Indian Agri Market Snapshot
Market during the week showed high volatility on prices front and seen some higher demand on physical front due to long holidays or festive season. Week ended 25th March was short due to long holidays. Overall trend during the week remain firm as physical market seen some demand on the domestic as well as export front.
Export demand seen on some unlisted commodities on back of upcoming Ramadan in June, wherein some activity from stockiest has seen from abroad. The upcoming month April and May would see strong movements or could be said, as exports demand would rise.
Till March 25th according to experts, Nearly 72% of the country has received excess rainfall in a phenomenon of unseasonal rains, which led to crop losses. Entire North, West and Central India has witnessed unseasonal rainfall.
Cumin Seed or Jeera
Historically, prices of Jeera has seen volatility during the same time on back of strong arrivals in Mandis, stockiest demands, exports demands and etc. This year price rise seen on back of major reason of Unseasonal rainfall and supply of quality produce is low. According to traders estimate prices will rise 10% in coming 15 – 20 days on back of export demand revival soon.
March unseasonal rainfall fear of crop damages has supported the price rise as been estimated that could affect standing cumin crop. While we believe the prices of cumin may stable to high trend. On Arrival front, Unjha mandi’s daily arrival was 35,000 bags (bag of 40 kg) was seen. April export demand sets the April price trend on either side means if demand is good prices would move up while if demand is weak or slow prices would see profit booking or could move lower.
On Exports pricing front – Price for 99% Purity was quoting around $ 2228 PMT from the level of $ 2140 PMT – FOB (Free on Board) level.
SOYBEAN
Soybean prices surge in the starting of the week on back of strong demand while moving later to the week ended prices remain stable. Market traders expects prices may remain flat to positive in upcoming week on back of higher supply from Brazil and improved demand in export market. On international front, prices of the bean to remain under pressure on higher supply from Brazil, worlds third biggest bean producer, after reported that Brazilian soybean harvesting is 61% completed as compared to 59% completed year ago during the same period. However on lower prices demand from world’s biggest bean consumer China, would arise which could cushion soybean prices at lower levels.
Chana
Ncdex Chana prices have seen some strong support in the range of 4300 – 4340 on back of demand revival from bulk consumers and supplies in domestic markets. Market expects domestic demand in local mandis for peas is strong which can push the Chana prices to the higher levels.
Peas demand in domestic market is strong on back of upcoming summer and wedding season. However, sharp rice in prices may be capped on higher supplies in local mandi’s. On physical front, last week arrivals of 8,000 bags in much spot markets were seen which was nearly 50% of the arrivals of 15,000 – 16,000 bags last year same period.
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Meanwhile, Rajasthan is second biggest Chana producing state is expected to increase by 1.20 million tons as compare to 911,000 last year. Meanwhile, it is expected that arrival will increase in coming weeks and in peak season expected to reach 100,000 bags of chana every day. Additionally, government will buy additional 100,000 tons of pulses, mainly Gram, Massor Dals, from Rabi season.
SUGAR
Sugar prices once again sweetened during the week on robust demand from bulk consumers and lower output estimates for 2015-16. Indian sugar rose by 16% as country exported 86 thousand tons of sugar this week (March 20th) compared to 73.9 thousand tons of exported last week. On Domestic front, demand in local markets is increasing on upcoming wedding season and summer demand. Lower prices were also supported on falling output forecast data for 2015-16.
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Global Sugar Prices have hit 19 month high and reached 16.29 cent a pound, due to which Indian millers are finding themselves in sweet spot to win more contracts for exports, according to the ISMA (Indian Sugar Mills Association). Domestic millers have exported nearly 1.4 million ton sugar and some major contracts are under process, which shows demand is significantly higher than expected.
Recently, Maharashtra govt. exempted purchase tax on sugarcane for millers in the state. Previously, millers were supposed to pay 3% purchase tax on the FRP (Fair & Remunerative Price), which turns equivalent to Rs 9 per quintal of sugarcane.
WHEAT
Wheat prices seen some support in range of 1550 – 1555. Wheat has become the news or talkative story for the month as major news like importing duty implemented, cropping loss and low yield. Recently, 25% import duty implemented on wheat south Indian millers have struck some import deals from Australia so far (around 3 lakh tons) for new marketing years and delivery is expected to reach in May this year. On contrary domestic front, new crop has started entering the market and would increase in April.
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Importers Lobby are intentionally planting story for lower crop size so that government would revise import duty from 25%, however current situation suggest revision on import duty is unlikely.
Ethiopia has issued an international tender to buy around 499,000 metric tons of milling wheat sourced from optional origins as country continues purchases following a serious drought. Tender is likely to close on March 25th which would clear the picture of who tendered for supply and all.
As per latest update by USDA Phillippines wheat import may decline to 4.3MMT in MY 2015-16 due to sufficient stock. Imported volume may decrease by 16 % this year.
With an estimated drop of 25-30% (during 2015-16) in cotton yield in the state is expected to reach the lowest level in 10 years.