imported 67,642 tons of palm oil products during first twenty days of March, fell 37.6 percent m-o-m basis. Seasonally lower palm oil production phase and firm exports may help to ease palm oil inventories further. However, stocks levels of Palm oil in the South East Asian countries are still higher compared to the seasonal stock levels, which may restrict excessive gains in the coming weeks. (Source: Financial Express)

Hailstorm in Madhya Pradesh damages crops worth Rs 893.93 cr
Around 2,44,615 hectares of land in 3,190 villages of 31 districts has been affected with the recent hailstorm in Madhya Pradesh, according to a survey conducted by the state revenue department. The hailstorm occurred in various parts of the state between March 14 and 17. It caused damage to crops worth about Rs 893.93 crore and the affected districts have so far demanded compensation worth Rs 136.81 crore from the revenue department. Crop loss is to the tune of Rs 301 crore in Vidisha, Rs 213.61 crore in Rajgarh, Rs 87.17 crore in Seoni, Rs 68.16 crore in Shajapur and Rs 46.01 crore in Guna district. (Source: Business Line)

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Commodities Daily Report
Thursday| March 21, 2013

Agricultural Commodities
Chana
Chana futures gained yesterday due to good demand from the stockists. However, sharp gains were capped and the spot also declined on account of arrival pressure of the new crop coupled with higher output expectations. There are concerns over the yield from Madhya Pradesh due to erratic weather conditions. The Spot settled 0.53% lower while the April Futures settled 1.03% higher on Wednesday. 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 3450 3434 Prev day -0.53 1.03

as on March 20, 2013 % change WoW MoM 0.00 -5.22 0.18 -0.20 YoY -3.92 -4.27

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 5 February 2012, Chana sowing is 5.65% higher at 95.17 lakh ha compared to previous year. Acreage is up in Rajasthan, Maharashtra, MP and AP at 15.7 lakh ha, 12.53 lakh ha, 32.99 lakh ha and 7.33 lakh ha respectively.
th

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

Source: Telequote

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

valid for Mar 21, 2013 Resistance 3450-3470

3370-3400

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 2012–13 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 trade higher due to demand from stockists. Yield concerns from MP may also support prices. However, increasing arrivals of new crop from MP coupled with higher imports may exert downside pressure on the domestic prices. Also, prices may not sustain below Rs 3200 as farmers will not liquidate their produce below these levels.

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Commodities Daily Report
Thursday| March 21, 2013

Agricultural Commodities
Sugar
Sugar futures declined sharply yesterday as the CCEA deferred the decision on decontrol till the next panel meeting. Sluggish demand from the bulk manufacturers coupled with higher supplies also added to the downside pressure. Agriculture Minister Sharad Pawar said that the sugar output in 2013-14 may fall to around 24 mn tn against current year’s output of 24.5 mn tn. There are reports that some mills in Maharashtra have stopped crushing due to non availability of cane. The spot as well as the April Futures settled 0.3% and 1.2% lower on Wednesday.
India, the world’ biggest sugar consumer, could consider easing curbs on the tightly controlled industry this week. Decontrolling the sugar sector would, involve abolition of regulated release mechanism, removal of levy sugar obligation from industry, freer export-import policy, removal of sugar from compulsory packing in jute bags only and a transparent policy linking cane price with sugar price. 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. 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 3105

as on March 20, 2013 % Change Prev. day WoW -0.30 -1.03 MoM -3.91 YoY 8.27

Rs/qtl

2955

-1.20

-2.18

-4.52

11.05

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMay'13 Futures Sugar No 11-ICE May '13 Futures $/tonne $/tonne Last 530.6 407.78

as on March 20, 2013 % Change Prev day WoW 0.15 0.22 -0.62 -2.39 MoM 7.06 0.71 YoY -19.04 -27.56

.Source: Reuters

Technical Chart - Sugar

NCDEX April 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 gained marginally by 0.15% and 0.22% on account of short coverings. A global surplus situation coupled with ample supplies pressurized prices. Prices have declined as ISO forecasted higher global sugar surplus. Brazil exported 1.21 mt of raw sugar in February, vs 1.73 mt in January. The ISO forecasted a global sugar surplus of 8.526 mn tn while FO. Litch forecasted a sugar surplus of 10 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. According to FO Litch, Brazil's center-south sugar production is expected to reach 36.2 million tonnes in 2013/14, up from 34.1 million tonnes in the previous season, 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 Apr NCDEX Futures Unit Rs./qtl Support

valid for Mar 21, 2013 Resistance 3010-3025

2965-2980

Outlook
Sugar is expected to decline further today due to higher supplies in the domestic markets. However, prices may recover as demand will now reemerge to meet the summer season requirement. Markets are also awaiting a further announcement from the government on decontrol may also guide the prices. Further, crushing will now start declining amid lower cane availability this season.

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Commodities Daily Report
Thursday| March 21, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean April Futures gained marginally due to lower
supplies in the domestic markets. The spot settled as well as the April futures settled 0.44% and 0.15% higher on Wednesday. Exports of Soybean meal during February, 2013 was 5,77,589 tones as compared to 3,70,524 tonnes in February, 2012 showing an increase by 55.88% over the last year. On a financial year basis, the export during April 2012 to February 2013 is 31,13,651 tonnes as compared to 34,52,791 tonnes in the same period of previous year showing a decrease of 9.82%. 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 3617 3624 686 686 Prev day 0.44 -0.19 -0.07 -0.03

as on March 20, 2013

WoW 0.81 2.84 1.29 0.85

MoM 6.13 6.62 -6.57 -6.58

YoY 27.45 27.86 -6.00 -6.46

Source: Reuters

International Markets
Soybean Futures on CBOT recovered from lower levels after declining for six days and settled 0.92% higher on account of short coverings. Advancement of the South American crop has led to a decline in the prices over the last few sessions. There are reports that China may cancel upto 2 million tonnes of Brazil Soybean to due shipment delay, however, market participants expect the actual cancellations to be lesser. This has led to a slowdown in the producers’ sales from Brazil. Farmers in Argentina are holding back their crop anticipating higher prices. The USDA monthly crop report has kept the Brazil output unchanged at 83.5 mn tn while, it reduced Argentina’s crop forecast from 53 mn tn to 51.5 mn tn. German oilseeds analyst Oil World 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. 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. 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.
International Prices Soybean- CBOTMay'13 Futures Soybean Oil - CBOTMay'13 Futures Unit USc/ Bushel USc/lbs Last 1420 49.84 Prev day 0.92 0.73

as on March 20, 2013 WoW -3.75 0.97 MoM -3.43 -5.12
Source: Reuters

YoY 4.78 -8.35

Crude Palm Oil

as on March 20, 2013 % Change Prev day WoW 0.50 0.07 1.85 -0.57

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

Last 2426 451.9

MoM -1.94 -1.20

YoY -27.95 -20.58

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 3413 3421 Prev day 0.23 0.44 WoW -2.84 -1.44

as on March 20, 2013 MoM -13.61 -1.53
Source: Reuters

YoY -8.31 -11.65

Refined Soy Oil: Ref soy oil as well as CPO gained 0.37% and 0.07%
due to higher international prices. Lead speakers in the Palm Oil Conference have forecasted lower prices due to rising supplies. Higher global production estimates of palm oil by oil world have pressurized prices at higher levels. Global palm oil output is estimated at 55.3 mn tn in 2012-13, up by 3.4 mn tn. India's vegetable oil imports declined 17 percent from a month ago in February due to higher taxes. 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%.

Technical Chart –Soybean

NCDEX April contract

Rape/mustard Seed: Mustard Futures gained 0.44% on yesterday
on account of short coverings. Arrivals pressure of the new crop coupled with higher output expectations has pressurized prices. 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.

Source: Telequote

Outlook
Soybean may trade on a mixed note. Low supplies may support prices. Mustard seed is expected to continue to trade lower on account of higher output expectations. Soy oil and CPO may continue to decline further on account of forecast of higher supplies. However prices may find support on expectations that output may fall due to seasonally lower yield.

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

valid for Mar 21, 2013 Support 665-668 3450-3470 3385-3400 448-450 Resistance 673-676 3510-3540 3430-3450 453-456

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Commodities Daily Report
Thursday| March 21, 2013

Agricultural Commodities h
Black Pepper
Pepper Futures recovered from lower levels after declining for three days on account of short coverings. Prices have declined due to long liquidation. Also, Karnataka crop is trading at lower levels due inferior quality. Low stocks in the warehouses coupled with thin supplies and delayed harvesting on back of to lack of skilled laborers have supported the prices at lower levels. Harvesting of the fresh crop is currently going on. Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 8,000 tonnes. There have been reports of some exports of Karnataka pepper from Mangalore port. Exports demand for Indian pepper in the international markets is weak due to price parity. The Spot settled 0.43% lower while the April Futures settled 0.44% higher on Wednesday. According to a circular issued by NCDEX on 09/02/2013, launch of June 2013 expiry contract in Pepper which is scheduled on February 11, 2013, has been postponed till further notice. The revised launch date will be announced in due course. Spices Board has announced plans to import high yielding Madagascar variety that was behind the record productivity in Vietnam. It could raise productivity of Indian pepper from 2,000 kg/ha to 7,000 kg/ha. Pepper prices in the international market are being quoted at $6,9050/tn (C&F, New York). Vietnam’s 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 36557 36000 % Change Prev day -0.43 -0.81

as on March 20, 2013 WoW -1.63 -3.03 MoM -10.93 -13.04 YoY -10.24 -10.15

Source: Reuters

Technical Chart – Black Pepper

NCDEX April contract

Exports and Imports
India’s pepper exports in 2012 have been reported at just 12,000 tonnes while imports reported at 15,000 tonnes making India a net importer. (Source: Agriwatch) According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of pepper in 2012 stood at 116,962 mt, Vietnam shipped 12000 mt of pepper in January 2013. Pepper imports by U.S. the largest consumer of the spice declined 9% in 2012 period to 62,458 tn as compared to 68,489 tn in 2011. Exports from Indonesia posted significant decrease of 42% as compared to previous year. Exports stood at 36,500 tonnes as compared to 62,599 tonnes in the last year. Brazil exported 25,900 tn pepper during Jan-Nov 2012, around 20% lower compared with 32,650 tn in the same period last year. Exports from Malaysia 8,300 tn pepper during Jan-Oct 2012, lower by 30% last year while exports in October stood at 1,077 mt in.
Source: Telequote

Technical Outlook
Contract Black Pepper NCDEX Apr Futures Unit Rs/qtl

valid for Mar 21, 2013 Support 34720-35070 Resistance 35690-35950

Production and Arrivals
The arrivals in the spot market were reported at 8 tonnes while off takes were reported at 10 tonnes on Wednesday. As per IPC, Global pepper production in 2012 is projected at 3.27 lk tn, up compared with 3.18 lk tn in 2011. Production for 2013 is projected at 316832 tn. Indonesian pepper output is expected to rise by 24% and in Vietnam by 10%. According to estimates, pepper output in Vietnam is estimated to be 1.05 lakh tonne in 2012 as compared to 1.1 lakh tonne in 2011. Brazil is also expected to produce 22,000 tn this year. Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Pepper trade board) Pepper production in 2012-13 is expected around 60,000-63,000 tonnes. Currently, pepper is in the fruit formation stage in Kerala.

Outlook
Pepper is expected to trade on a mixed note today. Prices may recover from lower levels as low stocks coupled with good demand from the upcountry markets may support prices at lower levels. Reports that farmers are holding back stocks may also support prices at lower levels. However, improvement in arrivals may pressurize prices at higher levels.

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Commodities Daily Report
Thursday| March 21, 2013

Agricultural Commodities
Jeera
Jeera Futures recovered from lower levels on account of short coverings. Prices have declined sharply due to arrivals pressure of the new crop. The arrivals of new crop are averaging around 25,000 bags/ day and are expected to improve in the coming days. New crop from Rajasthan is expected to enter the markets from April. Higher sowing as well as conducive weather in Gujarat, the main jeera growing region has increased output expectations. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.352 lakh ha in 2013 compared with 3.719 lakh ha last year. According to the Rajasthan State Budget 2013-14, it has exempted jeera from VAT. The spot as well as the April Futures settled 0.06% and 0.54% higher on Wednesday. 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 $2,375 tn (c&f Europe) 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 13344 12950 Prev day 0.06 -0.96

as on March 20, 2013 % Change WoW -1.83 -3.23 MoM -4.08 -3.57 YoY 3.44 8.85

Source: Reuters

Technical Chart – Jeera

NCDEX April contract

Production, Arrivals and Exports
Arrivals in Unjha were reported at 36,000 tn on Wednesday. Production of Jeera in 2012-13 is expected around 38-40 lakh bags (55 kgs each), same as last year. According to Spices Board of India, exports of Jeera in April 2012 stood at 2,500 tonnes as compared to 2,369 tonnes in April 2011, an increase of 6%.
Source: Telequote

Market Highlights
Prev day 0.63 0.82

as on March 20, 2013 % Change

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

Last 6402 6618

WoW -0.68 -4.89

MoM 16.98 4.42

YoY 62.37 58.48

Outlook
Jeera Futures is expected to decline today. Higher arrivals may pressurize prices further. However, export as well as domestic demand may cushion the downside. In the medium term, prices are likely to stay firm as Syria and Turkey have stopped shipments.

Turmeric
Turmeric Futures recovered from lower levels on account of short coverings. Higher supplies of the new crop have pressurized prices at higher levels. Export demand coupled with output concerns has supported prices. Traders have received fresh orders from Bihar, Maharashtra, Delhi, Kolkata and some other places. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes. NCDEX imposed special margin of 10% on the long side from 14/03/2013. The Spot as well as the Futures settled 0.63% and 0.82% higher on Wednesday.

Technical Chart – Turmeric

NCDEX April contract

Production, Arrivals and Exports
Arrivals in Erode and Nizamabad mandi stood at 5,000 bags and 12,000 bags respectively on Wednesday. Expectations are that production may be lower by 40-50%. There are reports of some crop damage in Erode region. Turmeric production in 2012-13 is expected around 50 lakh bags. Production in Nizamabad is expected around 12 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. It is estimated that next year’s carryover stocks would be around 10 lakh bags. According to Spices Board of India, exports of Turmeric in April 2012 increased by 1% at 7,300 tn as compared to 7,230 tn in April 2011. Outlook Turmeric is expected to trade on a mixed note today. Fresh export as well as domestic demand coupled with crop damage and lower output concerns may support prices. Demand from stockists may also support prices. However, higher carryover stocks coupled with higher margin on the long side may pressurize prices.

Source: Telequote

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

Valid for Mar 21, 2013
Support 12840-12940 6470-6540 Resistance 13120-13220 6670-6740

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Commodities Daily Report
Thursday| March 21, 2013

Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton gained by 0.51% and 0.8% respectively on Wednesday. Low demand from domestic millers have pressurized prices over the last few days. There are reports that Cotton Corporation Of India would offload stocks in the open market. There is some buying interest seen from China which has raised expectations of export demand. The government has decided to continue with the current cotton exports policy. Traders expect exports to cross government’s estimates of 8 mn bales. Finance Minister announced various incentives and policies in the Union Budget to support the ailing textile industry. 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 980 18980

as on March 20, 2013 % Change Prev. day WoW 0.51 1.03 0.80 1.77 MoM 5.83 1.77 YoY #N/A 14.54

NCDEX Kapas Apr Futures MCX Cotton Mar Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 89.1 81.35

as on March 20, 2013 % Change Prev day WoW -2.23 0.55 0.00 0.00 MoM 8.42 0.00 YoY 0.89 -29.20

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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Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates
Cotton declined sharply by 2.23% on Wednesday on reports that that India and China will release cotton from government stocks. Prices had shot up last week due to positive exports sales data. Prices are trading near year high levels. USDA, in its monthly crop report cut global cotton stock estimates on higher demand which cushioned a sharp downside in the prices. Buying by mills has also lifted the prices. Expectations of good demand from China supported prices at lower levels. U.S. growers will harvest the smallest cotton crop in four years and notch the smallest exports in 12 years as world demand for the fiber drops, especially in China. At its annual Outlook Forum, USDA projected a crop of 14 million bales from planted acreage of 10 million acres. Plantings would be the smallest in four years and down 19 percent from last year. The crop, projected to be down 18 percent from 2012, would be the smallest since 2009. China is planning to issue more cotton import quotas to exportdependent textile mills that are struggling to protect margins as domestic prices soar due to a state stockpiling plan. However, according to USDA, the world's largest cotton grower and user, will import the smallest amount of cotton, 8 million bales, in five years in 2013/14 as it copes with huge domestic reserves.
Source: Telequote

Source: Telequote

Technical Chart - Cotton

MCX March contract

Outlook
Cotton prices may trade on a mixed note today. Prices may decline if CCI offloads stocks in the open market. Low demand from mills may also pressurize prices. However, expectations of good exports may support prices. Also, the prices may take cues from the international markets. 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 210, 2013 Support 960-970 18760-18870 Resistance 985-1000 19050-19120

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