Indian spices down; pepper on subdued demand Close.

MUMBAI: Indian pepper futures fell on Thursday as high domestic prices put off foreign buyers, while other spices such as turmeric and jeera dropped on bumper harvest expectations and better arrivals.

At 3:40 p.m., the most-active pepper for April delivery on the National Commodity and Derivatives Exchange (NCDEX) was down 0.78 percent at 40,500 rupees per 100 kg.

"Export demand is negligible because India is offering at a very high premium to its competitors in the international market," said Chowda Reddy, senior analyst at JRG Wealth Management.

Prices could fall to 37,000 rupees in the short term, traders said.

In the Kochi spot market in Kerala, pepper dropped 876 rupees to 39,330 rupees per 100 kg.

Arrivals from Karnataka are gradually improving, traders said, indicating a change in perception after farmers sat on stocks since the start of January expecting prices to rally further.

Industry officials estimate 43,000-45,000 tonnes of local pepper output in 2012, compared with 49,000 tonnes last year.

TURMERIC

Expectations for a bumper crop and sluggish exports pushed the April turmeric contract down 0.42 percent at 4,234 rupees per 100 kg.

"Supplies are very high in the local market due to hopes of a bumper crop after farmers expanded area under cultivation," Reddy said.

In Nizamabad, the trading hub in the southern state of Andhra Pradesh, supplies rose to around 20,000 bags of 70 kg each from about 15,000 bags in the second week of March, traders said.

Spot turmeric fell 33.5 rupees to 3,799.5 rupees per 100 kg in Nizamabad.

Output in Andhra Pradesh, the country top producer of the spice, is likely to rise 36 percent on year to 83,000 tonnes in 2012 due to an expansion in acreage.

JEERA

Jeera, or cumin seed, futures slipped on rising arrivals from the new crop.

"Supplies are likely to remain high until April," said Jay Kumar Jain, a trader from Unjha, a key market in the western state of Gujarat.

Average daily arrivals in Unjha are around 28,000-32,000 bags of 60 kg each, traders said.

The most-traded jeera for April delivery on NCDEX was down 0.27 percent at 11,912.5 rupees per 100 kg.

India is the world's top producer and exporter of jeera, which is cultivated from October to December and harvested from February.

Exports are expected to jump 29 percent in 2011/12, and climb a further 19 percent in the coming financial year that begins in April, according trade and industry forecast.

Source : economictimes.indiatimes.com