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Agricultural commodities daily review: India and other countries (January 29, 2010)

Contributed by Nirmal Bang

By Nirmal Bang

SPICES COMPLEX

MARKET ROUNDUP
- Spices complex traded sideways to up except cardamom. Prices of Pepper, Jeera and Turmeric edged up on the hope of increase in demand in coming month. Cardamom hit lower circuit, ended almost 4 per cent down.

IN FOCUS
- Jeera - Bears in cumin seed failed to affect its spot prices that traded steady in Unjha. Good domestic demand extended support to the market. Cumin seed super extra traded at Rs 2,400-2,450 per 20 kgs, extra at Rs 2,325-2,350, best at Rs 2,260-2,300, medium at Rs 2,050- 2,150 and average at Rs 1,885-1,950 per 20 kgs (all raw) (auction rates). The market received 1,500-2,000 bags while 4,300 bags were traded.
- "Buyers were active in the spot market on improved local demand," said a Nizamabad-based trader. In Nizamabad, a major spot market in Andhra Pradesh, the price jumped 188 rupees to 10,437 rupees. "The price movement will depend upon arrivals,"
- Short supply of cardamom in Guatemala is helping Indian exporters sell larger volumes despite high prices in local markets. Interestingly, the global shortage is also helping India to capture some lost export markets. India's export of small cardamom was 650 tonne in 2006-07 of which Saudi Arabia was the leading importer with 63% of the volume and 70% of the value.

FUNDAMENTAL OUTLOOK
- We expect spices to trade sideways to up today. Weaker Rupee can lend some support to the export of the spices, we recommend buying Pepper, Jeera and Turmeric at dips today.

GUAR, PULSES AND GRAINS COMPLEX

MARKET ROUNDUP
- Grains traded sideways to down in yesterday's trading session. Wheat future extended its losses on Thursday on decision made by Government to release stocks of wheat in the open market. Chana too plunged by almost 1 per cent followed by weak spot demand. Guar complex settled flat on Thursday.

IN FOCUS
- Chana arrivals are 4000-5000 bags at Delhi's Lawrence Road Mandi. The Spot price is expected to open at Rs.2300-2320/quintal Rs20/ quintal more than previous day's trading session.
- Lack lustre European wheat exports have found some relief in a fall in both the euro and grain prices but this is unlikely to be enough to wrest business from Black Sea competitors or rein in swelling stocks, traders said.
- MP and UP Government has decided to procure wheat from their own states on higher than MSP decided by central Government. They have imposed 5% tax on corporate on every transaction made to out of state.
- Good rainfalls in winter which has offset some of the loss in moisture due to poor monsoon showers and hopes of good return has pushed wheat acreage in Madhya Pradesh to their highest level in more than three years. As per latest government data, wheat acreage in the state has jumped to around 4.3 million hectares till last week, almost 13% more than last year. The normal area under wheat in the state is around 3.92 million hectares.

FUNDAMENTAL OUTLOOK
- We expect wheat prices to extend its downside rally today; selling is recommended on each rise. Chana and Guar look strong today; buying at dips is recommended.

OIL AND OIL SEEDS COMPLEX

MARKET ROUNDUP
- Oilseed complex traded mix in yesterday's trading session. Soybean and soy oil traded sideways to down tracking global cues. Cottonseed oilcake traded down earlier in yesterday's trading session but export demand limited its downside rally.

IN FOCUS
- Argentina's 2009/10 soy output is set to rise almost 60 percent from last year's drought-hit harvest to a record 51 million tonnes, Buenos Aires Grains Exchange said Thursday.
- The world's No. 2 soy producer Brazil is set to turn out a crop of soy up to 65 million tonnes, a 14 percent jump from last year's output of 57 million. The crop has benefited from an abundant supply of moisture due to unusually heavy rain.
- Malaysia, the world's No. 2 palm oil producer, may delay a mandate for blending palm oil-based biofuel with petroleum diesel to next year due to cost concerns, the Star newspaper reported on Friday. Malaysia's annual diesel consumption stands at about 10 million tonnes and the Southeast Asian country is expected to become a net importer, according to state oil firm Petronas
- In order to achieve 21 million cotton bales by 2015 and increasing yield per hectare to 1,060 kilogrammes, the Pakistan government has committed to increase cotton production through introduction of Bacillus thuringiensis (Bt) cotton.

FUNDAMENTAL OUTLOOK
- Oilseed complex looks sideway to down on global cues. Cottonseed oil cake will trade in thin range today.