Outlook on Jeera, Turmeric, Black Pepper: Angel Broking.

Angel Broking has come out with its report on Jeera, Turmeric & Black Pepper.

Jeera: Jeera spot prices and Futures settled 0.09% higher w-w on expectation of demand from the overseas buyers while Futures ended 0.17% down owing to long liquidation by the market participants. Demand from the overseas and domestic buyers is expected in the coming weeks.

Production, Arrivals and Exports: Arrivals in the domestic mandi on Saturday stood at 6,000 bags as compared to 4,000 bags on Friday while offtakes stood at 6,000 bags. Production of jeera in Gujarat and Rajasthan in 2011 was around 21 lakh bags and 7-8 lakh bags respectively. (Each bag weighs 55 kgs). (Source: spot market traders). Fresh crop arrivals from Syria and Turkey have commenced however, crop is not of good quality. According to Spices Board of India exports of Jeera from India during April 2011- June 2011 stood at 5,750 tonnes as compared to 10,600 tonnes in 2010-11, decline of 45.8%.

Outlook: NCDEX September Jeera prices are expected to trade higher due to declining arrivals and expectation of demand from the domestic and overseas buyers. In medium to long term (September onwards), Jeera prices will depend on the demand from the overseas and domestic buyers. Prices will also take cues from the carryover stocks of jeera with India. This season carryover stocks are expected to remain at the lower side owing to lower production. This is likely to support prices.

Turmeric: Turmeric Futures extended losses of the previous day settled Rs.5,670/qtl on account of selling by the market participants anticipating better crop production for the crop season 2011-12. Prices at spot markets settled 0.64% down tracking bearishness in the Futures.

Production, Arrivals and Exports: Arrivals in Nizamabad mandi were around 1,000 bags on Friday while Erode market witnessed arrivals of 6000 bags. Turmeric production for the year 2011-12 is projected at 82 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 2010-11. However, area covered under turmeric till 24th August 2011 stood at 0.62 lakh hectares 10.14 percent lower as compared to 0.69 lakh hectares in the same period previous year. According to Spices Board of India exports of Turmeric from India during April 2011- June 2011 stood at 21,775 tonnes as compared to 15,000 tonnes in 2010-11, rise of 45%.

Outlook: Turmeric prices in the intraday may trade sideways to down due to sufficient turmeric stocks with the local stockists. Price trend in the short term (till August) is likely to depend on demand for the spice from domestic and overseas buyers. In the medium to long term (September onwards) turmeric prices will take cues from the turmeric stocks at the domestic market and sowing progress of turmeric in the main growing areas particularly Nizamabad and Erode.

Soybean: NCDEX September Soybean futures ended slightly higher on account of firm soybean futures at CBOT as lower production estimates of soybean this year as compared to last year. According to the Ministry of Agriculture, Area under total kharif oilseed covered at 173 lakh hectare, just below normal area of 174.25 lakh hectares (Normal area=average for 2005-06 to 2009-10) and slightly higher as compared to last year of 166.56 lakh hectares. Area under soybean increased to 103 lakh hectare this year, up more than 10% as compared to 92.85 lakh hectare.

Area under groundnut declined to 41.92 lakh hectare, down 14% as compared to 49.01 lakh hectare last year. Arrivals of soybean was 15,000 bags in Madhya Pradesh (bags=100 quintal). Arrivals in Indore Mandi were around 1500 bags. Arrivals in Maharashtra were 10,000 bags and Rajasthan 8,000 bags. Spot prices in Indore Mandi (auction) were Rs 2260-2320 a quintal. USDA’s weekly export sales report released on August 25, 2011 which shows that the export sales for soybeans came in at 107,500 metric tonnes for the current marketing year and 550,100 for the next marketing year for a total of 657,600 which was below trade expectations.

Cumulative soybean sales stand at 28.9% of the USDA forecast for the season versus a 5 year average of 26.1%. Sales of 499,000 metric tonnes are needed each week to reach the USDA forecast. Meal sales were only 90,300 tonnes also below trade expectations. Net oil sales came in at only 500 metric tonnes. Cumulative soybean oil sales stand at 94.2% of the USDA forecast for 2010/2011 (current) marketing year versus a 5 year average of 81.8%. Sales of 13,000 metric tonnes are needed each week to reach the USDA forecast.

Mustard Seed: NCDEX September RM Seed futures ended higher on account of firm overseas market and higher prices of other oilseeds and edible oils also provided support to the price. Refine Soy Oil Refined Soy oil futures traded higher on account of firm overseas market as lower production estimates of US soybean this year as compared to last year. Improved demand in physical market ahead of festivals also provided support to the prices. Malaysian Palm Oil Exports As per SGS (a cargo surveyor), Malaysia’s palm oil exports during the August 1-25 rose to 5.5 % to 1.37 million tonnes as compared to last month during the same period (July 1-25).

Outlook: Refined Soybean oil are expected to trade slightly higher due to improved demand in domestic market ahead of festivals and lower existing carry over stock of domestic soybean as record high export figures of domestic oil meal in this financial year as compared to last year are also in favour of the bulls.

Black Pepper: Black Pepper futures as well as spot ended 2.40% and 4.47% higher wow on account of lower availability amidst better off takes. Indian pepper prices are quoting around $7,400 per tonne. Vietnam 570 Gl and Indonesia are being offered at $7,200 per tonne and $7,500 per tonne respectively. There are reports that Vietnam has lower stocks of pepper left till fresh crop arrivals which will commence in the month of March -April next year. Currently, Indonesia’s fresh crop arrivals are lower and output this year is expected to be less than 16,000 tonnes (Source: peppertradeboard). Further, prices offered by them in the international market are around $6,800-$6,900/tonne.

Exports from the major countries: According to Spices Board of India exports of pepper from India during April 2011- June 2011 stood at 5,750 tonnes as compared to 4,750 tonnes in 2010-11, rise of 21.1%. According to International Pepper Community (IPC) exports of black pepper from six major exporting nations during January – June 2011 stood at 1.23 lakh tonnes registering a decline of 3 percent compared to 1.26 lakh tonnes in 2010. Exports from India and Malaysia posted an increase while Vietnam, Brazil and Srilanka registered a decline in 2011. Indonesia exported more or less the same as the previous year during the above mentioned period.

Production and Arrivals: Arrivals of pepper in the domestic mandi on Saturday stood at 20 tonnes while offtakes stood at 30 tonnes. Production of pepper in India in 2010-11 is projected to be 48 thousand tonnes (according to the Spices Board) as compared to 50 thousand tonnes last year. However, there are expectations that this estimate would be lowered further on account of the disease attacks and erratic rainfall in the major growing areas particularly Kerala and Karnataka. According to International Pepper Community (IPC) global output of Pepper for 2011 is expected to decline by 6,500 tonnes to 3.10 lakh tonnes. Vietnam production of the spice is expected to be same as that of previous year to 1.10 lakh tonnes. Pepper production in Brazil stood around 27,000 tonnes in 2010-11 as compared to 35,000 tonnes the previous year.

Outlook: Pepper futures in the intraday are expected to trade higher due to improved demand ahead of festivals and lower arrivals at the domestic market. In the medium to long term (September to December), price trend will depend on pepper stocks with Vietnam and India along with price quotes offered by Indonesia and Vietnam in the international market for their pepper origins. Brazil crop estimates will also determine the price trend.

Source : moneycontrol.com