Commodities Daily Report

Wednesday| August 22, 2012

Agricultural Commodities

Content
News & Market Highlights Chana Sugar Oilseed Complex Spices Complex Mentha Potato

Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narveker@angelbroking.com (022) 2921 2000 Extn. 6130 Anuj Choudhary - Research Associate anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132

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Commodities Daily Report

Wednesday| August 22, 2012

Agricultural Commodities
News in brief
Rains likely for the peninsula this week
Scattered rains, expected to hit the peninsula during the next seven days, are likely to be confined to mainly coastal and interior Tamil Nadu. This would be an extension of ongoing rains over east India and the hills of east and west Himalayas and points to a recess from the heavy rains over Central India. Despite the ongoing heavy monsoon spell, the rain deficit for the country, as a whole, persisted at 16 per cent. At 10 per cent, Central India had the least deficit among the four homogenous regions as on Monday. The deficit was 15 per cent over east and northeast India. South peninsula has totted up 18 per cent as on date. Some rains indicated during the course of the week may not significantly alter the position. North-west was burdened with the highest deficit of 25 per cent, but it made for a massive improvement of over 50 per cent in JuneJuly. (Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Aug 21, 2012

WoW MoM YoY

Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz

17885 5421 55.3 96.68 1640

1.10 1.02 -0.66 0.70 1.48

0.89 0.76 -0.54 3.48 2.53

3.51 3.40 0.25 4.34 3.78

9.45 10.66 21.38 14.93 -13.17

Source: Reuters

Consumer price index eases in July, but food prices keep rising
Consumer price inflation eased slightly in July this year, though food prices continued to soar both in urban and rural India. The combined index for the both urban and rural fell marginally to 9.86 per cent in July this year and down from Junes 10.02 per cent. The fall was largely on account of a drop in urban inflation that fell to 10.10 per cent from 10.44 per cent. For rural India however, inflation moved up slightly to 9.76 per cent from 9.74%. However, both rural and urban India were weighed down by the high food prices. Food prices rose 11.53 per cent in July up from 10.71 per cent. Food prices rose 12.51 per cent for urbanites and 11.33 per cent for rural folk. In June the food price inflation for the two categories were 11.52 per cent and 10.41%. The increase in food prices was led by cereal prices that rose 6.18 per cent rural folks and 7.28% for urbanities. Among the key food items that hit food basket was the high prices of pulses. Pulses prices in July rose 12.5%, up from the Junes figure of 9.34 per cent. Edible oil, a critical ingredient in both rural and urban households, prices rose by 17.4 per cent. (Source: Financial Chronicles)

Six rain-deficit states seek Rs.43,461-cr relief

Six states, including Rajasthan Maharashtra and Gujarat, which have been badly affected by rainfall deficiency, sought a total assistance of R43,461.73 crore from the Centre to tide over the crisis. Karnataka, Haryana and Punjab are the other states that have sought Central assistance for drought mitigation across various sectors including feed and fodder, minister of state for agriculture Charan Das Mahant said in a written reply to Lok Sabha. Preliminary reports indicate a decline in area under cultivation of coarse cereals to the extent of 4.03 million hectare which is likely to have an adverse impact on availability of feed and fodder, Mahant added. He said there is no proposal under consideration of the Centre to provide fodder security to the livestocks population on the lines of the food security for human beings. This is because Central and Centrally sponsored schemes are available for development of feed and fodder. (Source: Financial Express)

MP abolishes levy on rice; to implement custom milling of paddy

The Madhya Pradesh Government has decided to abolish the policy of fixed levy on rice and has made amendments for custom milling of paddy. Deadline for custom milling of paddy has been extended from June 30, 2012 to January 31, 2013, an official release said adding efforts will be made to ensure completion of work by identified agencies before the deadline. As per amendments made in the policy, now milling process will be undertaken at market rate without recovering levy from surplus paddy procured or through procurement during next Kharif season. For this, the fixed levy policy has been abolished with effect from the date of implementation of milling rate. Milling rates will be determined on the basis of open tender by State Civil Supplies Corporation & State Cooperative Marketing Federation.
(Source: Financial Express)

Iran emerges largest buyer of Indian soyameal

After basmati and crude oil, it is soyameal thats getting India closer to Iran. The West Asian country has emerged as the largest buyer of soyameal from India in recent months displacing Japan from the top slot. Until now, Iran has been largely sourcing soyameal from Latin American countries such as Brazil and Argentina. In the April-July period, Iran imported 4.4 lakh tonnes of soya meal accounting for over half of the Indias exports of 8.25 lakh tonne for the period. This is according to the data collated by Soyabean Processors Association of India (SOPA). The recent bilateral payment mechanism that allows importers in Iran to make payments in Indian rupees is aiding the soyameal exports. Irans total requirement of soyameal is estimated to be between 1.2 and 1.5 million tonnes. We are in a position to supply at least 40-50 per cent of their demand, Agarwal said. India exported 40 lakh tonnes of soyameal worth Rs 7,017 crore in 2011-12. Japan, which accounted for 30 per cent of the Indias exports last year, has been the largest buyer for the past five years. Vietnam, China, Korea, Myanmar and the Philippines are the other large buyers of India soyameal. (Source: Business Line)

PMEAC proposes reforms in agri-marketing, tenancy

The Prime Ministers Economic Advisory Council (PMEAC) on Friday suggested a series of measures including reforms in the state agricultural marketing system and granting tenancy rights to small farmers for boosting agricultural productivity. Stating that granting legal tenancy rights to a large number of small farmers would expand their small land holdings, PMEAC in its in its economic outlook (2012-13) noted that large farmers who would like to pursue non-farming activities may like to lease out their land if the risk of losing their ownership rights is averted. (Source: Financial Express)

Nearly 25 mt cane diverted for fodder in Maharashtra

The Maharashtra sugar industry is shocked over rapid diversion of sugarcane for fodder, especially in the drought-hit districts. According to the industrys calculation, so far, 25 million tonnes (mt) of sugarcane have been diverted as fodder and it fears more diversion would take place if there isnt any rainfall in the coming days, especially in the 64 talukas where rainfall has been below 25 per cent. However, cane growers are happy to make a fortune as they are getting Rs 2,500- Rs 3,000 a tonne. Industry sources believe the diversion of 25 mt of sugarcane translates into a three mt loss of sugar production in Maharashtra at the average recovery rate of 11.7 per cent. (Source: Reuters)

Special plan to Produce 19 + MT Pulses in Kharif this year

Government has launched a Special Plan to achieve 19 plus million tonne of pulses production during kharif, 2012 in 16 States. with an allocation of Rs.15354.00 lakh comprising Rs.10730.00 lakh for activities to be undertaken under NFSM and Rs.4624.00 lakh for activities to be undertaken within National Mission on Micro Irrigation Scheme. The Plan basically envisages utilization of new areas through intercropping, improving planting techniques and irrigation use efficiency for inclusive water management and use of important critical but low cost inputs like sulphur and weedicides and productivity boosters. (Source: PIB) the second half of September, Somar meteorologist Celso Oliveira said.

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Commodities Daily Report

Wednesday| August 22, 2012

Agricultural Commodities
Chana
Chana September futures declined sharply on improved rains that have raised hopes for rabi sowing. Also, expectations government may intervene to curb the spiraling prices of Agri commodities led to selling pressure on Tuesday. Monsoon is seen recovering gradually in the month of August reveals the th latest report from IMD, wherein monsoon as on 16 August 2012 were seen 15% below normal. Central, southern and northwest region has received good rains in the last 2 weeks. This has aided sowing in the last one week. Also this may prove beneficial for the chana sowing. The Cabinet Committee on Economic Affairs approved the Minimum Support Prices (MSP) for Arhar (Tur) and Moong for 2012-13 season. The MSP for Arhar has been fixed at Rs.3850 per quintal and of Moong at Rs.4400 per quintal marking an increase of Rs.650 per quintal and Rs.900 per quintal respectively. Government released fourth advance estimates wherein it revised upward Chana output at 7.58 mn tn from 7.4 mn tonnes estimated in the third advance estimates and 8.22 mn tn in 2010-11.

Market Highlights
Unit Rs/qtl Rs/qtl Last 4867 4792 Prev day -1.17 -3.00

as on Aug 21, 2012 % change WoW MoM -0.95 -0.87 -0.35 1.33 YoY 44.41 44.21

Chana Spot - NCDEX (Delhi) Chana- NCDEX Sept '12 Futures

Source: Reuters

Technical Chart - Chana

NCDEX Sept contract

Sowing progress and demand supply fundamentals

According to the Ministry of Agriculture 85.32 Lakh hectare area has th been planted under Kharif pulses as on 17 August, 2012 compared to 97.38 lakh hectare (ha) same period last year, a decline of 12.4% . Sowing is reported lower mainly in Rajasthan. Rajasthan Agriculture Department states that, planted area under Kharif Pulses is down at 15.33 lakh hectares ha compared to 24.14 lakh ha same th period last year. (Dated 17 August, 2012). Sowing which was down by more than 55% has gained momentum after improvement in rainfall in the last one week and is now down by 35%. In Maharashtra, Kharif Pulses sowing is down by 7% at 18.63 lakh hectares. While in AP it is up by 5% at 6.98 lakh hectares. According to the Fourth advance estimates, Pulses output is pegged at 17.21 mn tn in 2011-12 compared with 18.24 mn tn produced in the year 2010-11. While Chana output in 2011-12 is estimated at 7.58 million tones, Tur is estimated at 2.65 million tones, Urad is estimated at 1.83 million tones, Moong is estimated at 1.71 million tones. As per the latest release, Ministry of Commerce & Industry revealed that 20.23 lakh tones of peas, 2.03 lakh tons of Chana, 4.32 lakh tons of Urad & Moong, 1.12 lakh tons of Masoor and 4.26 lakh tons of Tur has been imported by India during April11-March 12. India's consumption of pulses is on the rise with an annual growth of around 5% but production is seen lower, which may lead to increase in imports this year. However, rupee weakness may turn import costlier. Around 74% of Indian chickpea imports come from Australia.
Source: Telequote

Technical Outlook
Contract Chana Sept Futures Unit Rs./qtl

valid for Aug 22, 2012 Support 4690-4740 Resistance 4840-4885

Outlook
Chana futures may remain sideways as supply shortage may be over shadowed by improved rains in the last 2 weeks. In the medium term to long term, the trend remains positive as supplies may not be sufficient to meet the rising demand of the commodity. Also lower sowing of kharif pulses may support chana prices.

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Commodities Daily Report

Wednesday| August 22, 2012

Agricultural Commodities
Sugar
Sugar September declined sharply on account of sufficient supplies to meet festive season demand after government released additional quota. Weak international markets also led to selling pressure on Tuesday. Industry body has estimated 7 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may exports 2.53 mn tn sugar in 2012-13. India will likely produce 25 million tonne of sugar in 2012-13 factoring in dry spells in biggest producer Maharashtra as well as Karnataka. The Central Government has released additional 4 lakh ton of non-levy sugar for the month of August, 2012. With the earlier release of 45 lakh ton in July and 2.66 lakh ton in July the total 51.66 lakh ton non-levy sugar will be available. In the international markets, Raw sugar futures on ICE and Liffe White sugar settled 3.51% and 3.23% lower on Tuesday. With international prices trading at such low levels, the exports from India is not viable as domestic prices being quoted much higher.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Sept '12 Futures Rs/qtl Last 3690

as on Aug 21, 2012 % Change Prev. day WoW 0.54 -2.89 MoM 4.76 YoY 23.00

Rs/qtl

3411

-1.81

-3.43

1.46

23.19

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 547.9 439.56

as on Aug 21, 2012 % Change Prev day WoW -3.23 -3.51 -4.26 -2.66 MoM -15.77 -17.31 YoY -30.17 -34.46

Domestic Production and Exports

As on 9 August, 2012, the area under sugarcane is estimated at 52.88 lakh ha, up from 50.59 lakh ha on same period a year ago. Despite of higher acreage, the producers body has estimated next years output lower at 25mn tn, down by 1mn tn compared to the current year. Sugar production in India the worlds second-biggest producer touched 26 million tonne since October 1, 2011. IMD has so far predicted normal rains in August. However, rains in the first week of august are still 1% below average. If monsoon recover in the month of August, then there would not be much downward revision in the output and vice a versa. With the opening stocks of 7 mn tn, domestic Sugar supplies are estimated at 32mn tn against the domestic consumption of around 22.523 mln tn for 2012-13. Thus, no curbs on exports are seen as of now.
th

Source: Reuters

Technical Chart - Sugar

NCDEX Sept contract

Global Sugar Updates

According to Unica, the 2012/13 sugarcane crop is seen at 596.6 mn tn, down 1 percent from the April estimate of 602.18 mn tn, according to the second estimate of the crop this season from the agriculture ministry's supply agency Conab. Despite the drop in the cane crop estimate from April, sugar output -- now forecast at 38.99 mn tn -- is virtually stable with the 38.85 million tonnes forecast four months ago. The global sugar surplus remains on target to fall in 2012/13 season, though declines will be less than previously suggested, while adverse weather in several producers may stop prices dropping far below recent levels. (Source: Reuters) According to the International Sugar Organization (ISO), the global sugar surplus is forecast to halve to around 3 mln tn in 2012/13 (OctoberSeptember) from a surplus of 6.5 million tonnes in 2011/12).

Source: Telequote

Technical Outlook
Contract Sugar Sept NCDEX Futures Unit Rs./qtl

valid for Aug 22, 2012 Support 3350-3385 Resistance 3430-3460

Outlook
Sugar prices in the domestic markets may decline sharply taking cues from the weak international markets. Medium term outlook for sugar would depend on the monsoon in the current month and in September and thereby output estimates for next season that will begin in October.

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Commodities Daily Report

Wednesday| August 22, 2012

Agricultural Commodities
Soybean spot as well as futures remained firm on Tuesday on account of supply tightness in the domestic as well as global markets till the arrival of fresh crop in mid September. CBOT Soybean settled higher by 2.9% on Tuesday as cash markets firmed amid slow farmer selling and expectations of continued demand from exporters and soy processors, despite near-record high prices. Markets had a strong (monthly U.S.) crush report and another strong week of export sales last week. According to weekly crop progress report, the condition of U.S. corn crops was unchanged last week, and soybeans improved to 31% during last week from 30% in good to excellent condition as cooler weather eased plant stress from the worst drought in half a century. th USDA released its monthly crop report on 10 August wherein its cut U.S. 2012/13 soybean production forecast to 2.692 billion bushels, from 3.05 billion in July. India's oil meal exports fell to 2.75 lakh tn in July from 2.82 lakh tn a year earlier led by a sharp drop in the overseas sales of rapeseed meal. Soy meal exports rose to 1.68 lakh tn in July, from 1.39 tn a year ago. In the domestic markets, as on 17 August Oilseeds have been sown in 160.77 lakh hectares so far, compared with 167 lakh hectares same period last year. Soybean area is higher at 106.4 lakh hectares. In 2011-12 season, soybean was sown under 102.9 lakh hectares area and recorded 12.28 million tonne output, down from 12.73 mn tn in 2010-11 season.
th

Oilseeds Soybean:

Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Oct '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soyoil- NCDEX Aug '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 4519 4000 782.3 793 Prev day 0.47 1.59 0.28 0.56

as on Aug 21, 2012

WoW -1.70 -13.29 0.65 2.18

MoM -4.48 -16.95 -0.55 -0.74

YoY 88.68 66.04 17.41 18.77

Source: Reuters

as on Aug 21, 2012 International Prices Soybean- CBOTSept'12 Futures Soybean Oil - CBOTSept '12 Futures Unit USc/ Bushel USc/lbs Last 1754 55.57 Prev day 2.92 3.12 WoW 4.38 5.19 MoM 7.33 1.68
Source: Reuters

YoY 27.11 -3.02

Crude Palm Oil

% Change Unit
CPO-Bursa Malaysia Sept '12 Contract CPO-MCX- Aug '12 Futures

as on Aug 21, 2012

Refined Soy Oil: NCDEX Soy Oil & MCX CPO settled higher on
Tuesday taking cues from the firm domestic oilseeds prices. India imported 112,611 tonnes of refined palm oil in July, down 9.28 percent from June. Total vegetable oil imports in July were 870,328 tonnes, up from 783,315 tonnes in the previous month (Source: Sea of India). Malaysian palm oil Production has risen consistently since March 2012 and expected to go as high as 1.9 mn tn in September. On the other hand, exports have fallen 14.8 percent in July to below 1.23mn tonnes compared to 1.45mn tonnes a month ago due to a lull in Asian demand. Although, Malaysia's July palm oil stocks rose 17.6 percent to 1,998,870 tn from a revised 1,699,117 tn in June, the development of El nino pattern might hamper palm oil yield and support the upside in the prices. Indonesia, the world's top palm oil producer, has lowered its earlier output forecast by 8 percent to 23.6 million tonnes this year

Last 2898 557.4

Prev day 1.33 0.60

WoW 2.40 0.34

MoM -2.42 -2.24

YoY -14.76 10.64

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Sept '12 Futures Rs/100 kgs Rs/100 kgs Last 4218 4379 Prev day -2.60 -0.50

as on Aug 21, 2012 WoW -1.33 1.20 MoM -3.58 -2.41

Source: Reuters

YoY 43.97 50.17

Technical Chart Soybean

NCDEX Oct contract

Rape/mustard Seed: NCDEX September mustard seed prices declined 0.5% on profit booking. Mustard output this season has declined significantly and deficient rains in Rajasthan would not provide proper moisture for mustard sowing next season. This would keep the downside restricted. According to a circular issued by NCDEX, existing Special Cash Margin of 5% on the Long side shall be increased to 15% on all the running and yet to be launched contracts w.e.f beginning of 18/07/2012. Outlook
Oilseed complex may open higher on account of firm overseas markets. However, sharp gains may be capped amid higher soybean acreage in the domestic markets couple with improved rains in the past few weeks. Sentiment remains cautious on possibility of an El Nino returning to Southeast Asia that could hamper output in top producers Indonesia and Malaysia.
Source: Telequote

Technical Outlook
Contract Soy Oil Sept NCDEX Futures Soybean NCDEX Oct Futures RM Seed NCDEX Sept Futures CPO MCX Sept Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl

valid for Aug 22, 2012 Support 786-789 3925-3965 4320-4350 551.50-555 Resistance 797-801 4065-4105 4405-4430 563-568

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Commodities Daily Report

Wednesday| August 22, 2012

Agricultural Commodities
Black Pepper
Pepper Futures again corrected yesterday after some short covering on Saturday. Lower demand for Indian pepper in the international markets due to huge price parity has led to the correction. Prices also corrected due to good rainfall in Pepper growing regions in Kerala and Karnataka over the last few days. Many countries are importing pepper from Brazil and Indonesia than from India due to lower quotations. Good supplies from Indonesia have also pressurized the prices. The Spot as well as the Futures settled 1.03% and 0.87% lower on Tuesday. th According to the circular released on June 13 2012 the existing Special margin of 10% (cash) on the long side stands withdrawn on all running contracts and yet to be launched contracts in Pepper from beginning of day Friday June 15, 2012. Pepper prices in the international market are being quoted at $8,150/tonne(C&F) while Vietnam was offering its produce at $6,000/tonne for 500 GL. Brazil was offering its pepper at $6,150/tonne for the B-Asta grade. As per circular dt. 29/06/2012 issued by NCDEX, Hassan will be available as an additional delivery centre for all the yet to be launched contracts. (not applicable to the currently available contracts-till Dec 2012 expiry).

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Sept '12 Futures Rs/qtl Rs/qtl Last 41395 41960 % Change Prev day -1.03 -0.87

as on Aug 21, 2012 WoW -3.58 -7.27 MoM -2.52 -4.99 YoY 28.73 24.48

Source: Reuters

Technical Chart Black Pepper

NCDEX Sept contract

Exports
According to Spices Board of India, exports of pepper in April 2012 fell by 47% and stood at 1,200 tonnes as compared to 2,266 tonnes in April 2011. India imported 1,848 tonnes of pepper till March 2012 and has become the third country to import such large quantity after UAE and Singapore. (Source: Agriwatch) According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of black pepper in 2012 are forecasted at around 1,25,000 tonnes. Exports of Pepper from Vietnam during January till June 2012 is estimated around 73000 mt 73,000 mt, higher by 4.3% in volume and 31.7% in value compared to corresponding year last year. Exports of Pepper from Brazil during January till May 2012 are estimated around 13369 mt. (Source: Peppertradeboard). Pepper imports by U.S. the largest consumer of the spice declined 14.8% in the first 2 months of the year (2012) to 8810 tn as compared to 10344 tn in the same period previous year. Imports of Pepper in the month of February declined by 16.8% to 3999 tn as compared to 4811 tn in the month of January 2012. Exports from Indonesia posted significant decrease of 42% as compared to previous year. Exports stood at 36,500 tonnes as compared to 62,599 tonnes in the last year. During May 2012 Brazil exported 1,705 tonnes of pepper as against 1600 tn in May 2011.

Source: Telequote

Technical Outlook
Contract Black Pepper NCDEX Sept Futures Unit Rs/qtl

valid for Aug 22, 2012 Support 41400-41620 Resistance 42200-42500

Production and Arrivals

Arrivals of pepper in domestic market stood at 8 tonnes while offtakes were 6 tonnes on Tuesday. Global Pepper production in 2012 is expected to increase 7.2% to 3.20 lakh tonnes as compared to 2.98 lakh tonnes in 2011 with sharp rise of 24% in Indonesian pepper output and in Vietnam by 10%. According to latest report pepper output in Vietnam is estimated to be 1.35 lakh tonne as compared to 1.10 lakh tonne estimated early in the beginning of year (2012). Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Pepper trade board) On the other hand production of pepper in India in 2011-12 is expected to decline further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year. Production is lowest in a decade.

Outlook
Pepper prices in the intraday are expected to trade lower. Lower demand for Indian Pepper in the international market as well as rains in pepper growing regions may pressurize the prices. However, low stocks in the domestic markets may support prices at lower levels.

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Commodities Daily Report

Wednesday| August 22, 2012

Agricultural Commodities
Jeera
Jeera Futures corrected sharply and hit the 3% lower circuit filter yesterday due to reports of good rains in Gujarat, the main jeera growing belt. Good rains will improve moisture levels which may increase prospects of better yield next season. However, Supply concerns from Syria and Turkey still exists. The Spot as well as the Futures settled 0.69% and 2.41% lower on Tuesday. Expectations are that large export orders may be diverted to India from the international markets due to the ongoing civil war in Syria which is hampering supplies. There are reports that there has been an increase in demand from Bangladesh for Indian Jeera. Production in Syria and Turkey is being reported around 17,000 tonnes and around 5,000 tonnes, lesser than expectations. Jeera prices in the international market of Indian origin are being offered at $3,000 tn (c&f) while Syria and Turkey are not offering their produce. Carryover stocks of jeera in the domestic market is expected to be around 7-8 lakh bags as compared to 4-5 lakh bags in the last year.

Market Highlights
Prev day -0.69 -2.41

as on Aug 21, 2012 % Change Unit Last 16225 15820 WoW -0.43 1.30 MoM -0.49 -5.50 YoY 4.02 4.44

Jeera SpotNCDEX(Unjha) Jeera- NCDEX Sept '12 Futures

Rs/qtl Rs/qtl

Source: Reuters

Technical Chart Jeera

NCDEX Sept contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 5,000 bags, while off-takes stood at 5,000 bags on Tuesday. Production of jeera in 2011-12 is expected to be around 40 lakh bags as compared to 29 lakh bags in 2010-11 (each bag weighs 55 kgs). (Source: spot market traders). According to Spices Board of India, exports of Jeera in April 2012 stood at 2,500 tonnes as compared to 2,369 tonnes in April 2011, an increase of 6%.

Source: Telequote

Outlook
Jeera prices are expected to trade sideways. Good rains in Gujarat may pressurize the prices. However, good export demand and lower arrivals in the domestic markets may also support prices at lower levels. In the medium to long term (Aug-September 2012) prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey and crop there is 30% short as compared to last year.

Market Highlights
Prev day 0.33 -2.60

as on Aug 21, 2012 % Change

Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Sept '12 Futures Rs/qtl Rs/qtl

Last 5465 5840

WoW -0.28 5.84

MoM -6.69 -10.37

YoY -5.40 14.11

Turmeric
Turmeric Futures corrected sharply yesterday due to sufficient stocks with the stockists. However, the spot traded on a positive note due to lower sowing. Demand from Pakistan from Punjab also lent support to the prices. Rainfall in Nizamabad is 29% lower than the normal as on 14/8/2012. Turmeric has been sown in 0.47 lakh hectares in A.P as on th 14 August 2012. The Spot settled 0.33% higher while the Futures settled 2.6% lower on Tuesday. As per circular issued by NCDEX, no fresh positions will be allowed in respect of Turmeric August 16, 2012 expiry contract from August 07, 2012 till the expiry of the contract. Only squaring up of existing positions will be allowed. The pre expiry margin on Turmeric has been increased to 5% for last 7 trading days increased on a daily basis on both buy and sell side from the existing 3% on daily basis for last 5 days.

Technical Chart Turmeric

NCDEX Sept contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 6,000 bags and 2,000 bags respectively on Tuesday. Turmeric production for the year 2011-12 is projected at historical high of 90 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 201011. Erode is expected to produce 55 lakh bags of turmeric a rise of 29% as compared to previous year. According to Spices Board of India, exports of Turmeric in April 2012 increased by 1% at 7,300 tn as compared to 7,230 tn in April 2011.
Source: Telequote

Technical Outlook
Unit Jeera NCDEX Sept Futures Turmeric NCDEX Sept Futures Rs/qtl Rs/qtl

valid for Aug 22, 2012 Support 15520-15625 5660-5750 Resistance 16050-16200 5920-6000

Outlook
Turmeric prices are expected to continue to trade sideways with a positive bias in the intraday. Reports of export demand from Pakistan may lend support to the prices. Traders also expect fresh export orders in the coming days. In the medium to long term (Aug to September) prices may take cues from the sowing figures.

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Commodities Daily Report

Wednesday| August 22, 2012

Agricultural Commodities
Mentha Oil
Mentha oil prices traded on a positive note yesterday due to buying by stockists at lower levels. The spot as well as the Futures settled 0.91% and 3.17% higher on Tuesday. Total Special Cash margin of 25% on the long side of Mentha Oil has been reduced to 10% in the May contract and 5% in June contract onwards from May 5, 2012. For detailed reference please refer to the Circular No: MCX/T&S/180/2012 dated 03/05/2012.

Market Highlights
Prev day 0.91 3.17

as on Aug 21, 2012 % Change Unit Last 1527 1340 WoW 0.14 2.16 MoM 3.93 0.53 YoY 24.26 9.04

Mentha Oil- MCX Spot (Chandausi) Mentha Oil MCX Aug Futures

Rs/qtl Rs/qtl

Production, Arrivals and Exports

According to spot market sources, the overall acreage is estimated to increase from 1.75 lakh ha to 2.1 lakh ha this year. The overall production of Mentha is expected to increase by 30% - 40% as compared to last year. Arrivals of the fresh crop are going on in the mandis and currently stand around 1200 drums (each drum weighs 180 kgs). Exports of Mentha during April 2011 to January 2012 witnessed a decline of 6% to 12,850 tonnes as compared to 13,550 tonnes in the same period last year.

Source: Reuters

Technical Chart Mentha Oil

MCX Sep contract

Outlook
In the intraday trading session Mentha oil is expected to trade sideways with a positive bias in the intraday. However, buying at lower levels may emerge from stockists anticipating good demand from pharmaceutical companies in the coming days. In long to medium term (July-September) prices are likely to remain under pressure due to peak arrival period.

Source: Telequote

Potato
Potato Futures settled 0.98% higher due to emerging demand at lower levels on account of festive season. Commodity market regulator Forward Markets Commission (FMC) has banned launch of new Tarkeshwar potato contracts. Also From 01-08-2012 no fresh positions shall be allowed during the Staggered Delivery period in all running contracts of Potato in MCX and NCDEX. Only squaring off of existing positions will be allowed during the Staggered Delivery period.

Market Highlights
Prev day -0.19 0.98

as on Aug 21, 2012 % Change

Unit Potato SpotNCDEX (Agra) Potato- NCDEX Sept '12 Futures Rs/qtl Rs/qtl

Last 1159 1165

WoW #N/A -1.03

MoM -0.27 -8.91

YoY 175.69 225.76

Production and Arrivals Scenario

Around 200-220 lakh MT potato had been stored in the country in different cold storages during the current season. Although 27-30% of the cold storage stocks are released so far from overall producing belts, they are much lower compared to normal 35-38% every year. According to NHRDF, The sowing of potato seed for Kharif production in Karnataka completed but the area sown is adversely affected due to less and delayed rains. The sowing in hills of Himachal Pradesh, Uttarakhand and Jammu and Kashmir are also completed. The seed sowing in Maharashtra for Kharif is continued, which is delayed due to delay arrival of monsoon, which is still scanty. The area for Kharif is expected to be less or may be same with delayed planting compared to last year, but it depends on further rains. With reports of crop damages in Karnataka, the supplies from this region to other states may also be affected as the overall output is expected to decline by 70-75%. In fact, the state may have to rely on the supplies from the north Indian markets.

Technical Chart Potato

NCDEX Sept contract

Source: Telequote

Technical Outlook
Unit Mentha Oil Aug Futures Potato NCDEX Sept Futures Potato MCX Sept Futures Rs/kg Rs/qtl Rs/qtl

valid for Aug 22, 2012 Support 1310-1324 1135-1148 1163-1180 Resistance 1355-1372 1180-1200 1215-1230

Outlook
Potato futures in intraday may trade sideways to up owing to emerging demand at lower levels. Also Upcoming festive season might provide support to the prices in Medium term.

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