Commodities Daily Report

Tuesday| August 14, 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

Tuesday| August 14, 2012

Agricultural Commodities
News in brief
Rain deficit down to 16%
Following heavy rains in eastern Rajasthan, Gujarat, interior Karnataka and the southern peninsular region during the last week, the deficiency in the southwestern monsoon (June-September) has come down to 16% from 22% a week ago. According to the Met department data, the country has so far received 473 mm of rain against a normal year of 561 mm, a 16% deficiency. The northwestern parts of the country have been the worst affected, with a 30% deficiency. While rain deficiency has declined to 22% in eastern Rajasthan, the western part of the state continues to reel under a dry spell, with a 53% rain deficiency. Punjab and Haryana are the most rain-deficient states at 65% and 68%, respectively. Central Maharashtra is now short of rain by 21%, while the Vidarbha region has received normal rainfall. Marathwada continues to be rain deficient at 37%. (Source: The Financial Express)

Market Highlights (% change)

Last Prev. day

as on Aug 13, 2012

WoW MoM YoY

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

17633 5348 55.34 92.73 1610

0.43 0.52 0.11 -0.15 -0.64

1.27 1.24 -0.32 0.57 -0.20

2.33 2.15 -0.88 7.73 2.86

4.60 5.42 22.42 16.94 -7.49

Source: Reuters

Food Subsidy to Touch Rs. 92493 Crore during Current Financial Year
During the current year 2012-13(BE), against the projected requirement of Rs.92493.00 crore, an amount of Rs.74551.99 crore has been allocated at BE stage. The rise in MSPs may have marginal impact on inflation as the wholesale prices of Wheat and Rice are related to their MSP. This information was given by Prof. K.V. Thomas, Minister for Consumer Affairs Food and Public Distribution System in a written reply in Rajya Sabha today. The Minister stated that MSP for food grains is so determined as to give a remunerative price to the farmer for his produce. The Government has taken up various schemes for increasing production and productivity of food grains. (Source: PIB)

Agri futures fall up to 20% in a week

Prices of agricultural commodities have declined by up to 20 per cent in the past week on stern regulatory measures and a revival in monsoon rainfall in major producing regions. However, weather worries and, consequently, a fear of lower output this kharif season, have kept prices up in spot markets. This steep decline is a breather for many departments of the Union government, as it would bring down inflation pressure. The commodity derivatives market regulator, the Forward Markets Commission (FMC), is feeling vindicated at the result of the actions it took. (Source: Business Standard

Coconut Board for hike in import duty for palm oil

Higher imports of competing edible oils like palm oil and palm kernel oil are depressing the coconut oil market, Coconut Board chairman TK Jose said. The board has requested the Union commerce ministry to hike the import duty of crude palm oil to 10% from nil and appropriate increase in the import duty of refined palm oil from the existing 7.5% to help over 10 million farmers who depend on coconut farming in the nation. With an annual production of 16 billion nuts, India is the second largest producer among the coconut producing countries of the world. As imported edible oils enjoy tariff concession as well as subsidy, their market price at retail level is low which makes a significant dent on the marketability of coconut oil in the various markets in India, board source said.
(Source: Financial Express)

Additional Allocation of Foodgrains to BPL Families

The Government of India has been making additional allocation of foodgrains for the additional Below Poverty Line (BPL) and Antyodaya Anna Yojana (AAY) families in the poorest districts of the country. During the current year 2012-13, on the recommendations of the Committee, the Government has so far allocated 15.80 lakh tons of foodgrains for additional AAY and BPL families in the poorest districts. This information was given by Prof. K.V. Thomas, Minister for Consumer Affairs Food and Public Distribution System in a written reply in Rajya Sabha today. The Minister further added that considering the availability of surplus stocks in the Central Pool and to augment supply of foodgrains to check open market prices, Government has allocated 50 lakh tons of foodgrains to all States/Union Territories (UTs) for BPL families. During the current year 2012-13, 50 lakh tons of foodgrains have been allocated to the States/UTs for distribution to the additional BPL families at BPL prices upto March, 2013. (Source: PIB)

Potato, onion, brinjal & cabbage add to rising vegetable WPI

The Wholesale Price Index (WPI) for vegetables showed a rise of 8.8 per cent in June this year compared to May 2012 on account of rise in prices of potato, onion, brinjal and cabbage. In a written reply to the Rajya Sabha today, Food Minister K V Thomas said the rate of inflation for vegetables, however declined marginally to 48.44 per cent in June 2012 compared to 49.43 per cent in May this year. The rate of inflation for primary food articles based on WPI increased from 7.64 per cent in June 2011 to 10.81 per cent in June 2012. This increase is mainly due to items such as gram, vegetables, egg, meat and fish, Thomas added. However, the rate of inflation for manufactured food articles such as sugar and edible oils came down during the same period, he said. (Source: PTI)

Supply of Subsidised Wheat to Flour Millers

The Government released wheat for bulk sale under Open Market Sale Scheme (OMSS) with an objective to offload part of surplus stocks in the Central Pool and to make available wheat in the open market to stabilize wheat prices particularly during lean season, the Government accordingly decided to sell 3 million tonnes of wheat to Bulk Users/ Roller Flour Millers/ Traders through open tenders by Food Corporation of India upto March, 2013 for domestic consumption under the Scheme. 13.02 lakh tonnes wheat was allocated for sale in the States/UTs during the period from July, 2012- September, 2012. (Source: PIB)

Cardamom loses flavour as demand weakens

The cardamom market, after remaining buoyant for sometime, lost flavour last week on slack demand at auctions held in Kerala and Tamil Nadu. Lack of movement of cardamom, of late, gives an impression that the stocks held by all in the major marketing centres in the country, and even those held in the primary markets, have not been exhausted. Hence, fresh buying hasn't picked up as expected. Besides, cross-border trade has come to a grinding halt following closing of the borders as a security measure in view of the Independence Day. Export buying was also very negligible. There is not much buying for Ramzan this year and it shows that overseas dealers too are holding stocks. A ban pan masala has also affected the offtake of inferior grade cardamom estimated at around 2,000 tonnes a year, a trader said. (Source: Business Line)

$40.5b target set for textile export

The Textiles Ministry has fixed an export target of $40.5 billion for this fiscal, an increase of about 22% over 2011-12. Exports target for 201213 was initially fixed at $38.31 billion and has since been revised to $40.5 billion following the Foreign Trade Policy Supplement, Minister of state for Textile Panabaaka Lakshmi said in a written reply to the Lok Sabha on Monday. She also said that there is no report of job loss in the industry due to the slowdown. (Source: Business Line)

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Commodities Daily Report

Tuesday| August 14, 2012

Agricultural Commodities
Chana
Chana September futures which remained positive throughout the trading session on Monday settled marginally lower on fears government might take action and may impose stock limits to curb the rising prices The spot settled 0.24% higher while the August futures settled 0.06% lower w-o-w. As per the latest report form IMD, monsoon till 11 August 2012 were 16% below normal with Rajasthan, Gujarat, Punjab and Haryana affecting the most. This has led to concerns over kharif pulses output as Rajasthan accounts for 25% of the kharif pulses production. Also, poor rains would impact Rabi chana sowing where Rajasthan contributes around 12-13% in total chana output. The Cabinet Committee on Economic Affairs yesterday 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.
th

Market Highlights
Unit Rs/qtl Rs/qtl Last 4926 4806 Prev day 0.24 -0.06

as on Aug 13, 2012 % change WoW MoM -0.49 2.34 1.71 3.16 YoY 49.98 44.85

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

Source: Reuters

Technical Chart - Chana

NCDEX Sept contract

Sowing progress and demand supply fundamentals

According to the Ministry of Agriculture 74.48 Lakh hectare area has th been planted under Kharif pulses as on 9 August, 2012 compared to 89.34 lakh hectare (ha) same period last year, a decline of 16.63% . Sowing is reported lower mainly in Rajasthan. Rajasthan Agriculture Department states that planted area under Kharif Pulses is down at 9.51 lakh hectares ha compared to 23.01 lakh ha same th period last year. (Dated 9 August, 2012). Acreage may remain lower on account of scanty rains. In Maharashtra, Kharif Pulses sowing is down by 6.3% at 18.63 lakh hectares. While in AP it is up by 7.4% at 5.7 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 14, 2012 Support 4780-4835 Resistance 4935-4965

Outlook
Chana prices may witness further correction on reports of rains in Rajasthan. Tight supplies as well as strong demand amid festive season may lend support to the prices and thus downside may be limited. 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

Tuesday| August 14, 2012

Agricultural Commodities
Sugar
Sugar prices settled lower as ISMA has pegged sugar output estimates at 25 mn tn. The Spot settled 1.49% lower while the Futures settled 0.11% higher on Monday. 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 June and 2.66 lakh ton in July the total 51.66 lakh ton non-levy sugar will be available. According to a circular issued by FMC 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 Sugar with effect from beginning of trading day Monday, Aug 06, 2012. In the international markets Liffe white sugar as well as ICE raw sugar settled 0.78% and 1.69% lower Monday.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Aug '12 Futures Rs/qtl Last 3743

as on Aug 13, 2012 % Change Prev. day WoW -1.49 -5.10 MoM 8.66 YoY 23.82

Rs/qtl

3536

0.11

0.60

8.80

28.54

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 574 453.11

as on Aug 13, 2012 % Change Prev day WoW -0.78 -1.69 -5.55 -6.60 MoM -12.79 -10.88 YoY -23.29 -27.28

Source: Reuters

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 tonnes, domestic Sugar supplies are estimated at 32mn tn against the domestic consumption of around 22.523 mln tn for 2012-13 season. Thus, no curbs on exports are seen as of now.
th

Technical Chart - Sugar

NCDEX Sept contract

Source: Telequote

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 million tonnes -- 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).

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

valid for Aug 14, 2012 Support 3425-3448 Resistance 3505-3525

Outlook
Sugar prices are expected to trade on sideways to positive note in the intraday. Festive season demand and comparatively lower supplies may support the prices. However, any action by the government to control the rising prices may lead to a correction in the prices. Long term outlook for sugar would depend on the monsoon in the month of current and the September month and thereby output estimates for next season that will begin in October.

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Commodities Daily Report

Tuesday| August 14, 2012

Agricultural Commodities
Oilseeds Soybean: Soybean futures declined on account of higher soybean
acreage in India and weak international markets. The Spot as well as the Futures settled 1.39% and 1.02% lower on Monday. 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 international markets CBOT Soybean traded on a weak note on expected decline in the Chinese import at such high prices. USDA released its monthly crop report wherein its cut U.S. 2012/13 soybean production forecast to 2.692 billion bushels, from 3.05 billion in July. According to the USDA Weekly crop progress report, the condition of Soybean has improved to 30% Good to Excellent from 29% a week ago. CBOT Soybean settled 3.14% lower on Monday. th In the domestic markets, as on 9 August Oilseeds have been sown in 151.82 lakh hectares so far, compared with 157.9 lakh hectares same period last year. Soybean area is higher at 103.2 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. Indian acreage may touch record high levels this year as farmers have opted for this remunerative crop across India.

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Aug'12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soyoil- NCDEX Aug '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 4533 4566 776.3 778.1

as on Aug 13, 2012 % Change Prev day -1.39 -1.02 -0.12 0.25 WoW 0.29 0.36 -0.14 -0.13 MoM -1.86 -1.22 -1.20 -1.37 YoY 91.83 92.50 18.10 18.94

Source: Reuters

as on Aug 13, 2012 International Prices Soybean- CBOTAug'12 Futures Soybean Oil - CBOTAug'12 Futures Unit USc/ Bushel USc/lbs Last 1656 52.95 Prev day -3.14 -1.21 WoW 3.03 2.86 MoM 1.83 -2.22
Source: Reuters

YoY 20.06 -7.59

Crude Palm Oil

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

as on Aug 13, 2012

Refined Soy Oil: NCDEX Soy Oil September futures and MCX CPO
settled lower on Monday due to higher stocks in Malaysia. Malaysia's July palm oil stocks rose 17.6 percent to 1,998,870 tn from a revised 1,699,117 tn in June. 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. Indonesia, the world's top palm oil producer, has lowered its earlier output forecast by 8 percent to 23.6 million tonnes this year India imported 124,125 tonnes of refined palm oil in June, down nearly 25 percent from May. Total vegetable oil imports in June were 783,315 tonnes, down 12.7 percent from 896,921 tonnes in the previous month, the data from the Solvent Extractors' Association (SEA) showed.
Last 2817 552.8 MYR/Tonne Rs/10 kg

Prev day -0.46 -0.49

WoW -2.46 -2.04

MoM -6.01 -1.85

YoY -17.15 13.60

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Aug '12 Futures Rs/100 kgs Rs/100 kgs Last 4265 4336 Prev day -0.23 0.21

as on Aug 13, 2012 WoW -1.10 -0.57 MoM 1.07 2.99

Source: Reuters

YoY 44.09 49.83

Rape/mustard Seed: NCDEX September mustard seed prices

increased marginally while spot settled lower by 0.23%. 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.

Technical Chart Soybean

NCDEX Oct contract

Outlook
Soybean prices may trade sideways in the intraday. Downside pressure may persist on account of higher area under cultivation and expected higher yield of soybean due to good rains in MP. Nevertheless, sentiment remains cautious on possibility of an El Nino returning to Southeast Asia 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 14, 2012 Support 779-783 3862-3920 4320-4345 541-546 Resistance 792-796 3990-4040 4400-4430 554-560

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Commodities Daily Report

Tuesday| August 14, 2012

Agricultural Commodities
Black Pepper
Pepper Futures traded on a positive yesterday due to dwindling stocks in the domestic markets, which lent support to the prices at lower levels. in the spot markets, the arrivals were higher ahead of Onam and Eid. However, the higher offtakes were met by good demand. The Spot as well as the Futures settled 0.46% and 0.78% higher on Monday. 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 $8,300/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
% Change Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Aug '12 Futures Rs/qtl Rs/qtl Last 43129 45605 Prev day 0.46 0.78

as on Aug 13, 2012 WoW 1.15 4.61 MoM 2.80 7.09 YoY 33.88 37.57

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 14, 2012 Support 43600-43900 Resistance 44450-44680

Production and Arrivals

Arrivals of pepper in domestic market stood at 65 tonnes while offtakes were 60 tonnes on Monday. 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 trade on a positive note due to good demand ahead of the festive season. Also, lower inventories may support prices at lower levels. On the other hand reports of fresh arrivals from the Indonesia and Malaysia might cap sharp gains in the short term.

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Commodities Daily Report

Tuesday| August 14, 2012

Agricultural Commodities
Jeera
Jeera Futures corrected yesterday due to rains in and around Unjha. Due to this, the farmers expect that the soil will have good moisture ahead of sowing of Jeera crop. The spot prices also witnessed a downside movement as export demand reduced due to very high prices. Farmers are not selling their stocks anticipating better prices. Supply concerns from Syria and Turkey still exists. The spot as well as the Futures settled 0.92% and 1.65% lower on Monday. 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. Export demand from Bangladesh, Pakistan and other countries may support the prices at lower levels. Production in Syria and Turkey is being reported around 1,000 tonnes and around 5,000 tonnes, lesser than expectations. Jeera prices in the international market of Indian origin are being offered at $2,9503,000/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
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Aug '12 Futures Rs/qtl Rs/qtl Last 16145 15360 Prev day -0.92 -1.65

as on Aug 13, 2012 % Change WoW -2.15 -6.37 MoM 3.52 0.92 YoY 4.16 0.42

Source: Reuters

Technical Chart Jeera

NCDEX Sept contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 2,500 bags, 1,500 bags lower compared to previous day while off-takes stood at 2,500 bags on Monday. 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

Market Highlights
Prev day -0.08 0.00

as on Aug 13, 2012 % Change

Outlook
Jeera prices are expected to trade sideways today. However, the prices may recover due to lower arrivals at lower prices. 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.
Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Aug '12 Futures Rs/qtl Rs/qtl Last 5476 5518

WoW -5.19 -9.63

MoM 15.58 10.32

YoY -13.08 -4.86

Turmeric
Turmeric prices bounced back yesterday and hit the 4% upper circuit in the September contract after corrected sharply over the last few days. The spot remained flat due to lack of orders from north India. Rainfall in Nizamabad is 24% lower than the normal as on 1/8/2012. th Turmeric has been sown in 0.44 lakh hectares in A.P as on 8 August 2012. The Spot settled lower by 0.08% while the Futures settled 4% higher (September) on Monday. 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 8,000 and 2,000 bags respectively on Monday. 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 14, 2012 Support 15600-15730 5730-5810 Resistance 16060-16220 5985-6050

Outlook
Turmeric prices are expected to continue to trade sideways. Reports of export demand from Pakistan may support the prices at lower levels. In the medium to long term (Aug to September) prices may take cues from the sowing figures.

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Commodities Daily Report

Tuesday| August 14, 2012

Agricultural Commodities
Mentha Oil
Mentha oil Futures recovered yesterday after correcting sharply over the last two days due to buying by stockists emerging at lower levels. Gutkha ban led to lower demand in the domestic markets over the last couple of days. The spot as well as the Futures settled 0.26% and 2.86% higher on Monday. 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
Unit Mentha Oil- MCX Spot (Chandausi) Mentha Oil MCX July Futures Rs/qtl Rs/qtl Last 1528 1349 Prev day 0.26 2.86

as on Aug 13, 2012 % Change WoW -0.71 -2.90 MoM 2.54 -1.17 YoY 22.73 8.30

Source: Reuters

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.

Technical Chart Mentha Oil

MCX Aug contract

Outlook
In the intraday trading session Mentha oil is expected to trade sideways. Lower export demand may pressurize prices. 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

Market Highlights
Prev day 0.00 0.00

as on Aug 13, 2012 % Change

Potato
Potato September futures closed 0.21% down owing to weak demand coupled with fears that regulator might impose some strict measures to control the rising prices. 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.
Unit Potato SpotNCDEX (Agra) Potato- NCDEX Aug '12 Futures Rs/qtl Rs/qtl Last 1170 1177

WoW -1.71 -0.35

MoM 6.96 3.45

YoY 176.63 207.23

Technical Chart Potato

NCDEX Sept contract

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.

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 14, 2012 Support 1320-1330 1152-1165 1195-1210 Resistance 1365-1382 1194-1208 1240-1255

Outlook
Potato futures in intraday may correct further on account of weak demand at higher levels, also the participants fear that the government may take some measures to curb the rising prices. Upcoming festive season might provide support to the prices in Medium term.

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