Commodities Daily Report

Wednesday | April 11, 2012

Agricultural Commodities

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

Research Team
Badruddin - AVP Research badruddin@angelbroking.com (022) 2921 2000 Extn. 6129 Vedika Narvekar - Sr. Research Analyst vedika.narveker@angelbroking.com (022) 2921 2000 Extn. 6130 Nalini Rao - Sr. Research Analyst nalini.rao@angelbroking.com (022) 2921 2000 Extn. 6131 Anuj Choudhary - Research Associate anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132

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Commodities Daily Report

Wednesday | April 11, 2012

Agricultural Commodities
News in brief
Increase in the Minimum Initial Margin Chana, Potato, Rapeseed-Mustard Seed, Soybean and Refined Soy Oil contracts
As per a circular issued by NCDEX dt April 10, 2012, A Minimum Initial Margin of 10% of the value of the contract or VaR based margin whichever is higher will be imposed on all running contracts and yet to be launched contracts of Chana, Potato, Rapeseed Mustard Seed, Soybean, Refined Soy Oil contracts with effect from beginning of trading day Thursday, April 12, 2012. It is clarified that the Special Margins, Additional Margins or any other margins levied shall be over and above the revised Minimum Initial Margin. (Source: NCDEX)

Market Highlights (% change)

Last Prev. day

as on April 10, 2012

WoW MoM YoY

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

17244 5244 51.46 102.5 1643

0.13 0.18 0.54 0.98 1.87

-0.92 -0.98 1.15 -0.31 -0.59

0.41 0.41 2.17 -3.99 -3.55

-12.48 -11.25 15.94 -5.08 15.01

Source: Reuters

Pepper imports likely to increase

Pepper imports are likely to rise given the huge difference in domestic and global pepper prices. Lower availability of pepper in India and the substantial premium on Indian pepper to the tune of $1,300-1,500 per tonne is likely to prompt processors and traders to look at other prospects, traders said. Lower production in the last fiscal and the unfavourable weather for the next crop is seen giving support to the market. (Source: Financial Express)

Govts foodgrain inventory up 21%

The governments foodgrain stock rose 21 per cent to 53.4 million tonnes as on April 1, compared with 44.3 million tonnes in the year-ago period, according to the Food Corporation of India (FCI). The wheat inventory jumped from 15.4 million tonnes a year earlier to 19.95 million tonnes, while the rice stock rose from 28.82 million tonnes to 33.35 million tonnes, the FCI said on its website. (Source: Business Standard)

FIIs get automatic route to invest in commexes

The government has allowed foreign institutional investors (FIIs) to invest up to 23 per cent in commodity exchanges through the automatic route. This came into effect on April 10. As per the fifth edition of the consolidated FDI policy document released by the department of industrial policy and promotion (DIPP) on Tuesday, FII investment in commodity exchanges will no longer require government approval.
(Source: Financial Chronicle)

Capital formation in agriculture up 87%

The gross capital formation (GCF) in the agriculture and allied sectors in the country rose by 87% to Rs. 1,42,254 crore in the 2010-11 as compared to 2004-05, an official statement said on Tuesday. "According to the annual report of the Department of Agriculture and Cooperation for 2011-12, GCF in agriculture and allied sectors in 2010-11 was Rs. 1,42,254 crore. It was Rs. 76,096 crore in 2004-05," it said. It has risen from 13.5% of GDP in 2004-05 to 20.1% in 2010-11, it said. (Source: Business
Standard)

Offset Ban on Cotton Export by Raising Floor Price by 10%: CACP

The government should immediately announce a 10% increase in the floor price of cotton and rice to protect farmer incomes if it imposes a ban on the export of these commodities, India's two most economically significant cash crops, according to the Commission of Agricultural Costs and Prices (CACP), a body which advises the government on the pricing policy for major farm produce. Any ban on export is an implicit tax on farmers and should be immediately offset by a bonus on the minimum support price , CACP chairman Ashok Gulati told ET. (Source: Economic Times)

NABARD sanctions Rs. 6000 crfor2011-12 PTI Chennai

The National Bank for Agriculture and Rural Development (NABARD) has sanctioned Rs. 6,318.27 crore for various projects in Tamil Nadu and Puducherry during 2011-12, up by 47 per cent over the same period of previous year. During 2010-11 the banks refinance was extended for crop loans at Rs. 2,620 crore and for other short term purposes Rs. 330 crore.
(Source: Business Standard)

Cotton planting seen falling for first time in four years

Cotton planting in India, the second-biggest producer, will decline for the first time in four years as a ban on exports may spur farmers to switch to other crops, according to the Cotton Association of India. The acreage may fall about 15% in the season starting this month, president Dhiren Sheth said in a phone interview from Mumbai on Tuesday. Farmers sowed cotton to a record 12.2 million hectares (30.12 million acres) in 2011-2012, harvesting 34.5 million bales, according to the countrys Cotton Advisory Board. Sheths forecast is more than the 10% decline estimated by the US Department of Agriculture. A smaller Indian harvest may potentially reduce exports next year, and stem the 53% plunge in futures in New York in the past year. The country wont allow fresh exports this season as it builds reserves for the domestic textile industry, trade minister Anand Sharma said on Monday. (Source: Financial
Express)

MP races ahead in wheat procurement

After procuring a record 5 million tonnes (mt) of wheat in 2011-12, Madhya Pradesh looks set to surpass even that in the current rabi marketing season. This has happened with the state administration under Mr Shivraj Singh Chauhan, announcing a procurement price of Rs 1385 a quintal. This is Rs 100 more than the Centre's minimum support price of Rs 1285 for the 2011-12 crop that is being currently marketed. As a result of this extra price, the farmers are making a beeline to sell wheat to the State agencies in MP. The MP Government agencies have so far procured 1.54 mt as against 0.86 mt during this period last year. Meanwhile, harvesting is yet to really commence in key the wheat producing states of Punjab, Haryana and Uttar Pradesh. There are concerns over the untimely rains during the past couple of days affecting the quality of the grain. (Source: Business Line)

Extractors want cut in mustard seed contract validity

The Solvent Extractors' Association (SEA) has urged the commodity market regulator Forward Markets Commission (FMC) to reduce the validity mustard seed contracts to three months from nine months. Cutting down on the validity period of mustard seed will help reduce bullish trend being build by investment funds. Non-hedgers purchase mustard seed from spot market for delivery on the exchange platform and roll over their position into subsequent month contracts to earn inter-month spread, he said. (Source: Business Line)

3-fold surge in palm oil output to 1.5 L tonne

India s palm oil production has surged three-folds to 1.5 lakh tonne in the last fiscal from 50,000 tonnes in the 2010-11 financial year. Palm oil production in the country had touched about 1.5 lakh tonne in the last financial year from 50,000 tonne in the 2010-11 fiscal, a agriculture ministry official said. (Source: Financial Express)

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Commodities Daily Report

Wednesday | April 11, 2012

Agricultural Commodities
Chana
Chana spot prices extended gains of the previous day and settled 1.22% higher on Tuesday. However, Futures witnessed mixed trades and settled 0.78% lower on Tuesday owing to rumors of possible strict action by the Forward Market Commission to curb sharp rise in the prices. Reports of lower output in Rajasthan are providing support to the prices. As per the NCDEX circular dated 11 April, Initial Margin(IM) of 10 % of the value of contract or VaR based margin whichever is higher will be imposed on all contracts and yet to be launched contracts of Chana with effect from beginning of the day Thursday April 12, 2012. Arrivals in Rajasthan has began since last 2 weeks, however, the pace is very slow on account of sharp drop in yields and thereby output in Rajasthan, the second largest Chana producing state. Meanwhile, Madhya Pradesh traders are on strike in protest against certain rules enforced by central government under recent changes in Food Safety Act 2006. As per traders, local mandis are closed till 11th April but the protest might extend to 15th April. (Source: Agriwatch) Apart from the already imposed special margin on Chana, FMC has now th cut position limits wef 10 April, to curb the volatility in prices. As per the NCDEX circular dated 4 April, total position limits on all contracts for members will be revised to 75000 tonnes from the current 100000 tonnes and for the clients to 15000 tonnes from the current 20000 tonnes, while for the near month contracts, position limits for members will be revised to 15000 tonnes from the current 20000 tonnes and for clients it will be 3000 tonnes from the current 4000 tonnes wef th 10 April, 2012.
th th

Market Highlights
Unit Chana Spot - NCDEX (Delhi) Chana- NCDEX Apr '12 Futures Rs/qtl Rs/qtl Last 3584 3681 Prev day 1.22 -0.78

as on April 10, 2012 % change WoW MoM 2.73 2.02 -0.35 2.11 YoY 60.44 58.19

Source: Reuters

Technical Chart - Chana

NCDEX May contract

Source: Telequote

Demand Supply Scenario

The import of pulses is likely to cross three million tonnes this fiscal due to growing demand, country's apex body of pulses industry and trade th said on Wednesday, 4 April. As per Commerce Ministry, imports of chickpeas, pea and tur by India rose by 1655%, 25% and 16% to 1.7 lakh tn, 16.52 lakh tn and 0.34 lakh tn respectively.(Source: Agriwatch) With the commencement of harvesting in MP, the largest Chana producing state in India with more than 40% share, we expect supply pressure to build up gradually. According to Second Advance estimates, Pulses output is expected to fall by 5.26% to 17.29 mln tonnes as compared to 18.24 mln tonnes in 201011. Chana production is expected to decline by 6.8% to 7.66 mln tonnes as compared to 8.22 million tonnes in the last year. As output is likely to decline, India's pulses imports in 2011-12 (Apr-Mar) may rise nearly 10% from 2.75 mln tn in the previous year. 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. Around 74% of Indian chickpea imports come from Australia. However, despite increase in Australian Chickpeas production in 2011-12, lower carryover stocks and increasing domestic consumption may lead to 18% decline in chickpeas exports from Australia in 2011-12.

Technical Outlook
Contract Chana May Futures Unit Rs./qtl

valid for April 11, 2012 Support 3755-3780 Resistance 3876-3900

Outlook
Taking into consideration the cut in position limits by the regulator wef th Tuesday 10 April 2012 and increase in the initial margin, we expect prices to witness mixed trend. However, prices may continue to trade with positive bias on supply concerns as overall output is lower in the current season while consumption is growing at the same pace, leading to rising imports of Costlier Pulses.] In the short term (2 weeks), we expect Chana prices to trade in the range of Rs 3480 and Rs 3840 per qtl levels.

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Commodities Daily Report

Wednesday | April 11, 2012

Agricultural Commodities
Sugar
Spot prices of Sugar remained steady to slightly firm on account of seasonal demand from the bulk manufacturers to meet summer season demand. Futures witnessed long liquidation at the resistance levels and settled 0.61% lower on Tuesday. Expectations that government may consider further exports of sugar taking into consideration higher output may lend support to the prices. Government last week changed the release mechanism of non levy quota from Monthly to quarterly basis wef from April 2012. For April-Jun 2012 Non Levy quota is fixed at 45 lakh tonnes (excluding 1 lakh tn of carry over from last month, 12% lower compared to the same period last year. Liffe and Raw Sugar prices settled 2.14% and 2.89% lower respectively on Tuesday on account of higher Brazil sugar output forecasted by Conab for the year 2012-13. In the global markets sugar traders are adopting wait and watch policy and are closely watching the developments in Brazilian sugar cane crop.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Apr '12 Futures Rs/qtl Last 3035

as on April 10, 2012 % Change Prev. day WoW 0.83 -0.43 MoM 1.17 YoY 2.75

Rs/qtl

2761

-0.61

-0.22

1.77

1.17

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMay'12 Futures Sugar No 11-ICE May'12 Futures $/tonne $/tonne Last 630.1 530.44

as on April 10, 2012 % Change Prev day WoW -2.14 -2.89 -2.10 -3.40 MoM -0.05 #N/A YoY -9.77 -6.68

Domestic Production
As per the latest update by ISMA, India produced 23.2 mn tn sugar between Oct 01- Mar31, up 13% from the year ago period. (Source: Reuters). ISMA has estimated Sugar output in 2011-12 at 26 mn tn. In the first half of the season, Maharashtra has produced 8.0 mln tn sugar, up 11.4% from a year ago, UP 6.6 mln tn, up 14.8% on year, while Karnataka produced 3.5 mln tn, up 16.2%. The association said it expects Maharashtra, UP and Karnataka to produce 9.0 mln tn, 6.8 mln tn and 3.8 mn tn sugar respectively, in 2011-12.

Source: Reuters

Technical Chart - Sugar

NCDEX May contract

Exports
With the opening stocks of 6.8 mn tn, domestic Sugar supplies are estimated at 32 mn tn against the domestic consumption of around 22.523 mln tn. Thus, there is a wide scope for exports from India. Ministers panel allowed 1 mn tn of unrestricted white sugar exports th under OGL on 26 March 2012. This takes total exports in the current season at 3 mn tn, in line with what industry expected. The Food Ministry has issued an export order for more than 8.13 lakh tonnes of sugar, out of the second tranche of 10 lakh tonnes.

Source: Telequote

Global Sugar Updates

Brazil's 2012/13 center-south sugar cane crop that will begin crushing in weeks was forecasted at 33.8 million tonnes of sugar, up 9 percent from 31 million tonnes this season, according to Data agro consultant. Brazil's sugar output will rise about 5 percent in the 2012/13 season that is now starting, the government forecast on Tuesday, as better weather and replacement of old cane plants have the crop on a recovery path after output dipped last season (Source: Reuters). In Quarterly Market Outlook, the International Sugar Organization has increased its forecast for the global surplus in 2011/12 to 5.17 million metric tonnes, compared with its projection of 4.46 million tonnes made in November.

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

valid for April 11, 2012 Support 2810-2815 Resistance 2840-2846

Outlook
Sugar prices may consolidate and may recover gradually in the coming days on hopes of improvement in demand ahead of summer season. Despite sufficient supplies prices may not decline much from the current levels as they are already ruling below the cost of production. Prices may also take cues from International Sugar price movement as the exports of further 1 mn tn may be viable only if international market recover. In the long term, price trend would depend on planting figures of 201213 crop and decision with respect to further exports. Also, it is necessary to keep close watch on Brazilian Sugar harvest which would commence by mid April 2012.

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Commodities Daily Report

Wednesday | April 11, 2012

Agricultural Commodities
Oilseeds
NCDEX Soybean futures traded higher (up 2.5% as compared to yesterdays closing) and made all time high on account of firm overseas market in anticipation of USDAs bullish monthly supply & demand report which is scheduled to release on Tuesday evening. Additionally, higher export figures of soymeal as well as total oilmeal as compared to last month. India's soy meal exports, in March 2012 increased by 12.16 per cent to 4,60,464 tonnes from 4,10,537 tonnes during the same period last year. However, the soy meal shipments during the finance year 2011-12 (Apr-Mar) were 38,28,521 tonnes, slightly lower by 0.26 per cent from 38,38,775 tonnes a year ago. Average soy meal price of March was US$ 433/tonnes FOB at domestic ports (1$=50.36). Total oil meal shipments during the finance year 2011-12 (Apr-Mar) were 55,22,312 tonnes (value Rs 6360-.79 Cr), up by 8.88 per cent from 50,71,779 tonnes (value Rs 8219.76 Cr) a year ago. During the FY 2011-12 shipments to Iran, Thailand, Japan, EU and Mozambique (Africa) registered exceptional growth. U.S. soybean exports for 2011/12 are increased 15 million bushels this month to 1.29 billion. U.S. soybean ending stocks are projected at 250 million bushels, down 25 million from last month. Global oilseed production for 2011/12 is projected at 440.6 million tons, down 5.2 million from last month. Brazil soybean production is forecast at 66 million tons, down 2.5 million from last month as warm temperatures.Global oilseed trade for 2011/12 is projected at 106.4 million tons, down 2 million mainly reflecting reduced soybean trade. Lower soybean exports are forecast for Argentina, Brazil, Paraguay, and Uruguay. Global soybean ending stocks are projected at 55.5 million tons, down 1.8 million from last month, and down 13.6 million tons from last year.

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Apr '12 Futures Ref Soyaoil SpotNCDEX(Indore) Ref Soyaoil- NCDEX Apr '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3139 3250 753.2 770.4

as on April 10, 2012 % Change Prev day 0.00 2.46 0.00 0.78 WoW 2.68 4.96 0.32 2.23 MoM 10.57 14.36 3.57 6.59 YoY 33.06 35.44 22.73 23.70

Source: Reuters

as on April 10, 2012 International Prices Soybean- CBOTMay'12 Futures Soybean Oil - CBOTMay'12 Futures Unit USc/ Bushel Last 1424 Prev day -0.12 WoW 0.53 MoM 6.95 YoY 4.07

USc/lbs

56.6

-0.65

1.25

4.91

-3.77

Source: Reuters

Crude Palm Oil

% Change Unit
CPO-Bursa Malaysia Apr'12 Contract CPO-MCX-Apr '11 Futures

as on April 10, 2012

Last 3645 625.7

Prev day 0.80 0.85

WoW 1.82 2.69

MoM 9.30 11.10

YoY 5.50 20.40

MYR/Tonne Rs/10 kg

Rape/mustard Seed: NCDEX May Mustard Seed futures traded

higher (up 1.23%) on back of the lower production estimates of domestic mustard seed. Gains in edible oil and other oilseeds also added bullish market sentiments. As per COOIT, the country's rapeseed output is estimated to drop by 12.6 percent to 6.03 million tonnes in the year to June 2012. The overall rabi (November-March) oilseed crop for 2011-12 is estimated to fall to 8.79 million tonnes from 9.87 million tonnes last year, with a drop in sown area from 9.72 million hectares last year to 9.07 million ha this time. RM Seed meal shipments during the finance year 2011-12 (Apr-Mar) were 1,171,895 tonnes (value Rs. 1028.30 cr), up by 25 per cent from 9,36,238 tonnes (value Rs. 972.73 cr) a year ago. Average RM Seed meal price of March was US$ 200/tonnes FOB at domestic ports (1$=50.36).

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX(Jaipur) RM Seed- NCDEX Apr '12 Futures Rs/100 kgs Rs/100 kgs Last 3840 3954 Prev day 0.23 0.82

as on April 10, 2012 WoW 0.42 0.82 MoM 7.60 7.56

Source: Reuters

YoY 44.91 43.94

Technical Chart Mustard Seed

NCDEX May contract

Refined Soy Oil: NCDEX Soy oil futures traded higher on account
of firm overseas market as higher export figures of Malaysian palm oil during the April 1-10 coupled with lower palm oil stocks in the month of March. Malaysian palm oil products exports for April 1-10 rose 7.8 percent to 478,948 tons from 444,259 tons shipped during March 1-10. As per MPOB report, Malaysian palm oil ending stock for March fell by 5% to 1,959,240 tons from a revised 2,062,065 tons in February. Supply shortage of edible oil which will result expensive imports of edible oil in coming months. Depreciation of INR also [provided support to the prices. Imports would be more expensive due to depreciation of INR against US dollar. India imports about 80 lakh tonnes of edible oil in a year.

Source: Telequote

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

valid for April 11, 2012 Support 773-776 3255-3275 3980-4000 625-627 Resistance 784-787 3345-3365 4065-4081 635-637

Outlook: Oilseed complex are expected trade higher on account of

supply shortage of global oilseeds as well as in the domestic markets. Lower palm oil stocks due to higher export figures and lower US soybean planting intention (USA is a major producer of soybean in the world) are in favour of the bulls.

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Commodities Daily Report

Wednesday | April 11, 2012

Agricultural Commodities
Spices Black Pepper
Black Pepper Spot prices and Futures continued to extend gains of the previous day and settled 1.84% and 1.96% higher respectively on Tuesday. There are reports that production in Vietnam, the largest producer of the spice is expected to be revised to 1.35 lakh tonnes as compared to earlier estimate of 1.10 lakh tonnes. Total Cash margin of 15% on the long side will be imposed on all running contracts and yet to be launched contracts in Pepper from April 03, 2012. For detailed reference please refer to the Circular No: NCDEX/RISK-017/2012/120.

Market Highlights
Unit Rs/qtl Rs/qtl Last 38850 39100 % Change Prev day 1.84 1.96

as on April 10, 2012 WoW -0.71 0.08 MoM -3.19 -2.52 YoY 38.12 35.38

Pepper SpotNCDEX (Kochi) Pepper- NCDEX Apr '12 Futures

Source: Reuters

Technical Chart Black Pepper

NCDEX May contract

Exports
According to Spices Board of India, exports of pepper during April 2011January 2012 rose by 49% and stood at 22,300 tonnes as compared to 14,950 tonnes in corresponding period last year. Month on month rise in the exports of Pepper stood at 12%. According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of black pepper in 2012 are forecasted to fall by 30 percent to around 86,000 tonnes. While exports during January 01, 2012 to February 15, 2012 stood at 6,736 tonnes up 16.3 percent as compared to corresponding period last year. Pepper imports by U.S during April to November 2011 surged marginally by 1.58% to 64,276 tonnes as compared to 63,274 tonnes during the same period in 2010-11. Indonesia remained the major supplier to U.S. in the above mentioned period. 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 2011, Brazil exported 32,676 tonnes of pepper a rise of 6% as compared to 30,786 tonnes in 2010. U.S. remained the major destination of the pepper imports, importing around 12,820 tonnes.
Source: Telequote

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

valid for April 11, 2012 Support 39500-39650 Resistance 40500-40800

Production and Arrivals

Arrivals of pepper in domestic market stood at 4 tonnes while offtakes were 7 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%. Pepper production in Vietnam and Indonesia is projected at 1.10 lakh tonnes while that in Indonesia is projected to be 41 thousand tonnes. (Source:
Financial Express

).

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: Peppertradeboard) On the other hand production of pepper in India in 2011-12 is expected 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
Lower arrivals amidst demand from the local stockists are expected to keep Pepper prices firm in the intraday. However, in the short term sharp upside in the prices is likely to be capped owing to peak arrivals from Vietnam and cheaper Pepper available there.

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Commodities Daily Report

Wednesday | April 11, 2012

Agricultural Commodities
Jeera
Spot prices of jeera remained steady throughout the day and settled 0.48% higher on Tuesday owing to lacklustre trades at the domestic market. While Futures remained bearish in the early part of the day and touched new contract low of Rs.11,860/qtl but bounced back towards the end of the session and settled 1.14% higher yesterday. Carryover stocks of jeera is expected to be around 7-8 lakh bags as compared to 4-5 lakh bags in the last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Apr '12 Futures Rs/qtl Rs/qtl Last 12534 11753 Prev day 0.48 1.14

as on April 10, 2012 % Change WoW 0.85 -1.57 MoM -7.13 -9.21 YoY -16.70 -20.75

Source: Reuters

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 35,000 bags while offtakes remained same at 35,000 bags on Tuesday. Production of jeera in 2011-12 is expected to be around 35 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 during April 2011- January 2012 stood at 34,500 tonnes as compared to 22,450 tonnes in 2010-11, an increase of 54%. However, month on month exports of jeera witnessed a decline of 40%.

Technical Chart Jeera

NCDEX May contract

Outlook
Jeera Futures in the intraday are expected to remain bearish owing to peak arrivals in the domestic market. In the medium to long term (May - June 2012) prices are likely to remain weak owing to bumper production this season. Prices will also take cues from the progress of sowing of jeera in Syria and Turkey, the other major producers of the spice.

Source: Telequote

Market Highlights
Prev day -0.97 1.20

as on April 10, 2012 % Change

Turmeric
Peak arrivals from all the major mandis coupled with lacklustre demand from the domestic buyers led Turmeric Spot prices to remain weak and settled 1.20% lower on Tuesday while Futures after remaining weak witnessed short coverings and settled 1.20% higher yesterday.
Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Apr '12 Futures

Unit Rs/qtl Rs/qtl

Last 3474 3722

WoW -7.66 -6.58

MoM -15.40 -14.08

YoY -61.68 -57.04

Production, Arrivals and Exports

Arrivals in Nizamabad mandi stood at 25,000 bags on Tuesday. According to the market sources harvesting of turmeric in Nizamabad is 75% complete, Erode 60%, Sangli 60% while centres of Duggiralla, Warangal and Cuddapah which started their harvesting late have completed 25% of their harvesting. Average daily fresh arrivals in Nizamabad currently stand around 15000 thousand bags while that in Duggiralla, Warangal and Cuddapah sum to 10000 bags, Sangli 8000 bags and the largest producing state is witnessing arrivals of 24000 bags Turmeric production for the year 2011-12 is projected at historical high of 82 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 201011. Erode is expected to produce 45 lakh bags of turmeric a rise of 29% as compared to previous year. According to Spices Board of India, exports of Turmeric during April 2011- December 2011 stood at 62,000 tonnes as compared to 37,400 tonnes in 2010-11, rise of 66%. Targets set by the Spices Board have already been met till October 2011. Exports have touched new historical levels in 2011-12.

Technical Chart Turmeric

NCDEX May contract

Source: Telequote

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

valid for April 11, 2012 Support 11740-11860 3650-3700 Resistance 12290-12360 3860-3900

Outlook
Turmeric prices in the intraday are likely to witness further selling pressure owing to peak arrivals in the domestic market coupled with fragile demand from the overseas buyers. In the medium to long term (May- June) prices are expected to track demand from the overseas and domestic buyers. If prices fall below 3500/qtl farmers might start hoarding the stocks and may not sell at lower levels, thereby supporting prices to strengthen.

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Commodities Daily Report

Wednesday | April 11, 2012

Agricultural Commodities
Mentha Oil
Mentha Oil witnessed as very volatile session on Tuesday. After falling to a low of 2296 in the Futures, the prices bounced back hitting the 3% circuit breaker towards the end of the trading session. The Spot as well as the Futures settled 0.14% and 2.82% respectively on account of short covering as well as fresh buying seen at lower levels. Total Special Cash margin of 25% on the long side has been imposed on all contracts of Mentha Oil from March 9, 2012. For detailed reference please refer to the Circular No: MCX/T&S/074/2012 dt 06/03/2012.

Market Highlights
Unit Mentha Oil- MCX Spot (Chandausi) Mentha Oil MCX April Futures Rs/qtl Rs/qtl Last 2478 2422 Prev day 0.14 2.82

as on April 10, 2012 % Change WoW -5.67 -2.18 MoM 22.10 19.35 YoY 99.75 95.26

Source: Reuters

Technical Chart Mentha Oil

MCX April contract

Production, Arrivals and Exports

According to market sources, sowing of Mentha in Western UP is expected to increase by 30% as compared to last year, while sowing in all regions is expected to increase by 20% Arrivals in entire UP stand around 130 drums (1drum 180 kgs) daily. 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.

Outlook
Mentha oil prices in the intraday are expected to trade higher in the day.

Source: Telequote

Market Highlights
Prev day 0.77 4.01

as on April 10, 2012 % Change

Potato
Potato Spot as well as Futures witnessed a volatile session recovering from lows, and settled 0.77% and 4.01% higher on Tuesday on account of buying seen at lower levels. Demand can be seen at lower levels as traders anticipate the output to be lower than the governments estimates. As per a circular issued by NCDEX dt April 10, 2012, A Minimum Initial Margin of 10% of the value of the contract or VaR based margin whichever is higher will be imposed on all running contracts and yet to be launched contracts of Potato with effect from beginning of trading day Thursday, April 12, 2012. It is clarified that the Special Margins, Additional Margins or any other margins levied shall be over and above the revised Minimum Initial Margin.
Potato SpotNCDEX (Agra) Potato- NCDEX Apr '12 Futures

Unit Rs/qtl Rs/qtl

Last 897.5 973.5

WoW 5.09 -2.84

MoM #N/A 13.01

YoY 57.22 90.77

Technical Chart Potato

NCDEX April contract

Production Scenario
The cold storages are said to be full to the extent of 95% of their capacity. The markets participants expected the production to cross last years levels, but now they expect the production to fall than last year. According to National Horticultural Research and Development Foundation (NHRDF), Potato output in the season 2011-12, is estimated higher at 43.6 mn tn compared to 40 mn tn last year. However, markets are expecting further decline in output due to late blight disease by 20%. The output in UP and West Bengal, the two biggest potato growing states is expected to be lower at 12.8 mn tn (13.6 mn tn in 2011) and 10-15% (13.3 mn tn in 2011) respectively.

Source: Telequote

Technical Outlook
Unit Mentha Oil Apr Futures Potato NCDEX May Futures Potato MCX May Futures Rs/kg Rs/qtl Rs/qtl

valid for April 11, 2012 Support 2345-2380 990-1000 1085-1095 Resistance 2460-2480 1035-1045 1125-1137

Outlook
Potato prices may trade on a bullish note in the intraday due to buying seen at lower levels. Comfortable supplies in the domestic markets may weigh on the price in the short term. In the medium term, Potato prices may take cues from the final estimates from the horticulture department which may show some downward revision in the output amidst reports of late blight disease.

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