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Agricultural commodities daily review: India and other countries (March 11, 2010)

Contributed by Nirmal Bang

By Nirmal Bang

SPICES COMPLEX

MARKET ROUNDUP
- Spices Complex continues to remain active with Turmeric, Pepper, Chili and Cardamom. Turmeric hit the circuit yesterday and ended almost 4% up followed by prices in the physical markets.

IN FOCUS
- Mentha oil too is expected to increase on the back of increasing export demand as well as domestic demand for the commodity. Pepper is continuously increasing for last 3 days s Export demand for Pepper is likely to remain robust despite of fresh arrivals in the physical market.
- 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.
- Jeera huge difference between spot and futures has resulted into the selloff in future as despite of rise in futures prices spot prices didn't move up sharply fundamentals for the commodity still remain bullish.
- Turmeric has climbed almost 12% since last fifteen days due to weak arrivals in Errode and some some other spot markets. After a huge rally in the prices, we expect some selloff in the commodity.

FUNDAMENTAL OUTLOOK
- We expect spices to trade side-ways today. Pepper and Jeera in particular look bearish; selling on rise is recommended today.

GUAR, PULSES AND GRAINS COMPLEX

MARKET ROUNDUP
- Wheat futures ended higher on Wednesday on bargain-buying after losing about 3 percent in the past two sessions. Chana too traded up on short covering. Guar complex settled up on higher international demand for guar gum.

IN FOCUS
- The government's nodal food procurement agency on Wednesday reached an agreement with spot exchanges promoted by Financial Technologies and NCDEX to sell wheat by using their electronic platforms on a pilot basis, said officials from the bourses. The use of electronic platforms will lead to quicker distribution  and timely payment. National Spot Exchange (NSEL) will accordingly be responsible for selling FCI wheat stocks in Delhi while NCDEX Spot Exchange (NSPOT) expects to conduct sales in Andhra Pradesh.
- Under pressure to mobilize resources for its "food for all" promise, UPA government is expected to significantly hike the central issue prices for wheat and rice for Above Poverty Line (APL) families getting the benefit under public distribution system.
- Faced with the possibility of wheat sold through open market sale scheme (OMSS) getting back into the procurement system, the government has decided to temporarily wind up its sale of wheat for bulk consumers by March-end in key wheat growing states of Punjab, Haryana and Uttar Pradesh. The government's annual procurement of wheat is expected to start from April 1.
- The procurement of wheat on support price will be started in the MP state from March 15. Chief Minister Shivraj Singh Chouhan has instructed district collectors to ensure that the benefit of wheat procurement on support price should reach the real farmers of the state only.

FUNDAMENTAL OUTLOOK
- Wheat prices are expected to hover in this price range today but overall outlook remains bearish. Chana is expected to extend its gains today; buying at these levels would be a good opportunity. Outlook for Guar seed remains bearish; any upside can be taken as a good selling opportunity.

OIL AND OIL SEEDS COMPLEX

MARKET ROUNDUP
- Oilseed complex traded side-ways in yesterday's trading session. Soybean traded sideways to down on profit booking. Soy oil and Palm oil rose yesterday followed by international bourses. Cottonseed oil cake ended up on short covering after seesawing in the early trade.

IN FOCUS
- China's monthly soy imports in the month of February plunged by 28% to 2.95 million tonnes as crushers cut imports in preparation for a halt in operations during the Chinese New year holidays.
- March imports would rise to 3.7 million tonnes or 4 million tones as pig breeders are back to restock after many animals were slaughtered before February holiday, though restocking so far has not been satisfactory. China imported 370,000 tonnes of vegetable oil, mainly Palm oil & soy oil in February. Total imports in the first two months rose 18% as compared to previous year to 910,000 tonnes.
- Demand for soymeal continued to remain weak on the back of breeders slaughtered more pigs over diseases outbreak worries. Greater slaughter also has pressured Chinese pork prices that too in the peak consumption season of the last month. Pork prices have already fallen below breeding cost which in turn is further likely to discourage farmers from breeding animals.
- Exports of Malaysian Palm oil product for March 1-10 rose 5.8% to 434,340 tonnes from 410,459 tonnes as per SGS cargo surveyors.
- Higher transport costs and toll charges have increased the cost of transport for soybeans from the state to port by about 25%. When we combine all the cost associated with transporting soybeans out of Mato Grosso to export facilities, it accounts for nearly 50% of total cost of producing soybeans said Soybean & Corn Advisory.
- Malaysia's Palm oil output plunged by 12.45% and stocks plunged by 11% for the month of February reported by MPOB.

FUNDAMENTAL OUTLOOK
- Oilseeds are likely to trade sideways for the day on the back of CPI numbers released by China at 2.7% which has triggered fresh selling in oilseeds on DCE early morning.