Indian Agri Markets Snapshot
Week remained very specific on the pricing movements and volatility where in prices of major commodities fell as arrivals picks up of the Rabi crops amidst lower demand in exports and domestically.
Specific commodities like Guar & Chickpeas showed moderate correction in pricing on back of higher arrivals in physical markets during the week while on the spices front Cumin Seeds has seen some support at lower levels while turmeric showed moderate profit booking from the recent sharp price movements in last few weeks. However, oil complex during the weak remained weak on back of slower demand in international markets.
TOP NEWS
Rabi crop arrivals to pick up in coming weeks, which could put pressure on the commodities as physical markets could see higher supplies amid slower demand in export markets are slow on back of political unrest and currency devaluations.
Spice Complex-showing signs of strong support on lower levels on back of lower crop arrivals or crop damage due to unseasonal rains or climate change.
SOYBEAN
During the week ended March 18 prices of soybean increased on the closing trades of Friday on back of supply worries from U.S and on international front seen some rising in demand. Recent outcome of USDA production estimates output of 106.9 million tons in March as compared to 107.1 million tons in previous month. Meanwhile during the week output from World’s third largest producer Argentina, been maintained at 58.5 million tons unchanged on monthly basis while been lower then year ago of 61.4 million tons.
In physical market prices remained volatile during the week on back of weak demand in mandis due to higher prices and limited arrivals form Madhya Pradesh, which is the biggest producing state in India. Beans prices been supported by improved demand after USDA reported higher sales and lower production output. Last week Net sales reported were up 51% at 623,700 tons as compared to previous week data output. However, the other major factor supported the prices was supply worries arise in the USDA report, according to NOPA.
Price of Soybean in NCDEX April Contract was 3772, while on the lower side price of 3732 has been tested.
WHEAT
Price during the week remained in downtrend, on back of outcome from Head Directorate of Wheat Research Mr. Gupta announced that unseasonal rains in north India unlikely to have any impact on the standing wheat crops and additionally he said the total output of Wheat to remain higher than the previous year. Last Year, wheat crop over 19 million hectare was affected due to heavy rains, winds and water logging however, current year there is no water logging and Sun shine has seen after the rains.
Wheat prices decreased by 1.84% from Rs 1682/ quintal to Rs 1651.2/quintal during the week ended. Overall, prices of wheat have declined by nearly 4.8% in last two weeks. In Physical markets prices in states like Karnataka, Kerala, Maharashtra and Odissa seen declines in prices while other states like Haryana, MP and many more has seen price increase. Additionally, Wheat stock in central pool was registered at 16.88 MMT (as of March 1st 2016), which is lower by nearly 13 % from previous year March 2015. According to the government procurement policy, on 1st April every year government needs to maintain 7.46 MMT wheat as buffer. If we include buffer as well as registered pool output then it is said that crop would be sufficient enough.
COTTON – MCX
Cotton prices slumped during the week and touched to the three month low on back of subdued demand from bulk consumers as well as weak demand in export markets. On contrary, in physical market the news and output data suggest the prices to rise as news of attack of pink bollworms coupled with erratic rainfall or unseasonal rains had seriously impacted the cotton yield in Gujarat.
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.
Top News
Punjab Government has reduced the VAT (Value Added Tax) on cotton yarn and cloth from 6.05% to 3.63%. According to CAI (Cotton Association of India) arrivals during the current season till February are estimated at 245 lakh bales as compared to 276.25 lakh bales in same period last year. The estimation coming out from government agency indicates a lower crop this season while the major impact on prices is due to subdued demand in exports market.
Price of cotton has reduced significantly in last 2 months from the levels of 17,000 to the levels of 15,690 (Friday closing).
