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Agricultural commodities daily review: India and other countries (March 05, 2010)

Contributed by Nirmal Bang

By Nirmal Bang

SPICES COMPLEX

MARKET ROUNDUP
- Spices traded mix on Thursday. Pepper ended over 1% down after seesawing in the first trading session as weak international prices and buoyant crop caped the initial gains. Jeera, Turmeric and Chili ended up on short covering. Cardamom ended almost 2% down due to bargain- buying and Mentha oil plunged on higher arrivals in the physical market.

IN FOCUS
- Indian pepper exports in January stood at 1,500 tonnes, down 28.57 percent on year, the Spices Board said. India's pepper output in 2010 is expected around last year's levels, but prices are unlikely to fall sharply in coming months due to low carry-over stocks.
- Prices are weak due to increasing arrivals. Daily inflow at the Unjha spot market has increased to 20,000 bags with the season entering into the peak period. Jeera exports in January 2010 dropped by 46.66 percent to 2,000 tonnes on year, the Spices Board said.
- Turmeric exports in January 2010 stood at 3,250 tonnes, down 22.61 percent from a year ago, the Spices Board said.
- In January 2010, around 34,436 tonne of spices valued at Rs 430.00 crore ($93.57 million) was exported as against 30,870 tonne valued at Rs 365.43 crore ($74.83 million) in January 2009.

FUNDAMENTAL OUTLOOK
- We recommend selling on rise in Jeera and Turmeric on the back of higher arrivals in the physical market. But cardamom and Mentha oil looks strong today; Buying at dips is recommended.

GUAR, PULSES AND GRAINS COMPLEX

MARKET ROUNDUP
- Wheat Futures extended its losses yesterday and ended down by almost 1% weighed by sufficient stocks in the physical market. Chana rose by 1% on lower-level buying prompted by concerns higher temperature in a key growing region may hurt yields. Guar traded sideways to down due to increased supply in the spot market.

IN FOCUS
- Chana arrivals are 6000-7000 bags at Delhi's Lawrence Road Mandi. The Spot price is expected to open at Rs.2150-2160/quintal, Rs.15/quintal higher than the prices on previous day's trading session.
- Food inflation rose marginally to 17.87% for the week ended February 20 on the back of higher prices of milk, wheat, rice and vegetables. The figure in the previous week was at 17.58%. On an annual basis, price of rice increased 10%, wheat 14%, pulses 35%, onions 11% and potatoes 28%.
- The government is planning to export the foodgrain and some varieties of rice - first time in six years - to clear its bulging inventories. The move could further cool prices in the global markets, where wheat is already down 70% from the year-ago peak. India is the world's second largest producer of wheat. Major global grain trading companies operational in India, like AWB, Glencore, Adani along with a host of private wheat traders, are expected to benefit from the move.
- The United States Department of Agriculture (USDA) is forecasting the US agricultural trade exports to increase by $3.5 billion year-over-year (YOY) to $100 billion in FY 2010. In addition, US farm income is forecast to jump by 12 per cent to $63 billion in 2010,

FUNDAMENTAL OUTLOOK
- We expect Wheat to extend its losses today. Guar too may extend its downward rally today; selling on rise is recommended. Chana looks strong today due to rains in some major growing areas are expected to damage the crop.

OIL AND OIL SEEDS COMPLEX

MARKET ROUNDUP
- Oilseed complex traded sideways to up in yesterday's trading session supported by improvement in physical demand. Palm oil ended up tracking firm Malaysian palm oil. Cottonseed oil cake too extended its gains on higher export demand for cotton.

IN FOCUS
- Malaysia's February palm oil stocks likely fell for a second-straight month but the pace of the decline may be slower as exports dropped more than output. Stocks fell 5 percent to 1.90 million tonnes in Malaysia, the world's second largest palm oil supplier, slowing from a 10.7 percent decline in January, a poll of five plantation houses showed.
- Overseas shipments tumbled 14.5 percent to 1.25 million tonnes in the same month as top buyers India and China slowed purchases due to high imported vegetable oil stocks at key ports. Cargo surveyors have flagged a slump of up to 19.4 percent to 1.2 million tonnes at the start of this week.
- Malaysia is likely to ship in 80,000 tonnes of crude palm oil from rival and top producer Indonesia in February to shore up stocks in local refineries, the poll respondents said. "Ending stocks could be further reduced by 100,000 tonnes but it depends on imports".
- Pakistan may sign by mid-2010 a preferential tariff pact with Indonesia for palm oil imports that will divert some of the South Asian country's orders from Malaysia, a top industry official said on Thursday. "At the moment, Malaysia's share (of palm oil imports) is 95 percent and it could become 75 percent if the Indonesian Free Trade Agreement is signed," Janmohammad told Reuters ahead of the Bursa Malaysia Palm Oil Conference next week.
- As the world's top palm oil producer, Indonesia has been pushing for the import duty charged by Pakistan to be reduced to the same level as products from Malaysia for the past two years. Pakistan now charges import duty of 8,900 rupee per tonne on Indonesia's crude palm oil, but charges 15 percent less for the same product from Malaysia as a result of a tariff agreement signed in 2007 between the two countries.
- Cotton prices "should remain relatively high" until the next marketing year begins in August as global supply remains tight, Olam International Ltd., one of the world's top three cotton traders, said today. India has no plans to ban exports of cotton as the country has sufficient stocks of the fibre, the junior textiles minister told parliament on Thursday.

FUNDAMENTAL OUTLOOK
- Oilseed complex is expected to extend its upward rally today taking clues from international markets. Buying is recommended in entire oilseed commodities.