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WEEKLY COMMODITY REPORT

Saturday, May 6, 2017,14:51 IST By V V Sunil A A A

THERE WAS SOME CONCERN OF US CROP IN USA DUE TO SOME ADVERSE WEATHER, WHICH SET A BULLISH TREND IN THE BEGINNING OF THE WEEK. HOWEVER THE SAME HAS BEEN EASIED OUT BY THE END OF THE WEEK.

IT IS ALSO HEARD THAT THERE WILL BE SOME SWITCH OVER IN WHEAT SOWING AREAS TO CORN AND SOYA CROP IN USA IN COMING SEASON.IN INDIA, GOVERNEMENT IS CONTINUING THE PROCUREMENT AND AS ON 05.05.17 THEY HAVE PROCURED 257.85 LAKH METRIC TON AS AGAINST THE TARGET OF 330 LAKH METRIC TON. SOUTH INDIAN MILLERS ARE STILL DEPENDING ON THE IMPORTED WHEAT AND AUSTRALIAN WHEAT IS OFFERED AT CIF 222 AT TUTICORIN PORT FOR MAY.

EDIBLE OIL

INTERNATIONAL MARKET HAS STARTED WITH A POSITIVE TONE IN THE WEEK. PRESIDENT TRUMP’S PLAN TO GIVE CREDIT OF BIO FUELS, NEWS ON REDUCED SOYA CRUSHING IN ARGENTINA DUE TO LESS DEMAND OFSOYA MEAL, IMPACT OF AROUND 10 LAC HECTRE AREA OF SOYA WASHED OUT EARLIER IN ARGENTINA DUE TO FLOOD, DELAY IN SUNFLOWER CROP IN RUSSIA AND UKRAIN, US’S PLAN TO IMPOSE ANTI DUMPING DUTY ON IMPORT FROM ARGENTINA AND INDONESIA WHICH IS POSITIVE FOR U.S SOYA OIL, INCREASED PALM OIL EXPORT FIGURES FROM MALAYSIA DUE TO RAMZAN DEMANDS, EXPECTATION OF AROUND 23 LACS METRIC TONS LESS IN CANOLA OIL IN CANADA, ARE THE MAJOR REASONS FOR THE UPWARD MOVEMENT IN PRICES.

HOWEVER, STILL THE OIL AVAILABLE SURPLUS IN THE MARKET, EXPECTED INCREASE OF PALM PRODUCTS BY 20 LAC MT DURING APRIL TO MAY PERIOD AND FURTHER 16 LAC MT IN NEXT THREE MONTHS, BIG SOYA CROP EXPECTATION FROM BRAZIL, ARGENTINA AND IN NEXT CROP IN U.S. ARE STILL PRESSURISING THE MARKET. EVENTHOUGH THE GAIN WILL BE LIMITED, THE MARKET IS STARTED TO BELIEVE THAT HERE WILL NOT BE MUCH SCOPE FOR DRASTIC FALL IN PRICES NOW.

INDIAN MARKET RESPONDED SLOWLY TO THE INTERNATIONAL MARKET AND PRICES PICKED UP SLOWLY AS AGAINST THE INTERNATIONAL MARKET. INDIA IS HAVING SUFFICIENT STOCK OF IMPORTED OIL, AND ALSO FROM LOCALLY CRUSHING ACTIVITIES.

DURING OCTOBER 2016 TO MARCH 2017, INDIA IMPORTED OIL AROUND 11 LACS LESS, DUE TO INCREASE IN OIL SEED PRODUCTION. HOWEVER DUE TO HEAVY DISPARITY THE CRUSHING ACTIVITIES COULD NOT TAKE PLACE AS EXPECTED BY THE MARKET, WHICH GRADUALLY INCREASED THE IMPORTS.

SOYA OIL IS EXPECTED TO IMPORT 3 LAC MT (2.25 IN MARCH) AND PALM OIL IS EXPECTED TO IMPORT 8 LAC MT (6.00 IN MACH) IN APRIL. SINCE THE PRICE DIFFERENCE BETWEEN SOYA AND PALM IS INCREASING, WE MAY SEE MORE IMPORTS OF CPO THAN SOYA IN COMING MONTHS.

TURMERIC

WITNESSED DRASTIC FALL IN THE PRICES, PRESSURISED BY THE FALL IN PRICES IN COMMODITY EXCHANGES. HEAVY ARRIVALS AND LOWER DEMAND ALSO HAS MAJOR IMPACT IN THE PRICE FALL. AVERTED FEAR OF EL-NINO WILL INCREASE THE CROP IN NEXT SEASON. IT IS HEARD THAT ANDHRA PRADESH GOVERNEMENT HAS PROCURED 6.5 LAC QUINTALS FOR INR 200 CRORES. MARKFED IN ANDHRA PRADESH IS PROCURING FINE QUALITY TURMERIC AT INR 6500 PER QUINTAL AND SECONDARY GRADES FOR INR 6000 PER QUINTAL.

BLACK PEPPER

MARKET MOVING DOWN ON HIGHER ARRIVALS AND ALSO PRESSURE FROM IMPORTS. STRONG RUPEE IS ALSO FAVOURING MORE IMPORTS AND MAKING EXPORTS UNVIABLE IN SPICCES.

CARDAMOM

MARKET MOVING DOWN DUE TO HIGHER ARRIVALS AND LESS DEMAND. HOWEVER RESUMED BUYING AT LOWER LEVELS ARRESTED THE DOWNFALL OF THE PRICES.

CORIANDER

MARKET MOVING DOWN STRONGLY DUE TO FALL IN SENTIMENTS FROM COMMODITY EXCHANGES, HIGHER ARRIVAL PRESSURE AND LESS DEMAND FROM BUYERS. MARKET IS DOWN ALMOST BY 2000/- PER QUNITAL IN ONE MONTH AND SUCH DOWNFALL IN PRICE IS NOT EXPECTED BY THE MARKET. PRODUCTION IS LESS IN THIS YEAR BUT STILL THE CARRY FORWARD STOCK FROM LAST YEAR IS IMPACTING THE PRICES. PRODUCTION IN THIS YEAR IS EXPECTED TO 90 LAKHS (OF 45 KGS) BAGS COMPARED TO 100 LAKHS BAGS OF LAST YEAR. EXPORT IN APRIL TO DEC 2016 IS 23450 MT COMPARED TO THE EXPORT OF 29600 METRIC TON DURING THE SAME PERIOD LAST YEAR.

JEERA

IN OPPOSITE TO MARKET EXPECTATION, JEERA IS ALSO MOVE DOWN DRASTICALLY IGNORING ALL THE POSITIVE FACTORS OF SIRYIAN DISTURBANCES. BUYERS ARE ALSO NOT MUCH ACTIVE IN THE MARKET. ALSOWITNESSED HEAVY FALL IN PRICES IN COMMODITY EXCHANGES. EXPORTS ALSO MAY BE LIMITED THIS YEAR DUE TO STRONG RUPEE

PULSES

PULSE MARKET IS BEHAVED ALMOST STEADY DURING THE WEEK, NOT MUCH DEMAND EXPERIENCED AND SO THE PRICES ALMOST REMAIN SAME. EXPORT IN LAST YEAR WAS LESS TO 1.37 LAC METRIC TON COMPARED TO 2015-16 EXPORT OF 2.55 LAC MT IN 2015-16. AT PRESENT EXPORT IS ALLOWED ONLY FOR CHICKPEAS AND ORGANIC PULSES AND MARKET IS DEMADING TO REMOVE THE RESTRICTIONS FOR OTHER PULSES ALSO TO BALANCE THE BUMPER CROP THIS YEAR. AT PRESENT INDIA IS HAVING AROUND 28 MILLION TONNES OF PULSES AS AGAINST THE CONSUMPTION DEMAND OF 24 MILLION TONNES. MAHARASHTRA GOVERNEMENT IS PLANNING TO BRING A BILL MAKING BUYING AGRO COMMODITIES BELOW THE MINIMUM SUPPORT PRICE IS PUNISHABLE OFFENCE, WHICH WILL BE MORE BENEFICIAL TO PULSES IN MAHARASHTRA. GUJARAT GOVT IS PLANNING TO RESUME PROCUREMENT OF PULSES FOR 50,000 MT MORE.

SUGAR
DEMAND GENERATED FROM MILLERS AND BULK CONSUMERS CAUSED LITTLE UPWARD MOVEMENT IN PRICES DURING THE WEEK. GLOBAL SUGAR PRICES WERE REMAINED UNDER PRESSURE AS TRADERS ANTICIPATING SURPLUS SUPPLY. FAVOURABLE WEATHER CONDITIONS IN CIS COUNTRIES AND BRAZIL ARE SUPPORTING SENTIMENTS OF HIGHER PRODUCTION. THE IMPORT DEMAND FROM INDIA IS ALSO EXPECTED TO REDUCE IN THE LATER PART OF THE YEAR.

RICE
INTERNATIONAL GRAIN COUNCIL EXPECTING RECCORD PRODUCTION IN RICE IN COMING 2017-18 SEASON AND EXPECTING 11 CRORE TON PRODUCTION AS AGAINST 10.85 CRORE IN 2016-17 AND

WEATHER
EL NINO THREAT IS EXPECTED TO BE MINIMUM THIS YEAR, SO THE MONSOON WILL BE NORMAL. ANY EFECT IF EL-NINO HAPPENS IS IN THE LATER PERIOD OF MONSOON, WHICH WILL EFFECT THE LATER CROPS IN NORTH INDIA ONLY. THE MOST IMPORTANT PART OF THE MONSOON FORECAST IS THE RAIN WILL BE DISTRIBUTED WELL THIS YEAR WHICH WILL BE BENEFICIAL TO CROP. THE WEATHER FORECASE HAS SOME SIGNIFICANT IMPACT ON OVERALL AGRI COMMODITIES AS MARKET IS EXPECTINGA GOO CROP THIS YEAR ALSO.

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