Commodities Daily Report

Wednesday| March 20, 2013

Agricultural Commodities

Content
News & Market Highlights Chana Sugar Oilseed Complex Spices Complex Kapas/Cotton

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

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Commodities Daily Report

Wednesday| March 20, 2013

Agricultural Commodities
News in brief
Cabinet clears revised food Bill
The Union Cabinet today cleared the revised and much- discussed National Food Security Bill (NFSB), paving the way for its introduction in the ongoing Budget session of Parliament. If enacted, this would provide alegal entitlement for cheap grain to about two- thirds of Indias population, at five kg monthly for each person. Rice will be provided at a uniform Rs. 3 a kg (market price over Rs. 20 a kg), wheat at Rs. 2 a kg (market price Rs. 16 a kg) and coarse cereals at Re 1 a kg. Existing benefits under the Antyodaya Anna Yojana (AAY), which targets the poorest among the poor, would remain as these are. In the original Bill, introduced in the Lok Sabha in December 2011, the Centre had proposed seven kg of rice or wheat or millets a month for the priority category at Rs. 3, Rs. 2 and Rs. 1 a kg, respectively. And, three kg for each person a month for general category households, at 50 per cent of the support price. Separately, the Cabinet Committee on Economic Affairs decided, said officials, to defer a decision on doing away with the levy sugar mechanism. This is expected to be on the agenda of its next meeting.
(Source: Business Standard)

Market Highlights (% change)

Last Prev. day

as on March 19, 2013

WoW MoM YoY

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

19008 5746 54.5 92.16 1611

-1.48 -1.53 0.78 -1.69 0.42

-2.85 -2.84 0.65 -0.41 1.24

-2.36 -2.40 0.32 -3.86 0.16

10.04 9.30 8.62 -14.74 -3.34

.Source: Reuters

UP sugar millers seek help to battle price hikes, dues

The sugar industry in Uttar Pradesh, the largest agro-based industry in the state, is in a deep crisis. Having failed to get any positive response from the state government despite repeated pleas, the beleaguered industry has issued an appeal in the national as well as local media pleading for relief, both from the centre and the state government. The industry, which has outstanding cane dues to the tune of almost Rs. 5,162.86 crore with farmers, has sought help from the Centre, state governments and cooperation of sugar farmers. It has become a norm for the UP government to announce a higher-than-expected floor price for procuring sugarcane from farmers. In fact, during the last three years, there has been a whopping 60% hike in sugarcane prices from Rs. 165/quintal in the 2009-10 season to Rs. 280/quintal in the 2012-13 season. The sugar mills in the state are not in a position to handle this unwarranted hike. Whats worse is that the government has made it mandatory that mills pay at least 85% of the cane dues or else their sugar stocks will be seized. (Source: Financial Express)

Potato prices rise on high demand from bulk consumers

The potato price hit the upper circuit for a third day today due to rising demand from bulk consumers, and a possible threat of a decline in yield this year on an adverse climate during the harvesting season. The essential commodity for the near- month delivery on the Multi Commodity Exchange (MCX) shot up four per cent today to close at 919.30 a quintal. Potato is up 22 per cent so far this month. Harvesting is currently in full swing, with around 30 per cent of Indias crop taken out of the field. Bulk consumers have started storing good quality potato for use through the year. Generally, bulk consumers, including chips manufacturers, corner the early harvest crop to store in their temperature maintained warehouses resulting in a sudden spurt in its demand. (Source: Business Standard)

Egypt in talks to import wheat from India

India may find a buyer for its burgeoning stock of wheat in Egypt, the worlds largest organised importer of the commodity. The African nation is actively considering wheat imports from India and is also changing its food safety rules that could facilitate imports of agriculture produce, Osama Saleh, Minister of Investment, Egypt, said in an exclusive interaction with Business Line. Yes, we are definitely looking at India as an importing country for wheat. We want to have several diversified sources and not just the EU or the US or Canada, Saleh said. The Minister is in India with a trade and investment delegation to attend the African ministers conclave. Senior officials from the Commerce Department have already had consultations with the Egyptian Agriculture Minister Salah Mohamed Abdel Moamen and Supply Minister Bassem Ouda earlier this month on the issue. (Source: Business Line)

Coffee exports likely to drop 12- 15% in FY13

Coffee exports from India, the sixth- largest exporter in the world, are likely to decline 12- 15 per cent for the current financial year ending March. Between April 2012 and March 18, 2012, exports were 294,242 tonnes, a decline of 15.41 per cent. The decline is due to a combination of factors, including weak demand from the European Union, shortage of crop and low carryover stock at the beginning of the financial year. During FY12, India had exported 347,855 tonnes, including re- exports, a growth of 16.4 per cent over the previous year. Apart from domestic production, Processing houses also import raw coffee and re- export after making value addition. With another 12 days for the financial year to end, exports could go up a few more thousands tonnes to cross the 300,000tonne mark, analysts said. (Source: Financial Chronicle)

AP area under sugarcane may drop

Even as the crushing season coming to a close in Andhra Pradesh, sugarcane farmers seem to have decided to shift to other crops next year. The area is expected to come down by one-third as farmers are turning to crops such as maize, discouraged by poor returns. The State is expected to close the season with 90 lakh tonnes cane crushed against the expectation of 103 lakh tonnes. This is less than half of the crushing capacity of 200 lakh tonnes. (Source: Financial Express)

CCEA defers sugar decontrol decision

The Cabinet Committee on Economic Affairs (CCEA) on Tuesday deferred a decision on loosening the decades-old state control over the R80,000crore sugar sector, a senior government official said. No new date has been fixed yet for taking up the issue, the official told FE. As part of its efforts to partially decontrol the sector, the food ministry had moved a proposal seeking freedom to mills from supplying subsidised sugar for state-run welfare programmes known as levy sugar in accordance with the recommendations of a panel set up by Prime Minister Manmohan Singh last year. If implemented, the scrapping of levy burden would leave around R3,500 crore more a year with the cash-starved sugar industry, but it will also raise the Centres food subsidy burden accordingly. At present, mills are mandated to sell 10% of their output to the government for the public distribution system at cheaper rates that cover just around 70% of their cost of production. (Source: Financial Express)

Onion production estimated to fall 4% in 2012-13

Onion production is estimated to decline by four per cent to 168.17 lk tn in 2012-13, the Parliament was informed today. The average wholesale price of onion in major markets ranges from Rs 936 to Rs 1,747 per quintal. According to current estimates, onion production during 201213 is estimated at 168.17 lk tn as against 175.11 lk tn last year, Minister of State for Agriculture Tariq Anwar said in a written reply to the Lok Sabha. The prices of onion are governed by market forces of demand and supply and depend on a host of factors which influence production and arrivals in the market, he added. (Source: Business Line)

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Commodities Daily Report

Wednesday| March 20, 2013

Agricultural Commodities
Chana
Chana futures corrected from higher levels on account of profit taking coupled with arrival pressure of the new crop as well as higher output expectations. However, spot prices gained due to demand from stockists. The Spot settled 0.11% higher while the April Futures settled 0.85% lower on Tuesday. In the union budget 2013-14, although no direct move was considered for Pulses, still The Finance Minister expressed concern about the supplydemand mismatch in pulses. He said that the aggregate demand is a concern. Stating that food inflation is worrying, he said the government would take all steps to augment the supply side.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3468 3399 Prev day 0.11 -0.85

as on March 19, 2013 % change WoW MoM -0.90 -4.50 1.52 -1.68 YoY -3.66 -5.56

Chana Spot - NCDEX (Delhi) Chana- NCDEX Apr'13 Futures

Source: Reuters

Technical Chart - Chana

NCDEX April contract

Pulses Sowing 2012-13

According to the final figures from ministry of agriculture dated 22 February 2012, Chana sowing is 3.6% higher at 95.15 lakh ha compared to previous year. Acreage is up in Rajasthan, Maharashtra, MP and AP at 15.7 lakh ha, 12.53 lakh ha, 32.99 lakh ha and 7.33 lakh ha respectively.
nd

Higher returns earned in 2012, coupled with a hike in minimum support prices (MSP), have helped expand overall acreage in 2012-13 season. The Centre has hiked the MSP by 14 per cent to Rs 3,200 a quintal for chana and as part of its strategy to encourage farmers to grow more pulses to reduce import dependence.

Demand supply fundamentals

According to second advance Estimates released on 8 Feb 2013, Total pulses output for 2012-13 season has been pegged at 17.58 mn tn, down 3.3% compared to previous year. The target for 2012-13 pulses crop output was set at 18.24 million tonne during the year. However, drought conditions have hampered kharif pulses output, which has been only partially offset by Rabi pulses output, especially chana. Out of the total pulses output, kharif output is estimated at 23% lower at 5.48 mn tn while rabi pulses output is pegged 8.72% higher at 12.09 mn tn compared with the final estimates of 2011-12. There has been a sharp increase in the chana output estimates on the back of higher acreage and good yield. Chana output is expected to breach its 2010-11 record of 8.2 mn tn and is estimated at 8.57 mn tn for 2012-13. In its first advance estimates chana output was pegged at 7.9 mn tn. 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).
th

Source: Telequote

Technical Outlook
Contract Chana Apr Futures Unit Rs./qtl Support

valid for Mar 20, 2013 Resistance 3430-3460

3360-3380

Trade Scenario
India imports Chana mainly from Australia and Canada and higher availability in these countries at comparatively cheaper rates is seen boosting imports of Chana to meet the domestic shortfall. In Australia, total chickpea production in 201213 is estimated to have increased to a record 713000 tones as compared with 485000 tons in 2011-12. In Canada chickpea output is estimated at 1.58 lakh tonnes compared with 86000 tn in 2011-12.

Outlook
Chana may continue to trade on a positive note in the intraday due to demand from stockists. However, increasing arrivals of new crop from MP coupled with higher imports may exert downside pressure on the domestic prices. Also, prices may not sustain below Rs 3200 as farmers will not liquidate their produce below these levels.

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Commodities Daily Report

Wednesday| March 20, 2013

Agricultural Commodities
Sugar
Sugar futures declined yesterday after the CCEA deferred the decision on decontrol till the next panel meeting. Sluggish demand from the bulk manufacturers coupled with higher supplies also added to the downside pressure. Agriculture Minister Sharad Pawar said that the sugar output in 2013-14 may fall to around 24 mn tn against current years output of 24.5 mn tn. There are reports that some mills in Maharashtra have stopped crushing due to non availability of cane. The spot settled 0.07% higher while the April Futures settled 0.46% lower on Tuesday.
India, the world biggest sugar consumer, could consider easing curbs on the tightly controlled industry this week. Decontrolling the sugar sector would, involve abolition of regulated release mechanism, removal of levy sugar obligation from industry, freer export-import policy, removal of sugar from compulsory packing in jute bags only and a transparent policy linking cane price with sugar price. The government has decided not to increase import duty on sugar though industry bodies and manufacturers had demanded a hike in the duty to 60% from the current 10% to curb shipment of the sweetener. India's sugar production in the 2013/14 season is set to fall below consumption for the first time in four years as a water shortage trims acreage in three key states.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Mar'13 Futures Rs/qtl Last 3115

as on March 19, 2013 % Change Prev. day WoW 0.07 -0.88 MoM -2.67 YoY 8.51

Rs/qtl

2991

-0.47

-1.29

-4.29

11.73

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMay'13 Futures Sugar No 11-ICE May '13 Futures $/tonne $/tonne Last 529.8 406.89

as on March 19, 2013 % Change Prev day WoW 0.46 0.11 -0.93 -2.71 MoM 8.06 1.72 YoY -20.41 -28.50

.Source: Reuters

Technical Chart - Sugar

NCDEX April contract

Domestic Production and Exports

Out of the estimated 24 mn tn sugar output for the season 2012-13, India produced 13.7 mn tn in the first four months of the season beginning October 2012, up 3 percent a year ago period. With the opening stocks of 6.5 mn tn, domestic Sugar supplies are estimated at 30.5 mn tn against the domestic consumption of around 22. 5mln tn for 2012-13. Exports are not viable as international prices have also declined significantly.

Global Sugar Updates

Liffe white sugar as well as raw sugar futures on ICE gained marginally by 0.46% and 0.11% on account of short coverings. Prices declined sharply earlier as commodity markets retreated in the face of heightened concern about the economic crisis in the Euro zone. A global surplus situation coupled with ample supplies pressurized prices. Prices have declined as ISO forecasted higher global sugar surplus. Brazil exported 1.21 mt of raw sugar in February, vs 1.73 mt in January. The ISO forecasted a global sugar surplus of 8.526 mn tn in 2012/13, up from 6.479 mn tn in 2011-12. It forecast that the sugar stocks-toconsumption ratio would rise to 40.56 percent in 2012/13 from 38.21 percent in 2011/12. Sugar traders are the most bullish since October on speculation that the slump in prices to the lowest in 2 1/2 years will spur Brazilian millers to make more biofuel and less of the raw sweetener from cane. Brazil plans to reduce taxes on ethanol to boost production and use of the biofuel. If brazil cuts tax the ethanol parity to sugar may rise and thus the share of cane directed to sugar production in the 2013-14 season may be 44 -45%, down from 49.6 % in the current period.
Source: Telequote

Technical Outlook
Contract Sugar Apr NCDEX Futures Unit Rs./qtl Support

valid for Mar 20, 2013 Resistance 3035-3055

2985-3000

Outlook
Sugar prices are expected to trade lower today due to higher supplies in the domestic markets. However, prices may recover as demand will now reemerge to meet the summer season requirement. Markets are also awaiting a further announcement from the government on decontrol may also guide the prices. Further, crushing will now start declining amid lower cane availability this season.

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Commodities Daily Report

Wednesday| March 20, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean April Futures declined from higher levels
tracking weak international markets. However, lower supplies in the domestic markets cushioned the downside. The spot settled 0.26% higher while the futures settled 0.23% lower on Tuesday. Exports of Soybean meal during February, 2013 was 5,77,589 tones as compared to 3,70,524 tonnes in February, 2012 showing an increase by 55.88% over the last year. On a financial year basis, the export during April 2012 to February 2013 is 31,13,651 tonnes as compared to 34,52,791 tonnes in the same period of previous year showing a decrease of 9.82%. According to the second advance estimates, 2012-13 oilseed output is pegged at 29.4 mn tn, down by 1.1%, while soybean output is pegged higher at 12.9 mn tn, up 3.2%.

Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Mar '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3601 3631 686.5 686.2 Prev day 0.50 0.26 0.25 -0.04

as on March 19, 2013

WoW -0.19 2.59 0.79 0.26

MoM 6.38 7.86 -6.67 -6.74

YoY 26.97 29.89 -6.60 -6.56

Source: Reuters

as on March 19, 2013 International Prices Soybean- CBOTMay'13 Futures Soybean Oil - CBOTMay'13 Futures Unit USc/ Bushel USc/lbs Last 1407 49.48 Prev day -0.20 -0.40 WoW -5.57 -0.70 MoM -1.25 -4.15
Source: Reuters

International Markets
Soybean Futures on CBOT declined for the sixth day and settled 0.2% lower on Tuesday on account of advancement of the South American crop which has led to low demand for old US soybean. Concerns over fresh euro zone turmoil also led to prices to decline. There are reports that farmers in Argentina are holding back their crop anticipating higher prices. The USDA monthly crop report has kept the Brazil output unchanged at 83.5 mn tn while, it reduced Argentinas crop forecast from 53 mn tn to 51.5 mn tn. German oilseeds analyst Oil World cut its forecast of the 2013 soybean harvest in Argentina by 2 mn tn to 50 mn tn from its Jan estimates because of dry weather, but has raised its forecast of Brazil's soybean crop by 0.5 mn tn. Argentina soybean acreage is estimated at 19.35 mn ha. U.S. farmers will harvest record soybean crops in 2013, ending three years of falling production and rebuilding nearly depleted stockpiles. U.S. soybean processors say they have been pleasantly surprised by the high oil content of the latest U.S. soybean harvest, a factor that has contributed to strong profit margins and should pad year-end soy oil inventories.

YoY 4.59 -8.93

Crude Palm Oil

as on March 19, 2013 % Change Prev day WoW 1.17 0.40 0.58 -0.70

Unit
CPO-Bursa Malaysia Apr '13 Contract CPO-MCX- Mar '13 Futures

Last 2414 451.6

MoM -0.58 -0.04

YoY -28.37 -20.77

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Apr'13 Futures Rs/100 kgs Rs/100 kgs Last 3405 3406 Prev day -1.19 -0.44 WoW -5.09 -1.45

as on March 19, 2013 MoM -14.02 -2.07

Source: Reuters

YoY -8.60 -10.51

Refined Soy Oil: Ref soy oil declined by 0.34% on good supplies
while CPO gained 0.4% due to higher BMD prices. Lead speakers in the Palm Oil Conference have forecasted lower prices due to rising supplies. Higher global production estimates of palm oil by oil world have pressurized prices at higher levels. Global palm oil output is estimated at 55.3 mn tn in 2012-13, up by 3.4 mn tn. India's vegetable oil imports declined 17 percent from a month ago in February due to higher taxes. To curb imports, the tariff value of crude palm oil, the edible oil India imports most, has been raised from $ 815 a tonne to $ 848 a tonne, a rise of 4.04%.

Technical Chart Soybean

NCDEX April contract

Rape/mustard Seed: Mustard Futures declined 0.44% on Tuesday

due to arrivals pressure of the new crop coupled with higher output expectations. Arrivals have commenced in Rajasthan and have pressurized prices. Mustard seed sowing is now up by 2.2% at 67.23 lakh ha. Agriculture ministry in its third advance estimates, pegged mustard output at 7.36 mn tn, up by 11.5%. MSP of mustard seed is fixed at Rs 3000 per qtl.

Outlook
Soybean may trade on a mixed note. Weak international markets may pressurize prices while low supplies may support prices. Mustard seed is expected to continue to trade lower on account of higher output expectations. Soy oil and CPO may continue to decline further on account of forecast of higher supplies. However prices may find support on expectations that output may fall due to seasonally lower yield.

Source: Telequote

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

valid for Mar 20, 2013 Support 663-666 3445-3460 3380-3395 448-450 Resistance 674-679 3505-3535 3430-3450 454-456

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Commodities Daily Report

Wednesday| March 20, 2013

Agricultural Commodities h
Black Pepper
Pepper Futures declined for the third consecutive session yesterday on account of long liquidation at higher levels. Karnataka crop is trading at lower levels due inferior quality. Low stocks in the warehouses coupled with thin supplies and delayed harvesting on back of to lack of skilled laborers have supported the prices. Harvesting of the fresh crop is going in and is expected to gain momentum in the coming days. Food Safety and Standards Authority of India sealed the entire quantity of pepper stored in six warehouses in Kerala of about 8,000 tonnes. Exports demand for Indian pepper in the international markets is also weak due to price parity. The Spot as well as the April Futures settled 0.39% and 0.84% lower on Tuesday. According to a circular issued by NCDEX on 09/02/2013, launch of June 2013 expiry contract in Pepper which is scheduled on February 11, 2013, has been postponed till further notice. The revised launch date will be announced in due course. Spices Board has announced plans to import high yielding Madagascar variety that was behind the record productivity in Vietnam. It could raise productivity of Indian pepper from 2,000 kg/ha to 7,000 kg/ha. Pepper prices in the international market are being quoted at $7,050/tn (C&F, New York). Vietnams Asta is quoted at $6,925-6,975/tn, Indonesia GM-1 is quoted at $6,900/tn and Brazil Asta is quoted at $6,600/tn.

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Mar'13 Futures Rs/qtl Rs/qtl Last 36714 36295 % Change Prev day -0.39 -2.28

as on March 19, 2013 WoW -0.46 -1.28 MoM -10.50 -10.42 YoY -11.21 -12.91

Source: Reuters

Technical Chart Black Pepper

NCDEX April contract

Exports and Imports

Indias pepper exports in 2012 have been reported at just 12,000 tonnes while imports reported at 15,000 tonnes making India a net importer. (Source: Agriwatch) According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of pepper in 2012 stood at 116,962 mt, Vietnam shipped 12000 mt of pepper in January 2013. Pepper imports by U.S. the largest consumer of the spice declined 9% in 2012 period to 62,458 tn as compared to 68,489 tn in 2011. 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. Brazil exported 25,900 tn pepper during Jan-Nov 2012, around 20% lower compared with 32,650 tn in the same period last year. Exports from Malaysia 8,300 tn pepper during Jan-Oct 2012, lower by 30% last year while exports in October stood at 1,077 mt in.

Source: Telequote

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

valid for Mar 20, 2013 Support 34940-35130 Resistance 35630-35930

Production and Arrivals

The arrivals in the spot market were reported at 12 tonnes while off takes were reported at 10 tonnes on Tuesday. As per IPC, Global pepper production in 2012 is projected at 3.27 lk tn, up compared with 3.18 lk tn in 2011. Production for 2013 is projected at 316832 tn. Indonesian pepper output is expected to rise by 24% and in Vietnam by 10%. According to estimates, pepper output in Vietnam is estimated to be 1.05 lakh tonne in 2012 as compared to 1.1 lakh tonne in 2011. Brazil is also expected to produce 22,000 tn this year. 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) Pepper production in 2012-13 is expected around 60,000-63,000 tonnes. Currently, pepper is in the fruit formation stage in Kerala.

Outlook
Pepper is expected to trade on a mixed note today. Prices may recover from lower levels as low stocks coupled with good demand from the upcountry markets may support prices at lower levels. Reports that farmers are holding back stocks may also support prices at lower levels. However, improvement in arrivals may pressurize prices at higher levels.

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Commodities Daily Report

Wednesday| March 20, 2013

Agricultural Commodities
Jeera
Jeera Futures declined sharply yesterday due to arrivals pressure of the new crop. However, sharp downside in the spot was cushioned due to export demand. The arrivals of new crop are averaging around 25,000 bags/ day and are expected to improve in the coming days. Higher sowing as well as conducive weather in Gujarat, the main jeera growing region has increased output expectations. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.352 lakh ha in 2013 compared with 3.719 lakh ha last year. According to the Rajasthan State Budget 2013-14, it has exempted jeera from VAT. In Rajasthan, sowing is expected to increase by 10-15%. The spot as well as April Futures settled 0.6% and 2.24% lower on Tuesday. According to markets sources the exports target has already been achieved due to a supply crunch in the global markets. Supply concerns from Syria and Turkey still exists. Expectations are that export orders may still be diverted to India from the international markets due to lack of supplies from Syria on back of the ongoing civil war. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,375 tn (c&f Europe) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 5-6 lakh bags.

Market Highlights
Unit Jeera Spot- NCDEX (Unjha) Jeera- NCDEX Mar '13 Futures Rs/qtl Rs/qtl Last 13336 13075 Prev day -0.60 -1.45

as on March 19, 2013 % Change WoW -0.92 -1.77 MoM -3.84 -2.10 YoY 1.82 6.78

Source: Reuters

Technical Chart Jeera

NCDEX April contract

Production, Arrivals and Exports

Arrivals in Unjha were reported at 47,000 tn on Tuesday. Production of Jeera in 2012-13 is expected around 38-40 lakh bags (55 kgs each), same as last year. 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 -0.43 -0.42

as on March 19, 2013 % Change

Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Apr '13 Futures Rs/qtl Rs/qtl

Last 6362 6564

WoW 2.26 -4.70

MoM 15.78 2.31

YoY 61.45 54.52

Outlook
Jeera Futures is expected to trade on a negative note. Higher arrivals may pressurize prices further. However, export as well as domestic demand may cushion the downside. In the medium term, prices are likely to stay firm as Syria and Turkey have stopped shipments.

Turmeric
Turmeric Futures traded on a negative note yesterday due to higher supplies of the new crop. Prices had shot up last week due to fresh export demand coupled with output concerns. Traders have received fresh orders from Bihar, Maharashtra, Delhi, Kolkata and some other places. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes. NCDEX imposed special margin of 10% on the long side from 14/03/2013. The Spot settled as well as the Futures settled 0.43% and 0.42% lower on Tuesday.

Technical Chart Turmeric

NCDEX April contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 5,000 bags and 12,000 bags respectively on Monday. Expectations are that production may be lower by 40-50%. There are reports of some crop damage in Erode region. Turmeric production in 2012-13 is expected around 50 lakh bags. Production in Nizamabad is expected around 12 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. It is estimated that next years carryover stocks would be around 10 lakh bags. 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. Outlook Turmeric is expected to trade on a mixed note today. Fresh export / domestic demand coupled with crop damage and lower output concerns may support prices. Demand from stockists may also support prices. However, higher carryover stocks coupled with higher margin on the long side may pressurize prices.

Source: Telequote

Technical Outlook
Unit Jeera NCDEX Apr Futures Turmeric NCDEX April Futures Rs/qtl Rs/qtl

Valid for Mar 20, 2013

Support 12720-12860 6440-6500 Resistance 13210-13410 6650-6730

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Commodities Daily Report

Wednesday| March 20, 2013

Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton witnessed short coverings and settled 0.57% and 0.59% higher on Tuesday. Low demand from domestic millers have pressurized prices over the last few days. Traders have demanded the government agencies (Cotton Corp of India) to release the stocks procured by them. There is some buying interest seen from China which has raised expectations of export demand. The government has decided to continue with the current cotton exports policy. Traders expect exports to cross governments estimates of 8 mn bales. Finance Minister announced various incentives and policies in the Union Budget to support the ailing textile industry. Cotton supplies since the beginning of the year in October 2012 until February 10, 2013 were down at 183.4 lakh bales, down from 189.27 lakh bales a year earlier.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 975 18830

as on March 19, 2013 % Change Prev. day WoW 0.57 1.51 0.59 2.00 MoM 3.83 2.00 YoY #N/A 13.23

NCDEX Kapas Apr Futures MCX Cotton Mar Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 91.13 81.35

as on March 19, 2013 % Change Prev day WoW 0.33 4.35 0.00 0.00 MoM 12.06 0.00 YoY 3.67 -29.20

Domestic Production and Consumption

According to Cotton Advisory Boards (CAB) estimates (23 Jan 2013) for 2012-13 season that commenced in October, domestic cotton production is pegged 330 lakh bales, down from the previous years estimates of 353 lakh bales. However, higher exports and domestic consumption can be met through revised higher opening stocks of 40 lakh bales and higher imports. After witnessing record exports in 2011-12 season, Indian exports could witness significant fall this season on the back of lower availability along with unattractive domestic cotton prices. CAB estimates cotton exports at 80 lakh bales this season, compared with 128.8 lakh bales last year.
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Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

Cotton traded recovered from lower levels yesterday and settled 0.33% higher. Prices declined on Monday due to renewed concerns over the Euro zone stability. Prices had shot up last week due to positive exports sales data. Prices are trading near year high levels. USDA, in its monthly crop report cut global cotton stock estimates on higher demand which cushioned a sharp downside in the prices. Buying by mills has also lifted the prices. Expectations of good demand from China supported prices at lower levels. U.S. growers will harvest the smallest cotton crop in four years and notch the smallest exports in 12 years as world demand for the fiber drops, especially in China. At its annual Outlook Forum, USDA projected a crop of 14 million bales from planted acreage of 10 million acres. Plantings would be the smallest in four years and down 19 percent from last year. The crop, projected to be down 18 percent from 2012, would be the smallest since 2009. China is planning to issue more cotton import quotas to exportdependent textile mills that are struggling to protect margins as domestic prices soar due to a state stockpiling plan. However, according to USDA, the world's largest cotton grower and user, will import the smallest amount of cotton, 8 million bales, in five years in 2013/14 as it copes with huge domestic reserves.
Source: Telequote

Source: Telequote

Technical Chart - Cotton

MCX March contract

Outlook
Cotton prices may trade on a mixed note today. Low demand from mills may pressurize prices. However, expectations of good exports may support prices. Also, the prices may take cues from firmness in the international markets. Expectations that China may release higher import quota which might boost imports also supported an upside in the cotton prices. Also, expected lower US cotton acreage and output in 2013-14 may also support prices at lower levels.

Technical Outlook
Contract Kapas NCDEX April Futures Cotton MCX March Futures Unit Rs/20 kgs Rs/bale

valid for Mar 20, 2013 Support 955-965 18590-18720 Resistance 980-990 18940-19020

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