Commodities Daily Report

Monday| August 27, 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

Monday| August 27, 2012

Agricultural Commodities
News in brief
Rains pound north India, peninsular interior
The vigorous spell of monsoon continued over southwest Andhra Pradesh and adjoining south interior Karnataka in peninsular interior. Less-intense (active) monsoon was on view over coastal and north interior Karnataka, Kerala, Telangana and coastal Andhra Pradesh during the 24 hours ending Sunday morning. In the north, a fresh spell of rains has broken out over Haryana, Chandigarh, Delhi, and Himachal Pradesh. Towards the east, it covered east Madhya Pradesh, Chhattisgarh and Odisha. The overall rain deficit stayed at 14 per cent as on Saturday evening, with the promise of even more rains over the next few days in various parts. The latest low-pressure area persisting over northwest Bay of Bengal is responsible for the current spell of the monsoon. A series of typhoons (cyclones) in the northwest Pacific/South China Sea too has helped sustain the monsoon flows when it was needed most. Typhoons Bolaven and Tembin are the latest ones. It is unusual for strong more than one typhoon to operate in an ocean basin, which goes to signal the exceptional circumstances under which the late monsoon surge has prospered. (Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Aug 24, 2012

WoW MoM YoY

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

17783 5387 55.49 96.15 1669.8

-0.38 -0.53 0.42 -0.12 0.01

0.71 0.44 -0.23 0.58 3.32

5.37 5.25 -0.77 9.09 5.88

10.17 11.17 21.32 16.72 -8.20

Source: Reuters

West Bengal to allow inter-state transfer of potato after October

The West Bengal government has decided to curb its decision to restrict inter-state transfer of potato after October. The new harvest starts coming into the market from November. Senior officials said this advisory to restrict sale of potato outside West Bengal has been issued to cold storages in the state to tackle the shortage of potato in the local market since the state crop has not been very good. They added that it is not a ban but an advisory which was issued for an indefinite period to members of cold storages urging them to first supply to the local markets and then consider supplying outside the state. Meanwhile, the current report of the National Horticultural Research and Development Foundation (NHRDF) stated that about 35 per cent of stored stocks of potato from cold storages have been supplied in different markets of the country. The balance quantity is sufficient to meet the coming months requirements. market sources said the price may only rise another Rs 4-6 a kg and then remain range-bound, due to consumer buying resistance and decisions to curb use. Official sources said states have been asked to step up anti-hoarding mechanisms to unlock the stored potato.
(Source: Business Standard)

El Nino effect recedes, Sept rains to be better

With chances of El Nino weather pattern receding, the Agriculture Ministry hopes that rainfall in September would be better than earlier forecast, helping in bridging the shortfalls in sowing area to some extent. Early this month, India Meteorological Department, (IMD), had pegged below normal monsoon in September due to likely warming of the Pacific Ocean, popularly known as the El Nino phenomenon. According to IMDs latest update to us, there will not be El Nino effect on monsoon as chances of its occurrence is receding. Temperature in Pacific Ocean is okay and in September, rainfall is expected to be better than the IMD forecast, Agriculture Secretary Ashish Bahuguna told PTI. Monsoon in the country is deficient by 14 per cent so far, which has affected sowing operations, particularly in four states -Karnataka, Maharashtra, Rajasthan and Gujarat. (Source: Business Line)

Urea imports on rise even as India cuts oil inflow from sanctiontorn country
India continues to significantly increase its urea import from Iran, while state-owned Indian oil companies gradually cut down their oil purchase from the sanctions-hit nation that is being penalized by the US and the EU for its nuclear enrichment programme. According to official data, Indias urea import from Iran jumped around 80% to 19.97 lakh million tonne (LMT) in 2011-12 from the 11.13 LMT purchased in 2010-11. In the current financial year till July-end, India imported 3.24 LMT from Iran and is projected to buy more quantity from the country than the last year. Last year, India imported a total of 78.34 LMT of urea from 15 countries. Iran was the second largest exporter of the fertilizer to India after Oman (24.16 LMT) India produces about 22 million tonne of urea and consumes more than 30 million tonne. In 2010, the government increased the retail price of urea by 10% to R5,310 per tonne, which is still the current retail price. Now, India imports urea at nearly five times the administered retail price. (Source: Business Satndard)

Farm loan target fixed at Rs 5.75 lakh crore: P Chidambaram

Disbursal of agricultural loans has been on the rise under the UPA regime and the target for this fiscal has been fixed at Rs 5.75 lakh crore, an increase of Rs 1,00,000 crore over the previous year, Union Finance Minister P Chidambaram said today. He said the bankers, during his recent interaction with him soon after he assumed office as Finance Minister, assured him of disbursing Rs six lakh crore agricultural loans this year. Chidambaram appealed to the villagers gathered at the function to learn one non-farming activity apart from farming. Chidambaram also expressed concern that the ground water level was depleting these days due to climate change and a farmer was forced to dig 500 metres or even 1000 metres depth for water for irrigation. Observing that agriculture had become a 'difficult' business, he said a country like India cannot expect to import essential food grains. 'We need to produce food grains on our own for a country like ours instead of depending on imports (of food grains),' he said. (Source: Economic Times)

Indian Sugar Production Figure Reached At Agriwatch Estimation Figure In 2011-12

Indian sugar mills produced 25.9 million tons of sugar in the MY 2011-12 till 31st July 2012. Still 25 southern sugar mills are running their cane crushing operations which might take sugar production figure more than 26 million tons. It is noticeable that Agriwatch has estimated 25.9 million tons of sugar production for 2011-12 year in November which has now achieved. (Source: Agriwatch)

Refiners to pay less for palm in Malaysia's top producing state

Refiners in Malaysia's top oil palm growing state of Sabah will pay millers less for edible oil from next month to preserve margins and better compete with Indonesia, the Business Times reported on Monday, in a move likely to hit planters' revenues. The daily newspaper cited IJM Plantations IJMP.KL CEO Joseph Tek as saying that refiners in the Borneo island state want to more than double the discount on a tonne of crude palm oil to 80-100 ringgit from 40 ringgit ($12.90). The move is a reaction to top producer Indonesia slashing export taxes on processed palm last year to jump start its refining industry, allowing Malaysia's long-time competitor to offer cheaper shipments and grab market share.
(Source: Reuters)

World Cotton Demand Forecast Down by 3 percent for 2011-12

China, world largest consumer of cotton has reduced its demand, which would flood cotton in the market. Global demand forecast is down by 3 percent to 22.2 million tonnes for 2011-12. Also, world surplus would increase to 3.05 million tonnes. (Source: Agriwatch)

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Commodities Daily Report

Monday| August 27, 2012

Agricultural Commodities
Chana
Chana Futures corrected last week due to sluggish demand from millers. Improving rains in the kharif pulses states have also pressurized prices at higher levels. Fears the government may take certain measures to curb rising prices also led to the correction. The Spot as well as the Futures settled 1.41% and 3.93% lower w-o-w. As per the IMD, Monsoon has recovered in the month of August, with rains in the last 2 weeks being only 2% below LPA. This has aided sowing in the last one week. Also this may prove beneficial for the chana sowing. However, overall weak rainfall would have a significant impact on yield of kharif pulses. 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 4855 4746 Prev day -0.29 -0.67

as on Aug 25, 2012 % change WoW MoM -1.41 3.03 -3.93 3.20 YoY 37.55 37.57

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 88.3 Lakh hectare area has been th planted under Kharif pulses as on 24 August, 2012 compared to 99.78 lakh hectare (ha) same period last year. 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. Assocham estimates, 21 mn tn of pulses demand in 2012-13 and is likely to reach at 21.42 mn tn in 2013-14 and 21.91 MT in 2014-15. (Source: Agriwatch) 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 27, 2012 Support 4670-4715 Resistance 4780-4825

Outlook
Chana futures may remain sideways as supply shortage may be over shadowed by improved rains in the last 2 weeks. However, spot prices may remain firm amid good demand ahead of festive season. 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

Monday| August 27, 2012

Agricultural Commodities
Sugar
Sugar spot traded higher last week due to good demand ahead of the festive season. However, the Futures traded on a negative note due to weak international prices. Lack of fresh fundamentals also failed to trigger the prices. Mixed views on next years output is keeping market cautious. The Spot settled 2.18% higher whiles the Futures settled 1.55% lower w-o-w. Reports that 25 mn tn of the cane is diverted towards fodder so far in the drought hit districts of Maharashtra have raised concerns over sugar output in Maharashtra. 25mn tn cane diversion would result into 3 mn tn drop in sugar output. However, Industry body ISMA 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 2.5-3 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 ICE sugar closed marginally low by 0.05% and Liffe Sugar closed up by 0.42% on short coverings. Raw sugar futures on ICE hovered around an 11-week low on Friday, as Brazil's cane harvest accelerated, making up for some of the time lost due to wet weather.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Sept '12 Futures Rs/qtl Last 3750

as on Aug 25, 2012 % Change Prev. day WoW 1.35 2.18 MoM 5.50 YoY 26.41

Rs/qtl

3420

-0.38

-1.55

1.21

24.27

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 549.4 435.11

as on Aug 24, 2012 % Change Prev day WoW 0.42 -0.05 -1.81 -2.97 MoM -13.89 -16.93 YoY -29.02 -33.90

Source: Reuters

Technical Chart - Sugar

NCDEX Sept contract

Domestic Production and Exports

The area under sugarcane is estimated at 52.88 lakh ha for 2012-13 crop season, up from 50.63 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.
Source: Telequote

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

valid for Aug 27, 2012 Support 3375-3395 Resistance 3442-3465

Global Sugar Updates

Brazilian cane mills produced 3 mn tn of sugar in the first half of August thanks to dry weather. Unica in its latest report stated said that total sugar output since the start of the crushing season is still down 12 percent from the same period a year ago. Brazil exported 2.489 million tons of sugar, raw value, up from 1.692 million tons in June but lower from 3.06 million tons sugar exported last year same period. 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).

Outlook
Sugar futures may trade sideways. However, concerns over sugar output in the second largest producing state Maharashtra amid scanty rains that would hit yield and more cane conversion towards fodder may support prices at lower levels. Sharp gains may be capped as supplies are sufficient in the near term to meet the festive season demand.

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Commodities Daily Report

Monday| August 27, 2012

Agricultural Commodities
Oilseeds Soybean:
Soybean Spot as well as Futures remained firm last week on account of supply tightness in the domestic as well as global markets till the arrival of fresh crop in mid September. The Spot as well as the Futures settled 2.02% and 1.52% higher respectively w-o-w. CBOT Soybean settled higher by 0.59% on Friday on account of emerging demand in the international front. Markets had a strong (monthly U.S.) crush report and another strong week of export sales last week has provided support to soybean prices in the last few days. Farm newsletter Pro Farmer estimated drought-stricken U.S. soybean production would be worse than forecasts by the USDA. 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. th In the domestic markets, as on 24 August Oilseeds have been sown in 164.29 lakh hectares so far, compared with 169.94 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. Refined Soy Oil: NCDEX Soy Oil & MCX CPO traded on a positive note last week taking cues from BMD Palm oil. Malaysian crude palm oil futures edged higher on Friday, rising 3.6 percent in a second straight weekly gain as global oilseed supply fears and rising export demand supported prices. As per Intertek Testing Services, Malaysian palm oil products exports for 1-20 Aug rose 6 percent to 809,814 tons from 764,273 tons shipped during 1-20 July. 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 Rape/mustard Seed: Mustard seed settled 2.09% higher w-o-w on account of weak fundamentals of this oil crop. Mustard output this season has declined significantly and deficient rains in Rajasthan would not provide proper moisture for mustard sowing next season. 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.

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 4589 3998 792.8 805.5 Prev day 0.24 -0.72 0.00 -0.36

as on Aug 25, 2012

WoW 2.02 1.52 1.62 2.14

MoM -0.07 -10.65 1.90 3.42

YoY 95.61 70.14 18.60 20.67

Source: Reuters

as on Aug 24, 2012 International Prices Soybean- CBOTSept'12 Futures Soybean Oil - CBOTSept '12 Futures Unit USc/ Bushel USc/lbs Last 1737.5 56.24 Prev day 0.59 0.21 WoW 3.98 5.89 MoM 2.55 7.66
Source: Reuters

YoY 22.81 -0.64

Crude Palm Oil

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

as on Aug 25, 2012

Last 3030 563.7

Prev day 0.43 -0.04

WoW 8.29 1.73

MoM 2.30 -0.28

YoY -10.88 12.63

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 4410 4493 Prev day 3.69 0.49

as on Aug 25, 2012 WoW 1.82 2.09 MoM 4.72 4.78

Source: Reuters

YoY 51.01 57.32

Technical Chart Soybean

NCDEX Oct contract

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 27, 2012 Support 797-802.50 3925-3965 4440-4465 562-565 Resistance 810-813 4035-4075 4538-4565 572-575

Outlook
Oilseed may trade sideways with a positive bias tracking the international prices. Sentiment remains cautious on possibility of an El Nino returning to Southeast Asia that could hamper output in top producers Indonesia and Malaysia.

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Commodities Daily Report

Monday| August 27, 2012

Agricultural Commodities
Black Pepper
Pepper Futures recovered on Saturday due to short covering towards the end of the week. Tight supplies in the domestic markets also supported the prices at lower levels. However, prices traded on a positive note over the week due to lower demand for Indian pepper in the international markets due to huge price parity. Prices also corrected due to good rainfall in Pepper growing regions in Kerala and Karnataka in the last few days. Good supplies from Indonesia have also pressurized the prices. The Spot as well as the Futures settled 1.83% and 1.68% lower w-o-w. 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 $8,0008,100/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 Sept '12 Futures Rs/qtl Rs/qtl Last 41063 41620 Prev day 0.63 0.65

as on Aug 25, 2012 WoW -1.83 -1.68 MoM -4.36 -6.85 YoY 23.27 20.87

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 27, 2012 Support 41000-41320 Resistance 41850-42050

Production and Arrivals

There were no arrivals of pepper in domestic market and no subsequent offtakes reported on Saturday. 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 are expected to trade sideways today. Lack of supplies may support prices at lower levels. However, prices may correct due to lower demand at higher levels in the domestic as well as international markets.

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Commodities Daily Report

Monday| August 27, 2012

Agricultural Commodities
Jeera
Jeera Futures corrected sharply last week due to good rains in northern part of Gujarat, the main Jeera growing region. Good rains are expected improve moisture levels which may increase prospects of better yield next season. Exporters are also avoiding buying at higher levels. However, Supply concerns from Syria and Turkey still exists. The Spot as well as the Futures settled 1.98% and 7.05% lower w-o-w. 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 $2,950 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 Sept '12 Futures Rs/qtl Rs/qtl Last 16014 15068 Prev day -0.38 -2.98

as on Aug 25, 2012 % Change WoW -1.98 -7.05 MoM 0.11 -1.90 YoY 3.84 0.30

Source: Reuters

Technical Chart Jeera

NCDEX Sept contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 4,000 bags, while off-takes stood at 4,000 bags on Saturday. 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 correct further today. Good rains in Gujarat may pressurize the prices. However, revival of export demand at lower levels may 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 0.00 0.89

as on Aug 25, 2012 % Change

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

Last 5417 5896

WoW -0.56 -1.67

MoM 3.76 3.40

YoY -3.23 31.37

Turmeric
Turmeric Futures corrected last week due to improving weather conditions in Andhra Pradesh and Tamil Nadu. Also, there are sufficient stocks with the farmers/stockists. The districts of Krishna, Nizamabad, Guntur, Kadapa, and Chittoor received good rainfall during the week. Turmeric has been sown in 0.49 lakh hectares in A.P th as on 22 August 2012. The Spot as well as the Futures settled 0.56% and 1.67% lower respectively w-o-w. 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 5,000 bags and 1,500 bags respectively on Friday. 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 27, 2012 Support 14600-14840 5720-5800 Resistance 15200-15430 5950-6020

Outlook
Turmeric prices are expected to continue to trade sideways in the intraday due to improving weather conditions in turmeric growing regions. However, lower sowing figures as well as 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 term (Aug to September) prices may take cues from the sowing figures.

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Commodities Daily Report

Monday| August 27, 2012

Agricultural Commodities
Mentha Oil
Mentha oil prices traded sideways to positive last week due to reducing arrivals after the peak arrivals period. However lower demand due to ban on Gutkha and Pan Masala have restricted sharp gains. The spot as well as the Futures settled 0.39% and 1.85% higher w-o-w. 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 Aug Futures Rs/qtl Rs/qtl Last 1519 1322 Prev day -0.26 0.02

as on Aug 25, 2012 % Change WoW 0.39 1.85 MoM 3.42 0.88 YoY 21.10 4.06

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 around 50,000 tonnes. Arrivals of the fresh crop are going on in the mandis and currently stand around 500 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 Sep contract

Outlook
In the intraday trading session Mentha oil is expected to trade sideways in the intraday. Buying at lower levels may emerge from stockists anticipating good demand from pharmaceutical companies in the coming days. However, lower demand due to ban on Gutkha and Pan Masala may cap any sharp upside. 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 0.39 -0.73

as on Aug 25, 2012 % Change

Potato
Potato futures extended further losses and closed down by 0.73% due to lack of buying interest in the domestic market. 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 Sept '12 Futures Rs/qtl Rs/qtl Last 1154 1127

WoW -0.65 -2.30

MoM -1.76 -11.50

YoY 180.25 233.08

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 27, 2012 Support 1290-1308 1105-1116 1155-1168 Resistance 1338-1355 1135-1148 1195-1210

Outlook
Potato futures in intraday might trade sideways to down as West Bengal government has decided to curb its decision to restrict interstate transfer of potato after October that might provide resistance to the prices in short term. Though Upcoming festive season might provide support to the prices from falling sharply in Medium term.

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