Tag: indian commodity

Indian Agri Market Snapshot_Week Ended_April 02,2016

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Indian Agri Market Snapshot:

Financial year and month end March saw the markets were steady and stable on the front of pricing and news outflows. Few physical markets were closed. Volatility was observed during the month, with an expectation of crop failing, unseasonal rain and stockiest demands. However, slight pickup in export demand, summer season and festive demand has push the prices of the few commodities higher while in some of the commodities profit bookings from the higher levels has also been seen.

Meanwhile, we believe the upcoming monsoon updates, crop outcomes and export demand will drive the market trends for specific commodities.

TOP NEWS

  • According to Senior Official from Meteorological Department – Onset of monsoon rains over India will likely to impact owing to El-Nino. However, according to present forecast by various international weather agencies – El Nino is declining and is expected to be neutral by May end. While we believe if El-Nino diminishes by may end it may impact onset of monsoon in India which starts in early phase of June.
  • IMD (Indian Meteorological Department) is likely to issue its first 2016 monsoon forecast in 3rd week of April, which may be normal as per various parameters available as of now.
  • According to Weather Department – Indian will have another hot period of summer this year, above the normal temperature historically. IMD says there is high probability of 76% maximum temperatures in the core heat wave zone during the year.

SOYBEAN

Soybean prices has seen volatility during the week but ended on the higher levels of 4119. Prices remain firm in the second half of the March on back of lower planting data outcome from USDA, firm global markets, and strong demand from stockiest in domestic market. Prices rose from the levels of 3800 to the levels of 4100 in the time span of just 15 – 20 working days.

USDA has projected US 2016 soybean planting lower at 82.2 million acres slightly below from the previous 82.7 million acres estimated planting in 2015. While on contrary, soybean stocks stored on farms are estimated at 728 million bushels, up 19% on yearly basis and off farm stocks at 803 million bushels up 12% from last year same month march.

CHANA

Market during the week remained firm, as strong demand from local traders and restricted arrivals. According to domestic trader- Rajasthan arrival of Chana may increase in coming days due to start of new financial year and prevailing higher prices. On physical market front – Mandis – Chana is hovering in the range of Rs 4200 – 4400 per quintal with the arrival of 15,000 – 20,000 bags per day.  In coming weeks, prices on the higher levels could see some pressure on back of arrival pressure in major mandis.

According to USDA outcome report – US farmers are planning to plant in large area of Chickpeas due to strong prices and demand, as compared to last year. As per expectations, planting area for small chickpeas to increase by 15% to 83,000 acres and for large chickpeas is expected to grow by 20%.

TOP NEWS

  1. On Buffer Stock of pulses – HAFED will procure Chana on behalf of NAFED in Haryana. Haryana gram production estimate is around 1.05 lk tonnes and arrivals are expected from Mid April. If prices in physical market decreases or comes around MSP, government intervention to cernment would pay Rs 75 per quintal over and above MSP.
  2. On Carry out stocks – Canadian Chickpeas are expected to fall from 125,000 MT in 2014-15 to 50,000 MT in 2015-16, mainly due to strong exports demand and lower production.

MCX COTTON

Cotton prices are moving high, rose to over one- month high in late morning trades in Friday, on back of falling output estimates for 2015-16. Fundamentals are bit supportive for uptrend as intensifying concerns over lower production of cotton amid tightening arrivals at major trading centers. Recent outcome of CIA (Cotton Association of India) has further revised its production estimates downwardly to 34.5 million bales as estimated before to 35.3 million bales. Cotton arrivals in current season have declined by more than 11% on year.

Market Movement

All India arrivals reported so far in current season stood at 24.84 million bales as on March 22, according to CCI (Cotton Corporation of India). Meanwhile, US plantation for cotton may stand at 9.562 million acres, up 11.4% as compared to last year. Upland area is estimated at 9.347 million acres, up11% and prima plantings forecast at 215,000 acres up 35.6% from 159,000 acre last year.

SUGARM

Sugar prices across the globe have skyrocketed, prices are trading firmly higher globally on back of lower stocks, summer demand and higher exports. Sugar price on exchange has gains nearly Rs 400 during March and further rise is imminent with pick up in demand for the hot summer season and export demand. Local traders say prices to remain firm in coming months. On retails pricing front prices have risen to Rs 40/kg from the levels of Rs 35/kg in the time span of just one month.

Sugar Consumption during summers remain pretty strong because of increased demand from confectioners, ice cream and aerated water manufacturers. Year of 2015 remains strong for sugar manufacturers on back of strong export demand, strong local demand, and lower stocks. On capital markets front sugar stocks surged in range of 50 – 80% in the time span of just 6 – 9 months.

Market Movement

Sugar market sentiment has changed drastically in last one year on back of lower stocks wherein, estimated export of nearly 1.7 million ton will bring down the carry forward stocks to below 8 million ton from 9 million tons a year before – according to ISMA official said.

According to domestic traders – Since price rise in global markets are showing bullish sentiment, boosting local stockiest confidence to stock the commodity on expectation of further increase in prices. If prices sees some pressure from higher levels stockiest or traders would support the prices from further fall on robust demand domestically and internationally.

Prices have seen sharp upward movement from the levels of Rs 3250 to the levels of Rs 3680 in the time span of just one month March.

 

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Indian Agri Market Snapshot_Week Ended_25th March

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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.

Top News

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.

Top News

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.

Top News

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.

 

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Indian Agri Markets Snapshot_Week Ended_18th March

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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).

 

 

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Indian Agri Market Snapshot_Week Ended_March 11 2016

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Indian Agri Market Snapshot :

Domestic agri markets likely to trade volatile on back of new arrivals of rabi crops, recent changes in the climates and outcomes of the arrivals data. Demand for domestic and export markets likely to pick up as new crop arrivals will start rising in coming days in mandis. Recent weather report outcome shows prospects of rains in areas like North, North West & Central India are high which could adversely impact the rabi crop and the prices of the commodities also.

Top News

Recent developments of adverse weather impact, positive outcome from the Union budget, new arrivals in rabi crop and pick up in domestic demand on back of summer festivals – has lift the prices of various commodities from the lower levels strongly.

Cumin Seed or JEERA

Prices of Cumin seed & Coriander has shown an uptrend in Agri markets during the week ended on 11th March on back of adverse weather caused by Western disturbance. India is major producer and exporter of spices. Export data from Spice Board of India shows increase of 9% during 2014-15 to 8,93,920 tons as compared to 8,17,250 tons a year earlier.

Jeera prices on NCDEX March contract may see prices upwards on back of unseasonal rain, which adversely affected the report of crop damage in some regions of Gujarat (including Saurashtra) and Rajasthan. During last week in spot market moderate demand has seen from the stockiest which has supported the prices on the lower levels. Moreover, the production in Syria (second largest producer of cumin seed) and Turkey (third largest producer) is expected to be low by nearly 15% due to geo-political tensions which would led to positive sentiments in Jeera Market domestically in coming months on prices front.

Daily fresh arrival of 27,000 bags has been reported in Unjha market. However, overall output is expected to be higher than previous year, which would cap the prices of Jeera on higher levels.

Coriander Seeds

During last week prices of coriander has seen uptrend on back of crop damage report and fresh demand in the sport market. Buyers from different mandis like Kota, Ramganj and Gondal has seen active due to good quality new supply coming to the markets. Fresh arrivals in Kota- Rajasthan and Gondal – Gujarat has seen total arrivals of 920 and 376 quintals respectively.

Coriander prices to remain positive in coming weeks due to limited supply of new crop would attract good buyers; reports of unseasonal rainfalls, and demand from end-user industries of quality produce may support the prices on the lower sides.

Prices of Coriander have also seen uptrend in last week on back of unseasonal rains, which would have damaged some of the crop.

Key Points to Watch Out in Coming Week for Price Variations:

  • Unseasonal Rain – Effects and Crop Damage outcomes.
  • Arrivals of fresh crops in Mandis.
  • Export demand in International Markets.

 

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