India turmeric drops on weak exports; pepper edges up.

MUMBAI: Turmeric futures in India dropped more than 1 percent on Wednesday, weighed by sluggish overseas sales and mounting stocks with farmers and traders.

Carry-forward stocks have been higher because of a bumper crop last year after farmers significantly expanded area under cultivation.

At 0915 GMT, the July contract on the National Commodity and Derivatives Exchange was 1.73 percent lower at 3,860 rupees per 100 kg.

Lack of procurement by the Tamil Nadu state agencies from the spot market as farmers were reluctant to sell at 4,000 rupees per 100 kg, also weighed on sentiment, two analysts said.

"Domestic supplies are declining and are expected to fall further, but it's not supporting prices as exports are sluggish and procurement from state agencies is poor due to unattractive prices," said Shikha Mittal, analyst at Karvy Comtrade.

However, this year farmers are expected to cut area under turmeric because prices have fallen more than 30 percent since the start of the year.

At Nizamabad, a key market in Andhra Pradesh, spot turmeric edged up 7 rupees to 3,511 rupees per 100 kg.

Turmeric is planted between June and August and takes about nine months to harvest.

India's annual monsoon rains have covered almost half the country, showing signs of a pick-up after falling short in the first 15 days of the season, weather officials said on Monday.

PEPPER

Pepper futures edged up due to meagre domestic supply amid dwindling stocks, but weak exports kept the upside limited.

The most-active July contract on the NCDEX was up 0.21 percent at 40,535 rupees per 100 kg.

"Lower stocks in the exchange warehouse can support the bulls. It is expected to extend gains by end of session," said Faiyaz Hudani, senior analyst at Kotak Commodities.

At Kochi, a key market in Kerala, spot pepper gained 179 rupees to 39,721 rupees.

Industry officials estimate local pepper output in 2012 at about 43,000-45,000 tonnes, as against 49,000 tonnes last year.

However, exports have been poor because Indian-origin pepper is being offered at a premium of around $300-$400 per tonne compared to other suppliers.

JEERA

Jeera, or cumin seed, futures fell on profit-taking triggered by lacklustre export demand, but losses were checked by a decline in local supplies as the arrival season has ended.

The July jeera contract on the NCDEX fell 0.93 percent to 13,525 rupees per 100 kg. It had risen more than 3 percent in the last session.

Fresh export enquiries have been weak as overseas buyers wait for prices to stabilise, but some analysts expect demand to improve in the coming weeks due to lower inventories in other producers such as Syria and Turkey.

"There are no fresh export cues for Indian-origin jeera as of now, but domestic buying is good because supplies are weak," said Mittal from Karvy Comtrade.

Daily arrivals at Unjha have dropped to about 5,000-6,000 bags of 60 kg each from 7,000-9,000 bags since the second week of June.

At Unjha, a major market in the western state of Gujarat, spot jeera gained 135 rupees to 13,770 rupees on thin supplies.

Source : economictimes.indiatimes.com