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Kottayam: Sheet rubber finished in the red at Rs 94 (Rs 94.50) a kg both at Kottayam and Kochi as the domestic and global factors continued to put pressure on the prices.
The physical rubber prices showed a mixed trend amidst dull volumes. According to observers, certain tyre companies were buyers on the grade at the quoted level till Wednesday but they withdrew their quotes later on Thursday once the market lost ground on international clues.
Futures weaken
The December futures for RSS 4 weakened to Rs 96.15 from Rs 96.50 a kg on MCX. The grade declined at its December futures to Rs 96.68 (Rs 97.25), January to Rs 98.10 (Rs 98.75), February to Rs 99.26 (Rs 100.02) and March futures to Rs 101.34 (Rs 101.90) per kg on NMCE.
The volumes totalled 1,343 (1,619) lots and open interest 5,778 (5,531) lots. The outstanding positions were 1,782 (1,697) tonnes in December, 2,299 (2,186) tonnes in January, 1,399 (1,346) tonnes in February and 298 (302) tonnes in March.
The December futures for RSS 3 fell further to 258.3 yen (Rs 94) from 260.4 yen a kg at TOCOM. Its spot slipped by 38 paise to Rs 97.57 a kg at Bangkok.
The spot rubber prices were (Rs/kg): RSS-4 94 (94.50); RSS-5 90.50 (91.00); Ungraded 86 (86.50); ISNR 20 89.50 (89.50) and Latex 60% 62.50 (62.50).
Chennai: Demand from overseas feed manufacturers is likely to support maize (corn) prices and the outlook for it appears bullish.
“Steady procurement by starch manufacturers in the domestic market is expected to support (maize) as well. Concerns of weather are also likely to put some pressure on prices,” a report prepared by the Knowledge Management Department of NCDEX has said.
Inclement weather, particularly in Andhra Pradesh, was likely to cause less damage since harvest had almost been completed.
On the other hand, weather in States such as Karnataka, Maharashtra, Gujarat and Madhya Pradesh would assist harvest, the report prepared by Sarah Koshie said.
Maize exports
Quoting the US Grains council, the report said there were strong indications of maize exports to South-East Asian countries. The f.o.b prices were quoted at $220-230 a tonne (Rs 8,750-9,150).
Pointing out at the running futures contracts for the commodity, it said the near month December contract was quoted at Rs 749 a quintal, which was a premium of Rs 50 over spot prices at Nizamabad in Andhra Pradesh. January contract was quoted at Rs 767 and that of February and March at Rs 786 and Rs 800, respectively.
Also, rise in month volumes since August is an indicator of a bullish trend.
Higher acreage
The report said kharif maize output was estimated at 130.7 lakh tonnes (lt) compared with 114.3 lt with the increase coming mainly from higher acreage. Sowing in maize during kharif was done in 74.55 lakh hectares against 68.4 lakh hectares last year.
On the global front, production was projected at a record 768 million tonnes, up 10 per cent over last year in view of bumper crops in the US and South America. But sharp increase in production of grain-based ethanol has led to rise in consumption to 763 mt.
The rising prices have led to the domestic consumers complaining about it and are demanding measures to hold the price line.
Kochi: Pepper futures market moved up on Thursday on bullish activities creating artificial demand by intra-day operators.
Indian parity
Consequently, the Indian parity has gone up to $3,625-3,650 a tonne (c&f) while the prices of all other origins remained unchanged.
However, currency factors said to have influenced Brazil and Indonesia who have offered at lower levels.
Indian pepper remained out-priced with no follow up from overseas market, market sources told Business Line.
Switch over
They said that people here were switching over to January. There was good domestic demand and the arrivals were very thin. December contract on NCDEX increased by Rs 363 a quintal on Thursday to Rs 13,429 from Rs 13,066 on Wednesday.
Other contracts
The increase in other contracts was from Rs 238 to Rs 411 a quintal.
On NMCE, December contract moved up Rs 309 a quintal to Rs 13,400 from Rs 13,091. The rise in other contracts was from Rs 165 to Rs 371 a quintal.
Total turnover on NCDEX went up 800 tonnes to 12,014 tonnes, while that on NMCE declined by 72 tonnes to 1,367 tonnes.
Open interest
Total open interest on NCDEX has declined by 51 tonnes to 18,845 tonnes. December position declined by 33 per cent while January moved up 48 per cent.
On NMCE, total open interest declined by 81 tonnes to 1,690 tonnes.
Spot prices in tandem with the futures market trend and good buying support moved up on Thursday by Rs 100 a quintal to close at Rs 12,800 (un-garbled) and Rs 13,400 (MG 1).
Think investment, think stocks. And fairly so, for over the past 10 years, the BSE Sensex has given an average return of around 17 per cent per annum, some 10 per cent more than the average yield on treasury bills.
Investor memory is very short, whether on Dalal Street or the Wall Street. The Harshad Mehtas and Ketan Parekhs are forgotten the moment the next bull run is in view.
Those who enter the market at the beginning of the bull run, make money; those who enter late, mostly due to the herd mentality, end up losing. More often than not, small retail investors get hurt the most.
The first principle of investment is to buy cheap. We understand that “cheap” is a relative term. In a bull run on the stock markets, investors get carried away and fail to realise that after a certain time, the share prices of most companies no longer reflect the true economic value of the company.
This is what, we fear, might happen in the Indian stock markets in the near future. We have come across numerous articles in the business magazines and newspapers, lauding the performance of the Sensex and wondering if the Sensex will touch 25,000, 30,000 or even 50,000.
Doesn’t it sound familiar? Hadn’t we read similar euphoric articles in the US media during the late 1990s? There was also the ill-fated Dow at 36,000 by James Glassman and Kevin Hassett, whose calculations were based not only on grossly illogical assumptions, but also failed to see the coming storm of the dot.com bubble.
While all this was happening, there was one man who kept reminding everyone about the one market, which everyone treats like a prodigal child. We are talking about Jim Rogers, the best selling author of Adventure Capitalists and Hot Commodities, and the commodities market.
During the late 1990s, he not only advised all those who would care to listen that the bull phase in commodities market was about to begin, but also invested heavily in commodities himself. Of course, people called him crazy. Proving them all wrong, he escaped the dot.com bubble and also made tons of money in the commodities market.
We see the same phenomenon being repeated in the Indian markets. The stock markets are breaking all records and with it, the appetite of the companies to grow.
This will result in huge demand for all commodities, especially those used heavily in infrastructure development. This will result in a demand-supply imbalance, driving up the cost of raw materials for the companies. As the costs of raw materials rise, the bottomline would start dwindling, awakening the bears from their slumber.
We are not implying that the stock markets are going to crash in the near future. The economy is doing well and along with it, the stock markets will continue to do well.
However, what we are implying is that, there is an alternative investment opportunity, which is being overlooked by most, especially the retail investors. Historically, volatility of most commodities has been lower than that of equities.
India is one of the largest producers, consumers and exporters or importers of commodities in the world. You would invariably find India’s name in the top 10 list in any of the above category. The country has the potential to become the global hub for commodities trading.
Commodities, as raw materials, are subject to price risk. They form anywhere between 40 per cent (in transport industry) and 90 per cent (in textiles and automobile industry) of the turnover of companies. Commodity derivatives provide the scope to do away with this price risk.
The investment by the government in infrastructure in the next 5 years is expected to be about $1.5 trillion. This would have a cascading impact on both the markets. The demand for steel, copper and other metals is going to go up substantially.
The world over, the food processing industry is $90 billion. We expect some sourcing to take place in the near future from India on the same lines as we have the IT, ITES and BPO.
In the long run, this would increase substantially and this industry may find a new name called FPO (you guessed it right, food processing outsourcing).
The other thing worth noting here is that we have 51 per cent land, which is cultivable as compared with a world average of 11 per cent. Of the 15 seasons required for diverse cultivation, India has 11 seasons available. It is only matter of time that the Industry is realises the opportunity available in agriculture. Already, there have been signs of such activity by Reliance, Bharti, HLL and ITC, etc.
As investors start to realise the potential of the commodities markets, the prices will start moving northwards. In fact, they have already started. The turnover in Multi Commodity Exchange of India Ltd and National Commodity and Derivatives Exchange Ltd are already soaring.
The opportunity in the commodities market is very visible and here to stay. It is time investors take note of this market and realised the possibility of making good money by investing in commodities.
The current bull run in the stock markets is going to end soon, though how soon remains a question. We would rather predict the result of the ongoing India-Pakistan test series.
Kochi: Pepper futures market witnessed high volatility as some of the multinationals having cheap funds available with them were ready to buy exchange delivered pepper at December price for selling at further up position.
Meanwhile, the Kerala State Marketing Federation (Marketfed), the official procurement agency for pepper, sold 66 tonnes of black pepper at Rs 12,850 a quintal on Wednesday.
Indian parity on Wednesday remained at $3,550-3,575 a tonne (c&f). The buyers were holding at $3,500 a tonne. Brazil was offering Asta grade at $3,400 a tonne (c&f) and Indonesia at $3,525 a tonne (c&f).
Contract position
December contract on NCDEX on Wednesday by Rs 45 a quintal to Rs 13,070. The increase in other contracts was from Rs 23 to Rs 63 a quintal.
On NMCE, December contract moved up Rs 57 a quintal to Rs 13,120. January, February and March dropped by Rs 12, Rs 6 and Rs 13 a quintal, respectively, while April and May increased by Rs 161 and Rs 133 a quintal, respectively.
Total turnover on NCDEX moved up 581 tonnes to 11,214 tonnes, while December declined by 14 tonnes. January turnover increased by 73 per cent. On NMCE, total turnover went up 393 tonnes to 1,439 tonnes.
Total open interest on NCDEX declined by 337 tonnes to 18,896 tonnes. Spot prices ruled steady at previous levels on good buying support on Wednesday at Rs 12,700 (un-garbled) and Rs 13,300 (MG 1) a quintal.
Kochi: Experts and political leaders concerned with the slow pace in indigenous production of raw cashew nuts and need for value addition and exports have suggested that the Centre should consider setting up of a Cashew Export Development Authority (CEDA) on the lines of the APEDA and MPEDA with its headquarters here.
“It is right time for the Union government to moot such an authority, as it is understood to be planning to create a Cashew Development Board”, Dr Sebastian Paul, Member of Parliament from Ernakulam, told Business Line.
The CEDA could cover all the activities connected with raw nut production, processing, export promotion, value addition to cashew products etc. In addition, it could also encompass research and development activities for developing different cashew products.
However, the ICAR and the Agricultural Universities in the cashew growing states would continue with their research activities for raising cashew nut production in the country. Value addition and product development including Cashew nut Shell Liquid (CNSL) could continue to be done by the research establishments under the CSIR such as RRL, Thiruvananthapuram and CFTRI, Mysore, he said.
Value-addition
The most important area on which the Cashew Export Development Authority to concentrate is increasing production of raw cashew nuts as an import substitute besides export promotion of value-added cashew and cashew products. At present much of the shipments are in bulk form and value-addition is done overseas by multinational companies, he said.
He said that the Indian cashew processing industry has an installed capacity to process around 1.2 million tonne of raw cashew nuts and where as the raw nut availability indigenously still remained at around half of the requirements of the industry. As a result, the imports have been on the increase consistently. As against 2,49,315 tonne valued at Rs960.54 crore during 2000-01 the imports in 2006-07 were at 5,92,604 tonne valued at Rs1,911.62 crore. Where as, the exports in 2000-01 stood at 89,155 tonne valued at Rs2,049.60 crore, which had gone up to 1,19,540 tonne valued at Rs2,455.15 crore last fiscal. Thus, there is a continuous outflow of substantial sum of forex, he pointed out.
In a bid to achieve self-sufficiency in production of raw nuts the Centre had introduced various schemes in the 9th and 10th five- year plans to raise the indigenous production to 10 lakh tonnes by the end of the 10th plan. However, the achievement remained far short of the target at 6.2 lakh tonne in 2006-07.
The Central funds earmarked for enhancing cashew cultivation are, of late, given to the state governments for implementation of the schemes. But, “unfortunately, these funds are diverted for other purposes with the result the expansion of area under the crop and re-planting etc are not implemented”, he said.
Since cashew could be grown successfully in wasteland if its cultivation on a large scale were promoted in such areas in the country that could lead to productive utilization of vast expanses of wasteland in several states. In Kerala, the government has recently exempted cashew from the land ceiling by amending the Kerala Land Reforms Act paving the way for its cultivation as plantations. However, the government has yet to enforce this provision of the Act, industry sources told Business Line.
In fact, the Centre had earmarked huge funds for wasteland development and cashew was identified as a major crop which could be easily grown in wasteland successfully. But, for want of sufficient motivation from the concerned developmental agencies these funds could not be utilized and hence lapsed every year, he pointed out.
An effective government authority exclusively entrusted with the development of cashew cultivation could be an ideal proposition to make the country self-sufficient in raw nut production and to arrest the outflow of forex on its imports.
On the other hand, India is the second largest consumer of cashew kernels in the world and the demand is growing at an estimated 10 per cent a year.
The cashew processing in the country is concentrated in Kollam district of Kerala and the neighbouring Kannyakumari district of Tamil Nadu and Mangalore district of Karnataka. In fact, Kollam district has over three lakh workers, mostly women, out of the estimated five lakh workers engaged in the cashew industry. The entire exports from Kerala are also taking place through the Kochi port. In fact, 95 per cent of processing and exports are done by the Kerala-based exporters and processors, he said.
The Cashew Export Promotion Council of India (CEPC) is understood to have some time ago prepared a design, plan and estimates for constructing an 11-storey building on its 24 cents of land in the heart of the city. All the clearances for constructing it were also obtained some time back. Once constructed this building could be the headquarters of the CEDA, he said.
More than 1,000 factories are in the country and of this not even a dozen are ISO certified and HACCP compliant, he said.
To meet the financial requirements for running the authority, just like the Spices Board two per cent cess on exports of cashew could be levied and that would come to around Rs50 crore a year.
CEDA could be created by merging the Directorate of Cashew and Cocoa Development under the union ministry of Agriculture and the CEPC. The Spices Board was created by merging the Spices Export Promotion Council and the Cardamom Board and similarly, the MPEDA was given birth.
He said that the Union government may consider creating CEDA so as to effectively increase production of raw cashew nuts, enhance value addition of cashew products and its exports and promoting R&D besides implementing its findings given the importance of this cash crop, he added.
When contacted, the CEPC Chairman, P. Bharathan Pillai said that “interference from government and other agencies such as the proposed Board is not there the cashew exports will flourish in the country and for that CEPC should be allowed to function as it is at present”.
Kochi: Tea prices fail to pick up despite drop in production in India so far this year due its alleged adulteration coupled with the declining trend in the world tea prices.
The Indian output so far has declined by about nine million kg while there has not been any a drop in consumption. And yet the prices failed to pick and have been showing a declining trend, J.K. Thomas, Managing Director, Malankara Plantations Ltd, Kottayam, told Business Line.
Adulteration of tea was on in three to four factories in the Nilgiris. Last year, when the Executive Director of the India Tea Board had initiated action against the adulteration, it could be arrested effectively and that in turn contributed to increase in tea prices, he claimed. But, this year, due to political interference, no action could be taken so far, said Thomas, who is the immediate past President of the UPASI.
At least 20-25 per cent of the teas sold in Andhra Pradesh, Tamil Nadu, some parts of Kerala and Karnataka “at Rs 25-35 a kg are adulterated product as given the high cost of production it cannot be sold at this price,” he alleged.
‘Mixing’
Cashew nut husk and some other non-tea matters are mixed with the teas apart from adding some colour, he said. “This is a serious issue and, hence, the Government should take stringent action,” Thomas said.
According to him imports cannot be construed as a reason for the current price trend. The prices should have moved up when there is a substantial fall in the tea output.
Fall in Exports
Meanwhile, some of the industry sources told Business Line that the sharp fall in exports to Iraq, which has dropped by 20.07 million kg (mkg) during January-June from that of the corresponding period last year also contributed to the declining trend in prices here. Payment problems are pointed out as the reason for the fall in exports to the war-torn country.
Shipments to Pakistan also fell to 2.21 mkg from 5.79 mkg during January –June last year probably because of the critical political situation there. However, exports to the CIS countries showed an increase of 4.42 mkg to 23.81 mkg from 19.39 mkg.
Drop in global prices
Add to this, the international prices have dropped following tangible rise in the Kenyan tea production, which had gone up to 221.52 mkg in January –July from 157.89 mkg in the same period last year. The average auction price during January–August in Mombassa had declined to $1.63 a kg from $2.03 a kg in the same period last year.
However, the price in Sri Lanka had moved up due to fall in output by around 20mkg, they said.
Total world output of tea has increased by 49.15 mkg to 1,114.09 mkg during January–July from 1,064.94 mkg in the same period last year. The decline in the international prices has also influenced the prices in the country, they said.
Mumbai: The country's coffee exports stood at 203,738 tonnes during January 1-November 22 period, down 12.49 per cent from a year ago. Exports have declined because of weak overseas demand, analysts said. During the period, exports of arabica variety declined 29 per cent to 40,067 tonne. Robusta coffee exports fell 15 per cent to 104,036 tonne. Overseas demand for coffee was slack as Indian rates were quoting higher than international prices. Nevertheless, instant coffee exports during the period rose to 45,304 tonnes from 23,486 tonnes a year ago. Re-exports were down at 14,331 tonnes from 29,709 tonnes a year ago. Re-exports are exports of imported coffee after value addition. Coffee Board allows export of Plantation PB, Plantation A, and Plantation Black varieties among others in the Arabica grade. Robusta coffee exports comprise varieties such as Plantation Bits, Plantation Bulk, and Cherry Brown.
Mumbai: Chana prices on the National Commodity and Derivatives Exchange of India continued to decline further although they marginally gained in some of the spot markets due to decline in the arrivals.
December chana contract on NCDEX declined by Rs 18 to close at Rs 2,299 per quintal. NCDEX January chana contract closed Rs 17 lower, at Rs 2,295 a quintal on the exchange.
NCDEX polled Chana prices gained Rs 25 to close at Rs 2,325 a quintal in Lawrence Road Mandi Delhi.
Stockists demand
Chana prices had also rallied by Rs 29 at Bikaner (Rs 2,249 a quintal) and by Rs 15 to close at Rs 2,248 a quintal in Indore.
In Rajasthan and Madhya Pradesh, chana prices were quoted at Rs 2,315-Rs 2,325 a quintal, while Maharashtra chana prices were quoted at Rs 2,550 per quintal and at Rs 2,750 a quintal in Delhi.
Stockist demand was average as supplies of 50-55 trucks were reported for the day, an analyst said.
Kolkata: Last week, the CTC leaf markets at Kolkata and Siliguri, with the exception of those showing a decline in quality, continued to be firm with selected teas appreciating in value, according to J. Thomas & Company Private Ltd, the tea auctioneers.
The Guwahati market, however, was barely steady to irregularly lower, particularly for teas showing a drop in quality. Dust teas, however, met with strong demand at firm to dearer levels. The major blenders and packeteers operated actively with good support from western Indian and other internal sections.
Orthodox teas ruled easy following quality and the smaller brokens and fannings were irregular, while the prices for whole leaf grades and larger brokens declined. The exporters to the CIS and West Asian countries operated at lower levels.
The Darjeeling market remained barely steady around last levels with some medium and plainer brokens tending easier following a drop in demand from the traditional exporters. The major blender and local buyers operated actively. Crop levels picked up with most districts in Assam recording satisfactory returns.
Kochi: For the first time after four years, the average price of cardamom has crossed Rs 500 a kg and the increase during the past three weeks was Rs 100 a kg. It was in 2003-04, the average price crossed this level.
The individual average price on Tuesday moved up to Rs 525 a kg at the auction held by the Header Systems at Nedumkandam in Kerala.
Arrivals, when compared to last year this time, continued to show a decline. At the auction conducted by STCL in Bodinayakannur on Thursday, arrivals stood at 42.5 tonnes and of which 39 tonnes of the capsules were sold. Maximum price was at Rs 540 a kg and minimum Rs 94 a kg. The average was Rs 482 a kg.
Kumily auctions
At the auction held in Kumily in Kerala on last Sunday by the Kerala Cardamom Processing and Marketing Cooperative (KCPMC), the prices shot up by Rs 50 a kg. However, in the subsequent auction held by Cardamom Processing and Marketing Company (CPMC) there on Wednesday, the price showed a decline of Rs 10 a kg. Arrivals stood at 62 tonnes and the entire quantity was sold out, P.C. Punnoose, General Manager, CPMC, told Business Line. Maximum price fetched was Rs 579 a kg while the minimum was Rs 241 a kg. Average price stood at Rs 500 a kg.
Exporters
According to him the exporters were active and bought seven tonnes of the commodity. Upcountry buyers were actively buying as they seem to have exhausted their inventory during the Diwali festival. Besides, the potential decline in output this season by 30-40 per cent is also a contributing factor, he said. Market has witnessed a marginal decline after Wednesday which could be considered as a “technical correction”, he said. As the prices were ruling high, there was a selling pressure also during the week.
Arrivals
The drop in arrivals has effected a corresponding fall in sales also. The total arrivals as on November 21 stood at 2,110 tonnes as against 2,900 tonnes during the same period last year. Similarly, the sales also dropped to 2,000 tonnes from 2,600 tonnes. The weighted average price stood at Rs 421.81 a kg as against Rs 318 during the same period last season. Eight mm bold of good colour and good size was fetching Rs 550-600 a kg while 7 mm Rs 525-550 a kg. Bulk was fetching Rs 480-520 a kg. Even inferior quality capsules were also getting good prices.
During November, considering the commitments made by the exporters during October, 30-40 tonnes of the commodity is estimated to be exported.
The yield in major growing areas of the Kerala’s Idukki district such as Santhanpara, Vandamedu, Kattappana has shown a decline of 30-40 per cent. Normally fourth round of picking used to be on by this time and instead, third round is going on and the output has been much less.
However, formation of tillers is good and if the weather conditions favoured there could be a better crop next year, market sources said.
The weather conditions prevailing at present are favourable, they added.
Chennai: A few days ago, the Malaysian Commodities Minister, Peter Chin, said his Government was uncomfortable with the current prices for palm oil. On Monday, crude palm oil on the Malaysian Derivatives Exchange closed at a record 3,068 Malaysian ringgits (Rs 36,100) a tonne. Soyabean prices, on the other hand, hit the highest in the last 34 years on Chicago Board of Trade at $11.135.
However, on Tuesday, all edible oils began to decline along with crude oil on fears that there would be economic slowdown.
More than the prices, what is causing concern for those in the vegetable oil business is the open positions in the soyabean counter on Chicago Board of Trade. On Monday, open interest in soyabean for January was 2,78,202, while for March it was 1,09,103. Both these positions show a significant fall from last week, indicating vacation of long positions.
“Edible oil prices have runaway to current highs following crude, which nearly touched $100 a barrel twice in the last fortnight. The higher crude prices have given way to the thought that it could lead to increase in offtake of vegetable oils for bio-diesel,” said B.V. Mehta, Executive Director, Solvent Extractors Association of India.
China factor
Crude prices have been on the downswing since the last two days on fears of slowdown in the US economy and hopes of higher production by the Organisation of Petroleum Exporting Countries. Apart from crude oil, speculation that China’s import of soyabean and its oil would be higher to control rising food prices has also lent support.
According to an analyst, the major problem in the vegetable oil counter could be that people/funds would like to unwind the huge open interest position. “If they don’t unwind, then they will have to rollover for which they will have to pay a premium. Going by the current situation, the high price phenomenon could be short-lived,” he said.
An indicator, of at least short to medium term trend, is that open interests are low during May (45,786) and June (52,182), while it is higher for November next (89,300).
Domestic arrivals
“More than the open interest, there are other fundamental issues to consider,” the analyst said. One is that domestic arrivals could soon begin pressurising market. “In India, oilseeds production during kharif is higher. Therefore, it will not be buying edible oils much at least until March. Arrivals of soyabean in Indore are higher, while a higher cotton production could ensure better supply of cottonseed for oil, especially in Andhra Pradesh. Even a State such as Tamil Nadu has had a good groundnut crop,” he said.
“India will also stay off buying palm oil during winter because it will turn solid and therefore, interests will be low,” he said.
During November 1-25, exports of Malaysian palm oil fell 0.4 per cent to 11.07 lakh tonnes.
Output
Also, China would not be in the market after January as the import quota had not been fixed, while soyabean arrivals are expected from Argentina, Brazil during February-March. Though soyabean production in the US is expected to be lower with plantings being at a 12-year low, crop in other countries such as Argentina and Brazil is expected to be higher than last year.
In Malaysia, palm oil stocks, currently around 16 lakh tonnes, could soon top 20 lakh tonnes. Also, the long positions in palm oil are currently around 43,800, whereas during the same time last year, it was over 73,000. “It is a clear indication that things look bearish currently,” the analyst said.
“For palm oil, the US move to not extend subsidy to it for bio-diesel is another blow. The subsidy is only for soya. And Malaysia, disturbed by higher palm oil prices has decided to delay its bio-diesel projects,” he said.
All these point to the current price trend continuing in the short-term only.
According to Mehta, the higher prices could have an effect on demand and consumption. “The higher prices will squeeze demand and could lead to lower growth in consumption,” he said.
Dorab Mistry of Godrej International, speaking at an edible oil seminar in Guangzhou, China, said he would not like to make any fresh forecast for palm oil prices, though 3,000 ringitt was a fair one.
But analysts and the trade expect palm oil price to dip to around 2,500 MYR. “There is a probability of vegetable oil prices falling by at least $100 a tonne in the near term,” said an analyst.
Mumbai: Chana prices on NCDEX closed lower as demand from millers and crushers was subdued. Also, arrivals had increased from imports. Spot prices of chana were quoted lower by Rs 65 at Rs 2,300/quintal.
Pressure on prices led due to daily arrivals in the Delhi market - at an average 50-60 motor during the week, at Bikaner stood around 300-350 bags, while arrivals at Indore stood around 1,500-2,000MT during the week, according to India Infoline.
MMTC tender
Also the Government announcement of arrival of 7.21 lakh tonnes of pulses at Indian ports including 2,900 tonnes of chickpea and 5,09,716 tonnes of yellow peas, have put pressure on prices as they are cheaper alternatives to chana, according to the analyst.
MMTC has invited bids to sell 10,000 tonnes of chickpea, out of which 8,000 tonnes would arrive this month and rest 2000 tonnes will be shipped next month, an analyst said.
PEC also invited bids to sell 1,000 tonnes of chickpea of Tanzanian origin.
Stock position as NCDEX accredited warehouse stood at 3,310 tonnes as on November 23. Chana prices are likely to trade on the lower side, good supply and poor demand, said the analyst.
Kochi: Pepper futures market on Monday declined after moving up at the weekend close on bearish activities and for want of buying support.
International market remained quiet, and yet to open after the weekend holidays. Prices of all the other origins were reportedly easier.
The December contract on the NCDEX declined by Rs 97 a quintal on Monday to close at Rs 13,119 from Rs 13,216 on last Saturday. The fall in other contracts, except May, was from Rs 133 to Rs 143 a quintal. May contract has gone up by Rs 84 a quintal.
On the NMCE, December contract dropped by Rs 83 a quintal to close at Rs 13,103 from Rs 13,186. All the other contracts, except May, declined by Rs 17 to Rs 95 a quintal. May contract has shown an increase by Rs 265 a quintal.
Total turnover
The total turnover, on the NCDEX, increased by 4,229 tonnes to 15,256 tonnes, while that for December declined by 18 per cent. However, January and February turnover increased by 74 per cent and 6 per cent, respectively.
On the NMCE, total turnover went up by 733 tonnes to 1,747 tonnes.
Open interest
Total open interest, on the NCDEX, has declined by 349 tonnes to 18,861 tonnes. December and January positions have dropped by 39 per cent and 44 per cent, respectively, while February moved up by 7 per cent.
On the NMCE, total open interest went up by 119 tonnes to 1,789 tonnes. December position has declined by 49 tonnes to 917 tonnes.
Spot prices remained unchanged at Rs 12,700 (un-garbled) and Rs 13,300 (MG 1) a quintal on Monday.
Bangalore: Indian beer makers may not be too inclined to raise a toast to this, but domestic traders are getting high on exporting barley at a huge premium because of a global shortfall in its production.
What more, this is likely to force most domestic manufacturers to import barley, a key raw material for brewing beer, at a premium. During this fiscal year, domestic barley output is expected to be around 1.24 million tonnes while the demand is around 1.34 million tonnes. With about 50,000 tonnes being exported, beer makers will be forced to pay a huge premium to meet their needs in a country where the beer market is growing between 15 per cent and 20 per cent annually.
What has triggered such a situation is the failure of barley harvests in Australia, Canada and some European countries forcing them to source barley from India even though the country produces low grade barley.
“With the peak season (from April onwards) drawing nearer, there is hardly any barley left for the beer manufacturers in the country,” the All India Brewers Association Director, Sandeep Kumar, told Business Line.
Between 15 per cent and 20 per cent of India’s barley production is fit for making malted barley (or germinated barley) which is a raw material for beer. The rest of the crop is used as animal feed.
Sandeep Kumar said most of the producers face the prospect of resorting to import of malted barley instead of barley even if it costs more because it saves them time. Companies like SAB Miller which is the second largest beer maker in the country, start preparations a few months earlier to meet the demand during the peak season and hence time factor plays a major role for them.
Malted barley constitutes 30 per cent of the cost of production of beer and any increase in its price translates into a bigger hit for the manufacturers. If they need to pass on the increase to the consumers, they cannot do so without seeking permission from various state governments which control the end price. A spokesperson for United Breweries, which is the largest beer maker in the country, however, said that they had foreseen such a situation and hence are well equipped to deal with it but for others it may certainly not be a happy position to be in.
Kochi: Vietnam, which is currently the second largest producer and exporter of cashew in the world, would overtake India in few years time if concerted efforts were not taken by the authorities to increase the production of raw cashew nuts indigenously.
Speaking to Business Line, P. Bharathan Pillai, Chairman, Cashew Export Promotion Council of India (CEPCI), said in the past “we used to import large quantities of raw cashew nuts from Vietnam and ever since they started processing supply was stopped”.
Now, most of the imports are from West and East African countries. In fact, almost half of “our total raw nut requirements of around 12 lakh tonnes is met by imports”.
The possible threat we perceive is that these African countries resorting to cashew processing and exporting, and a consequent stoppage of raw nut supply in the near future.
In such an event, the cashew processing industry in India would have no other alternative but to close down, he said. Given this scenario, indigenous raw nut production has to be increased on a war footing, he added.
Maharashtra overtakes
Maharashtra with the help of Nabard has brought more areas under the crop and has become a major producer. Kerala, which used to be the top producer of raw cashew nuts, has lost its position.
Though the Kerala had decided to grant plantation status to cashew and amended the Land Reforms Rules, it has not yet become an Act and “we don’t know what are reasons for it”, he said.
This and high prices for natural rubber have motivated the farmers to shift to rubber, he said.
In fact, “our dependence on imported raw nuts has to be arrested so as to be competitive in the world market”, he pointed out.
According to the CEPCI Chairman, the labour cost is higher in Kerala, while the productivity is lower.
Besides, the electricity charge is higher than the other States. Thus, the cost of production is on the higher side here.
This has compelled the industry to set up the new processing units in Tamil Nadu’s Kanyakumari district, Rajahmandry and Godavari region of Andhra Pradesh and Karnataka.
Production costs
In fact, as against the processing cost of Rs 650 per 80-kg bag in the units outside Kerala, it was Rs 1,200 in the State. As a result, 60 per cent of the raw nuts processed for exports are currently done outside Kerala, he said.
And yet, competing with Vietnam in terms of price would be difficult, he said. Raw nut availability at competitive price, high labour productivity and affordable power charges could only enable the industry to reduce the production cost.
In Vietnam, the industry is supported by the Government.
Besides, the labour cost is comparatively low. Above all, they often resort to undercutting, he stated.
Cashew is India’s third biggest agricultural export item and it generates employment in rural areas to the tune of 400 man-days per tonne of cashew kernels exported, making it highly-labour intensive of India’s export products. Our exports during 2006-07 were 1,18,540 tonnes valued at $543 million (Rs 2,455 crore). At the same time, our forex outflow for raw nuts import is around Rs 1,900 crore a year now.
Appreciation of the rupee against dollar has put the industry in serious crisis. Most of the cashew exports from India are dollar-denominated and is subject to substantial influence by exchange rate changes.
While the Indian Rupee appreciated against the dollar by around 11 per cent over the last six months, the Vietnam currency has depreciated by 3 per cent and that has, in fact, made our cashew kernels less competitive in the international market, Pillai said.
The Centre, so as to support the industry had included cashew in the Duty Entitlement Passbook (DEPB) Scheme, and raised the rate to 3 per cent in July with retrospective effect from April 1. But, by a public notice last month this rate was slashed by half to 1.5 per cent from October 9.
Where as, other products like tea, coffee, fish, walnut, etc. continue to enjoy higher DEPB while cashew in bulk was left with 1.5 per cent and that in consumer packs of 1kg or less with 2 per cent DEPB. Therefore, the Centre should raise this rate to 3 per cent, he pointed out.
Besides cashew kernels, its allied products and cashew shell nut liquid products should be included in the Vishesh Krishi aur Gram Udhyog Yojana scheme so as to help the cashew growers and the industry, he said.
About the decision to shift the CEPCI headquarters to Kollam, Pillai said that out of 140 cashew exporters in the country 100 were based in Kollam. Besides, of the 15 board members 12 are from there. Therefore, having the CEPCI headquarters in Kollam would be beneficial to the industry.
On the proposed creation of Cashew Development Board, he said that CEPCI should be allowed to function as it is today and there should not be any interference adversely affecting the processing and exporting of cashew, he said.
New Delhi: After MMTC, it is the turn of yet another state-run trading firm, PEC Ltd, to float a tender for import of up to 3.50 lakh tonnes (lt) of wheat on behalf of the Centre.
Delivery
PEC’s tender, issued here on Monday, has sought delivery of 65,000 tonnes at Mundra, 50,000 tonnes at Kakinada, 45,000 tonnes at Kandla, 40,000 tonnes each at Chennai, Vizag and Tuticorin, and 35,000 tonnes each at Kochi and Mumbai.
The wheat is to arrive before March 10, with the bidders required to quote on a port-wise and month-wise delivery schedule. The tender opens on December 3, with the bid offers valid till December 8.
MMTC had earlier, on November 12, floated a tender for a similar quantity. Against the tendered 3.50 lt, the company, on November 23, awarded contracts for supply of 342,500 tonnes at a weighted average price of $400.19 a tonne, cost & freight. This included 1.80 lt to the US-based Cargill and the 1.625 lt to the Swiss trader, Glencore.
Prior to this, the State Trading Corporation of India (STC) had issued two tenders on June 26 and August 30, against which it contracted 5.11 lt and 7.95 lt at an average of $325.59 and $389.45 a tonne, respectively.
During the current fiscal, the Centre has so far finalised imports of 16.485 lt through STC and MMTC. If to this, one adds the latest PEC tender for 3.5 lt and a prospective one for the same quantity by STC, total imports contracted on Government account in 2007-08 will cross 23 lt.
In 2006-07, the Centre contracted 55 lt of wheat imports - wholly through STC - at an average rate of $205.31 a tonne. Each new tender has elicited higher quotes than the preceding ones.
New Delhi: Leading global sugar producers have joined hands and approached the WTO, asking the multilateral body to seek details from India on subsidy to exporters at a time when the country is set to double the sweetener exports.
The World Trade Organisation has asked India to furnish full details of the "subsidy" announced recently for its sugar exporters, after Australia and Thailand took the issue to WTO in Geneva.
The issue of India giving subsidy to its sugar exporters was discussed at the meeting of the WTO Agricultural Committee in Geneva on November 21 where New Delhi was asked to respond to Australia and Thailand, leading producers and exporters of sweetener in the international market.
"Australia and Thailand sought information and clarification, which India said it would supply shortly," the WTO said.
The Indian government has been compensating exporters to the extent of Rs 1,350 per ton in coastal states and Rs 1,450 per ton in other states. However, the government has remained cautious in usage of the words for extending the sop lest the move should attract WTO provisions against subsidy.
The government says it is only "defraying" the transport cost, which should not be treated as subsidy.
India is set to displace Brazil as the number one sugar producer in the world with an estimated output of 30 million tons and double its exports to 4.5 million tons in 2007-08, according to the UN body - Food and Agriculture Organisation.
The world sugar production this year is estimated to reach 169 million tons (raw sugar equivalent), 2.7 per cent more than in the previous year, and about 12 million tons higher than the projected global sugar consumption of 157 million tons.
Kochi: Good general demand propped-up prices at the dust tea auction. Popular CTC dust varieties ended fully firm to dearer by Rs 1-2. Good liquoring medium CTC varieties were also dearer by Rs 1-2.
Medium bolder grades were irregular, while the prices of poorer CTC grades eased. Orthodox dust varieties remained steady, while price of secondaries eased. Blenders as well as domestic market were active on good CTC varieties. Medium bolder CTC grades witnessed some export enquiry.
Best CTC varieties quoted Rs 65-75, medium CTC ranged between Rs 52-60 and below medium was at Rs 31-38. High grown BOPD fetched Rs 88-104, medium BOPD was at Rs 37-40 and secondaries ranged at Rs 27-32.
Leaf Sale
There was 3,73,000 kg of leaf tea on auction. Best high grown orthodox whole leaf grades were steady at last week’s levels. High grown broken and fannings were steady to irregular. Price of medium orthodox broken and fannings eased.
Medium whole leaf grades were firm to dearer. Price of CTC leaf went up Rs 1-2. High grown orthodox witnessed good enquiry from exporters, who were selective on medium orthodox grades. There was better demand from exporters for CTC varieties. Blenders and upcountry market players were also active in the market.
Best Nilgiri varieties quoted Rs 80-93, medium orthodox was at Rs 41-65 and plain orthodox fetched Rs 40-42. Best CTC leaf realised Rs 48-55 and medium CTC leaf was at Rs 43-47.
Top Prices
In the dust segment, Kodanad BOPD fetched the top price at Rs 106, followed by Pasuparai SFD at Rs 85, Pasuparai FD at Rs 82 and Parkside BOPD at Rs 80. Among the leaf varieties, Glendale TGFOP quoted the top price at Rs 129 followed by Craigmore TGFOP at Rs 123, Sutton GFOP at Rs 122 and Glendale FOP at Rs 117.
Coonoor: For the third consecutive week, prices rose at an average Rs 3 a kg at the auctions of the Coonoor Tea Trade Association (CTTA) on Friday, when the demand matched to absorb the low offer.
Only 9.28 lakh kg was offered which is the lowest volume in the last 23 weeks, except for the auctions held on August 30 when the volume was 9.57 lakh kg.
Even medium and plainer teas received strong demand. The bottom level of dust grades rose to a new high of Rs 36 a kg even as that of the leaf grades fell back to Rs 30.
“Brighter liquoring teas witnessed good demand and the quality invoices fetched Rs 6 a kg more. Medium brokens among the CTC leaf grades sold dearer by Rs 2-3. Smaller brokens and fannings fetched Rs 3-4 more. Blacker leaf sorts posted still higher increases. Well-made orthodox leaf grades got over Rs 3 more. Leafy brokens were dearer up to Rs 2. Some BOPF grades fetched Rs 5 more. In the CTC dust counter, better medium sorts were up Rs 5, medium Rs 2-3 more. Plainer teas also got good demand and sold even Rs 4-5 more. On the orthodox dust front, clean secondary teas sold dearer by Rs 3-4. Cleaner residuals fetched up to Rs 5 more,” an auctioneer told Business Line. Among corporate buyers, Hindustan Unilever Ltd lent useful support for the good medium varieties.
Exports
On the export front, Pakistan increased its purchases this week and picked up well-made teas. CIS shippers seemed to be subdued although some purchases were recorded for bolder brokens. Egypt bought smaller brokens and fannings.
Among the CTC teas from bought-leaf factories, Selva Ganapathy Premium and Greenview Estate got Rs 89 a kg, Homedale Estate Rs 87, Santhi Supreme, Vigneshwar Estate and Highfield Estate Special Rs 85 and Darmona Estate Rs 81.
Corporate sector
Among the orthodox teas from corporate sector, Kairbetta got Rs 121 a kg, Chamraj Rs 119, Havukal Rs 114, Corsley Rs 112, Kil Kotagiri Rs 110, Kodanaad and Curzon Rs 106 and Prammas Rs 104.
Coimbatore: Maize prices appear to remain strong notwithstanding arrivals of new crop in the market.
The market yard prices this week were being quoted about two per cent higher at Rs 6,700-Rs 6,750 per tonne over last week’s prices.
The delivered prices, depending upon the distance from main production centres, stood higher and the prevailing prices were Rs 7,100-7,300 in respect of areas that fell close to production centres. In respect of areas that are away from production centres, the quoted delivered rates were between Rs 7,800 and Rs 8,000 per tonne, according to US Grains Council’s India market report.
Spot price
The spot price (in Nizamabad and Karimnagar) is Rs 7,000 and for Davangiri (Karnataka), it is lower at Rs 6,600.
For Rajasthan and Madhya Pradesh markets, the price quoted is at Rs 8,300 per tonne. The futures prices too stand higher with the December delivery price being quoted at Rs 7,450 a tonne and March 2008 delivery being quoted at Rs 8,000 per tonne.
The report said with the increase in delivered prices of soyameal, the feed cost for poultry is on the rise.
With soyameal price having touched Rs 15,600 per tonne, the poultry feed cost has gone up to Rs 13,500-13,700 per tonne compared with Rs 12,000 last year.
This is expected to increase the product cost for broilers (live chicken).
Broiler cost
The average production cost of broiler will be about Rs 35 per kg for integrated poultry units and in the case of individual farmers in North India, it would be higher at Rs 41 per kg.
In addition to this, the higher bird mortality experienced in North Indian states and the higher overheads on account of heating costs to be borne by the Northern farms to ward off winter months (for heating the sheds for brooding) would add up to their production costs, the report added.
Mumbai: After recovering from its recent fall, jute futures for November delivery on MCX may trade with a downward bias, while the December contract may move up in the short to medium term.
According to the Government estimates, output of raw jute may increase to 104.13 lakh bales (of 180 kg) this year against 102.80 lakh bales last year.
Arrivals are expected to remain high till November-end, which may keep prices lower.
“However, in the long term sentiments are bullish due to strong buying from stockiest."
Currently prices of TD-4 varieties quoting about Rs 1250 per quintal in Kolkata.
"Prices are likely to come down by another Rs 50-60 in spot markets in short term due to higher arrivals,” said Sushil Sinha, regional head, Karvy Commodities.
Versatile crop
Jute is among the least expensive and most versatile of textile annual fibre crop.
It is the most important cash crop, industrial raw material and the biggest foreign exchange-earner for India and Bangladesh. Jute grows in any tropical climate.
However, a hot and humid climate along with moderate rainfall is the essential for jute cultivation. Generally, sowing takes place between February and April depending on the location, condition of the land, nature of the soil and amount of rainfall.
Harvest takes place in June -September.
Harvesting 120 days after sowing gives best fibre quality and yield.
After a decline towards Rs 1,295 per quintal, the November contract has retraced much of its losses to settle at Rs 1,314 per quintal.
Kochi: The pepper futures market last week witnessed a sharp fall due to bearish activities coupled with the decline in the prices of other origins.
However, the falling trend was arrested on Saturday following the reported deliberations by the Forward Markets Commission (FMC) that the quantity restriction on near-month position would be relaxed for genuine operators in the exchanges and similarly it would look favourably into the latest decision to reduce the outbound tolerance limits for pepper.
This has created bullish sentiments pushing up the prices of all the contracts last Saturday by Rs 353 to Rs 455 a quintal.
As a result the drop in the prices was reduced to Rs 762 to Rs 965 a quintal. On NCDEX, the fall was from Rs 762 to Rs 924 a quintal while on NMCE it was from Rs 863 to Rs 965 a quintal.
Turnover
The total turnover during the week on NCDEX fell by 2,182 tonnes to 83,220 tonnes from 85,597 tonnes. On NMCE, it dropped by 1,848 tonnes to 8,012 tonnes.
The total open interest during the week has declined by 547 tonnes on NCDEX to 19,210 tonnes. December position fell by 3,136 tonnes to 7,705 tonnes. However, January went up by 2,292 tonnes to 8,411 tonnes.
On NMCE, total open interest declined by 195 tonnes to 1,670 tonnes, while December position fell by 421 tonnes to 966 tonnes.
The spot prices in tandem with the futures market trend during the week also fell by Rs 600 a quintal to close at the weekend at Rs 12,700 (un-garbled) and Rs 13,300 (MG 1) a quintal.
High volatility
The high volatility in the prices had kept the domestic buyers also away.
There was no selling pressure as the growers/dealers were holding back due to the continuous decline in the prices.
In the international market, the US buyers were quiet as the market there was closed for ‘Thanks giving’ holidays.
International
Since the Indian parity continued to rule high above other origins, Indian value addition industry reported to have bought good quantities of pepper from Brazil, Vietnam and Indonesia. The growers as well as the traders here have raised apprehensions about part of its entry into the domestic market and that, they claimed, might depress the prices in the domestic market.
Harvesting of the new crop has begun in a small way and it is expected to pick up in the coming weeks.
Indications are that the output is unlikely to be more than that of the previous crop and rather it might be marginally lower.
In the global scenario, the availability is estimated to be less by around 55,000 tonnes as against the potential demand in 2008, hence, a significant fall in the prices in the coming weeks is unlikely as the major growers who are getting good prices for rubber and coffee could easily afford to hold back their produce in India and as well as in Vietnam and Indonesia.
Mumbai: Volatile conditions characterised the gold market last week with heavy intra-day and inter-day movements. From the current level of $800 an ounce, where would the yellow metal go? Most conditions favour a further upward march.
Key determinants
The key price determinants are all in place.
External factors such as stronger euro/USD, buoyant oil prices, and sensitive geopolitical environment coupled with additional catalyst of expectations of slower US growth momentum and ongoing credit concerns have the potential to continue driving prices to fresh 28-year highs, according to experts.
Strong physical and investor demand emerging upon price dips should provide a solid footing for price. However, the speculative length in gold is high which creates the possibility of short-term price correction. Inevitably, there will be profit taking from time to time as the market moves up. That correction in turn would create buying opportunities.
A strong medium-term uptrend for gold is seen. The next price target is $850/oz which may be realised in a months time.
Generates consensus
The recently concluded LBMA meeting in Mumbai, too, generated a consensus among experts about the strong upside potential of the metal, given current concerns and uncertainties.
Gold continues to affirm its status as a safe haven investment and hedge against inflation. However, under Indian conditions, resistance to high prices from genuine consumers is already felt.
The recent price volatility is likely to further deter household buyers. From the current levels, further firmness to the rupee is limited, at least in the short run. That may make rising gold prices less attractive.
Metals vulnerable
Amongst commodities, base metals remain the most vulnerable to bearish views over economic prospects. With renewed concerns over the credit market, this sector is the softest of the commodities complex. Even on the fundamental side, the developments are less encouraging as there are uncertainties in the short-run. European and the US consumers are de-stocking.
Together with rising LME inventories, sluggish Chinese buying in copper is weighing heavily on the market sentiment. Further price losses at the front end of the base metals curves are not ruled out.
Experts have downgraded short-term lead and zinc price targets.
Aluminium, tin robust
Aluminium and tin markets where inventories have fallen recently are performing more robustly, while nickel is relatively stable.
An interesting feature of the base metals market is that far forward prices are holding up well. This suggests market participants see recent price weakness as a temporary feature.
Even if the US were to face a slowdown in demand, consumption in other countries, notably Asia, is expected to be strong. Inventory levels are expected to stay low and in a number of markets including copper, nickel and tin, inventory levels early 2008 are forecast to fall to fresh lows in the current cycle.
All this suggests that further price weakness, if any, would be temporary. Copper, lead and zinc are seen vulnerable. Despite recent price declines, lead fundamentals look tight and there is the potential for a pick up in buying during the strong battery demand season.
Crude seen strong
Very clearly, tightening market fundamentals point to a continued strength in crude prices.
Stocks in major economies (the US, Europe) are deteriorating sharply. Seasonal demand factors and continued Asian consumption strength are contributory factors.
Supplies, despite OPEC’s five lakh barrels a day additional production since the beginning of this month, are insufficient to meet robust consumption requirement.
Contrary to popular belief, the role of non-commercials (speculators) in the crude market is rather limited. Extreme fundamental tightness provides the market with a powerful platform from which to test even higher highs, experts assert.
Guwahati: The Union Minister of State for Commerce, Jairam Ramesh, on Thursday lashed out at the tea industry for its lack of initiative to explore new markets abroad.Attitude“The tea bosses must abandon their ‘burra sahib country club’ attitude if they are to survive in the changing world economy,” Ramesh said, addressing the India International Tea Convention 2007 here on Thursday. “We can no longer hope to export what we produce, we must produce what we can sell.”India’s traditional markets, as he pointed out, were changing, partly due to intense competition from other tea producing countries and partly due to changing consumer preferences. For example, the demand for orthodox teas was rising; also new markets on Pakistan, Egypt and Iran were holding out promises. India, he felt, should be able to export 30 million kg (mkg) of tea to Pakistan within five years from now.The demand for orthodox teas was rising worldwide even as India produced a meagre 80 mkg of this tea annually out the total production of more than 900 mkg. The Rs 100 crore subsidy scheme launched for the promotion of orthodox teas should yield results, he said expressing the hope that the production of orthodox tea should each 140 mkg within five years.More conventionsThe Minister felt that as a major tea producing and exporting country India should hold more international conventions. “Five conventions in 30 years were just not enough,” he said and suggested that India Tea International Convention should be held regularly every two years such that it became part of the international tea calendar. “The world must know that the Great Indian Tea Party will be held every two years,” he observed.Tea engineeringSuggesting that more emphasis should be laid on tea research and tea engineering, he said a tripartite initiative had been undertaken to promote research in tea with participation of Tocklai tea research centre, Assam Government and Regional Research Laboratory. Indian Institute of Technology Kharagpur was setting up a centre for tea engineering for which Rs 16 crore would be provided by Tea Board, he added.New challengesTarun Gogoi, the Assam Chief Minister, urged the tea industry to cope with new challenges in productivity, marketing and research. “This is important to expand the market both globally and domestically,” he said. For Assam, the health of the tea industry was critical not only from the point of the State government’s revenue but also from the point of view of employment the tea gardens provided.Basudeb Banerjee, Chairman of Tea Board, said fresh initiatives had been undertaken to launch a tea producers’ forum to focus on the issues facing the tea producers of the world. This morning he held meeting with the representatives of Kenya who were participating in the convention.“We’re determined to continue with international tea events, particularly marketing events, to showcase the wide varieties of India teas,” he said.Aditya Khaitan, Chairman of Consultative Committee of Plantation Associations, in his welcome address, raised several important issues like the need for strengthening the partnership between the tea producing states and the Centre, closer interaction between tea traders and tea producers and government coming out with measures to provide relief to the tea producers in matter of huge social cost it was being required to shoulder
Hyderabad: Climate change is here, threatening adverse effects on crops particularly in dryland areas. Experts at the international symposium on climate change warn that yields of rice could be severely impacted.“Temperatures at flowering stage is already close to the maximum,” Dr Dyno Keatinge, Deputy Director-General (Research) at ICRISAT, said.“We have to do something to address this, or yields will fall,” he told reporters on the sidelines of the symposium here on Thursday.According to Martin Parry, Co-Chair of Inter-Governmental Panel on Climate Change (IPCC), the globe was already halfway to the projected increase of two degrees Celsius over a period of time. While it witnessed increase of 0.5 degrees already, another 0.6 degrees was in the water system.Resilience RevolutionStating that the challenge was very big, Dr Parry said it was time to achieve ‘resilience revolution’, working on crops that were resilient to climate change.Referring to the upcoming meeting in Bali, he felt that the countries should at least decide on a proper political action by the subsequent meeting scheduled to be held two years later in Copenhagen.“If we fail to have an action plan by 15 years, it will be more than what we can adopt,” he said.Dr William Dar, Director-General of Icrisat (International Crops Research Institute for Semi-Arid Tropics), called upon the countries in the North and South to make corrective measures happen. “If we don’t act now, it will have serious repercussions having catastrophic results,” he said.Dr Keatinge said continuous funding to institutes like Icrisat held the key in finding solutions and helping the vulnerable and poor in facing the ill-effects of climate change.
Mumbai: Trading on the commodity exchanges were volatile on Thursday in the absence of price signals from the international markets which remained closed for Thanksgiving.Turmeric futures on NCDEX edged up 2.46 per cent to Rs 2,209 per quintal on account of rising demand from Maharashtra and firm spot markets at Nizamabad, Sangli, and Erode.Soya oil futures ended up 1.09 per cent at Rs 528 per 10 kg. Cotton oilseed cake (cocudakl) gained 1.35 per cent to Rs 345 per 50 kg.Among the losers, Jeera topped the list with prices tumbling 3.04 per cent to Rs 9,936 per quintal as a result of increased selling pressure in the Unjha spot market. Chana prices tumbled 1.19 per cent to Rs 2,322 per quintal due to arrival pressure in the market.Chilli downChilli futures fell by 0.98 per cent to Rs 3,645 per quintal due to higher arrivals in the Guntur spot market.On MCX, mentha futures fell sharply 2.33 per cent on lack of demand and weak spot market. NCDEX registered a turnover of Rs 1,574 crore up to 5 pm on Thursday.MCXCOMDEX dropped 0.43 per cent to 2364.35, MCXAGRI was down 0.29 per cent at 1592.71, MCXENERGY fell 0.47 per cent to 2840.12 and MCXMETAL dipped 0.63 per cent to 2510.84.
Kochi: Pepper futures market continued its fall on bears activities coupled with the latest changes brought in by exchanges on the tolerance levels on delivery.Indian parity fell to $3,650 a tonne (c&f). “We are still marginally out-priced”, market sources told Business Line. Indonesia was offering L Asta at $3,450 a tonne (c&f) while Brazil at $3,350 a tonne (f.o.b.), they said. Vietnam remained unchanged.They said the sharp fall could be attributed to the unilateral decisions taken by the exchanges, which are harming the trade.The low prices of other origins have facilitated imports from these countries by Indian buyers. According to an overseas report, 1,000 tonnes of Brazilian pepper would be landing in India in the next three months. Meanwhile, unconfirmed reports said 2,000 tonnes of Indonesian and 500 tonnes of Vietnam pepper would also be arriving at the Indian ports.Contract positionDecember contract on NCDEX dropped by Rs 394 a quintal on Thursday to Rs 13,142. The fall in other contracts was from Rs 364 to Rs 417 a quintal. On NMCE, December contract fell by Rs 417 a quintal to Rs 13,095. The drop in other contracts was from Rs 422 to Rs 480 a quintal.The total turnover on NCDEX moved up by 1,818 tonnes to 15,361 tonnes, while that for December dropped by 31 per cent. January turnover moved up by 62 per cent.On NMCE, total turn over went up by 357 tonnes to 1,766 tonnes. Total open interest on NCDEX fell by 633 tonnes to 19,999 tonnes. December position dropped by 42 per cent.On NMCE, total open interest declined by 111 tonnes to 1,774 tonnes. Spot prices also continued to fall with the prices dropping by Rs 200 a quintal in tandem with the futures market to Rs 12,700 (un-garbled) and Rs 13,300 (MG 1).
Kochi: Pepper futures market witnessed sharp fall on Wednesday following the exchange’s decision to introduce new outbound tolerance limits for pepper with immediate effect.
As a result, there were no takers for November. Confidence in the exchange has been shattered, market sources told Business Line.
November contract on NCDEX matured on Wednesday and 540 tonnes of the commodity were delivered.
December contract fell by Rs 484 a quintal to Rs 13,515 from Rs 13,999. The fall in other contracts was from Rs 481 to Rs 549 a quintal.
On NMCE, December contract fell by Rs 504 a quintal to Rs 13,490. The drop in other contracts was from Rs 68 to Rs 572 a quintal.
Total turnover on NCDEX dropped by 338 tonnes to 13,543 tonnes, and that for December dropped by 40 per cent. January contract went up by 51 per cent.
On NMCE, total turnover moved up by 239 tonnes to 1,409 tonnes.
Total open interest on NCDEX increased by 797 tonnes to 20,632 tonnes. December position dropped by 43 per cent, while January moved up by 41 per cent.
On NMCE, total open interest went up by 61 tonnes to 1,885 tonnes.
Spot prices in tandem with the futures market trend fell by Rs 300 a quintal on Wednesday to close at Rs 12,900 (un-garbled) and Rs 13,500 (MG 1).
Mumbai: Following the overnight gain on the international markets, soya complex opened bullish on NCDEX, but gave in much of the gains to close almost flat.
Soyabean futures fell 0.14 per cent to Rs 1,766 per quintal, while soya oil for December delivery closed with a marginal gain of 0.13 per cent at Rs 521 per 10 kg.
Chilli February contracts lost 2.07 per cent at Rs 3,684 per quintal on weak Guntur spot markets. “Prices in the spot market fell by 50 per quintal to Rs 3,800-3,900 levels. Arrivals were around 30,000 bags and there were no buyers. Export demand was also weak,” said a trader.
Jeera pares losses
Jeera futures hit the lower circuit of 4 per cent but trimmed down its losses and closed 2.07 per cent lower at Rs 10,250 per quintal. Spot jeera prices fell by Rs 250-300 per quintal to Rs 10,000.
Bullion turnover on MCX was at Rs 3,182.00 crore consisted of Gold contracts worth Rs 2,220.85 crore and silver contracts Rs 961.15 crore.
Gold contracts, including gold mini, rose by between Rs 24 and Rs 126 per 10 gm. Gold December 7 was traded 0.39 per cent up at Rs 10,109 per 10 gm.
Silver December contract pulled back by 0.30 per cent at Rs 19,021 per kg.
Mumbai: RiddhiSiddhi Bullions Ltd (RSBL), one of the largest bullion dealers in India, is set to launch online bullion spot trading.
The initiative will be done through a newly floated company RiddhiSiddhi SPOT (Spot Precious-metals Online Trading) Ltd.
Investment
“We have already started demo trading and the venture will go live in the next 10 to 20 days. The company has invested about $1 million in the new initiative,” said Prithviraj Kothari, Director, RiddhiSiddhi Bullions Ltd, which is an “authorised participant” (AP) of all gold exchange traded funds (ETF) in India. AP provides guaranteed liquidity for ETFs.
To begin with trading can be done at Mumbai, Ahmedabad and Hyderabad, where delivery centres have been established.
By April 1, Chennai, Coimbatore, Bangalore, Mangalore, Delhi and Indore can also log on to the platform by when delivery centres will be in place there.
Membership
“We have received membership from 250 jewellers all over India. Broking firms have also shown interest. We expect to have 6,000 members within a year of operations,” Kothari said.
RSBL registered a turnover of Rs 2,340 crore in 2006-07.
Members have to deposit Rs 1 lakh and will be allowed to take position up to 2 kg. The trading unit for gold would be 1 kg and 30 kg for silver.
Trading will be on T+2 cycle (at the end of third day positions have to be squared off by giving or taking delivery) and will become T+7 at a later stage.
The RBI has already allowed trading up to T+11. Trading will be open from 10 a.m. to 9 p.m. The terminal will display gold rates 24 hours.
QUOTES
Typically a trading terminal will display London Metal Exchange quotes and the equivalent conversion relevant to the particular trading centre.
Price limits on both buy and sell side can be preset by the traders.
Deliveries will be of London Bullion Market Association and RBI-approved gold and silver bars.
“RiddhiSiddhi move will bring in a much needed transparency in spot price discovery. Jewellers can also take advantage of price difference in various states (due to different state taxes) if it can take delivery in that particular state where taxes are low,” said Vijay Trivedi, Associate Vice-President, Commodity Research.
RiddhiSiddhi has roped in Axis Bank and Union Bank of India as clearing agents for the trading, according to Kothari.
New Delhi: If there is one development that has really transformed the market dynamics for Indian basmati, it is the emergence - practically from nowhere - of Iran as a major new buyer.
Till around three years ago, the Islamic republic hardly bought any rice from India. In the 2005-06 marketing year (November-October), exports to Iran were estimated at around 60,000 tonnes, which soared to 2.25 lakh tonnes (lt) last year.
Through UAE
“For the new year, contracts have already been entered for 1.25-1.50 lt and the total quantity may cross three lt”, trade sources said.
There are two significant aspects to the newly developed basmati trade with Iran. First is that the exports are mostly routed through the United Arab Emirates (UAE). “The export contracts are with buyers stationed in Dubai, who have their separate channels for despatching the product to the final destination. There is no authentic data of exports to Iran and whatever we have are trade estimates based on what is sold to parties in Dubai,” the sources noted.
The second aspect is that the exports to Iran consist entirely of ‘Pusa-1121’, an evolved (hybrid) aromatic rice yet to be officially notified as ‘basmati’.
Pusa 1121 variety
Till its arrival on the scene, the Iranians were mainly importing par-boiled ‘Super’ and other local basmati varieties from Pakistan, the bulk being through the Quetta-Zahedan border.
“The Iranian authorities have in recent times imposed heavy tariffs and other restrictions on land route shipments, as part of a policy to crack down on the illegal opium trade. This has hit rice exports from Pakistan, which, in turn, has provided a vacuum for the Indian industry to fill. And Pusa-1121 came just at the right time”, the sources said. The new variety has been simply lapped up in Iran, with prices (cost & freight, Dubai) rising from $850 last November to $1,200 towards the season-end and now quoting at $1,150 a tonne.
“Though technically not a basmati, in terms of aroma, taste, fluffiness and other attributes, sella (par-boiled) 1121 scores even over traditional or improved notified varieties. Moreover, it has 30 per cent extra elongation over normal basmati varieties, which means more volume for the same price,” the sources claimed.
Widen market
But what Iran and Pusa-1121 have most importantly done is to widen the market and improve the overall bargaining power for Indian basmati. Till now, the key destinations were Saudi Arabia (4-4.5 lt of par-boiled and one lt of raw basmati) and Europe (3 lt plus of raw brown rice). “Iran’s emergence has led to a once buyers’ market becoming one where sellers call the tune. In fact, we have seen prices being re-negotiated for 1-1.2 lt of exports to Saudi from $700-720 to over $900 a tonne,” the sources added.
Geo-politics
On the flip side, though, is geo-politics.
“With Iran, there is always the spectre of sanctions or even the risk of a military strike. Also, unlike Saudi or even Europe, Iran has no permanent importing interest, as it wants to be self-sufficient in rice”, they observed. The country currently produces 22-23 lt and imports 5-6 lt.
Mumbai: Cottonseed oil cake (cocud) futures on NCDEX fell 1.62 per cent to Rs 339 per 50 kg on expiry of November contract. “Prices at the Akola spot market was also weak due to lack of demand,” said a trader.
Taking a cue from weak global markets kapas futures also fell 0.94 per cent to Rs 451 per 20 kg. Arrivals also increased in Gujarat spot markets.
Sugar dips
Sugar futures dipped 1.01 per cent to Rs 1,273 per quintal on profit booking.
Soyabean futures declined 0.93 per cent to Rs 1,762 per quintal due to bearish trend in CBOT soy complex.
Barley prices edged up by 1.59 per cent to Rs 1,230 per quintal on the back of rising domestic and export demand especially from the beer and malt industries, and supported by supply crunch in the market.
On MCX, kapas khali futures fell 1.01 per cent to Rs 324 per 20 kg due to weak domestic spot markets. Prices fell sharply last 2-3 days in the international markets as well. Mentha oil tumbled 0.98 per cent to Rs 455 per kg as a result of lack of export and domestic demand.
MCX registered a turnover of Rs 5,461 crore up to 5 pm on Tuesday, while it was Rs 1,800 crore at the NCDEX.
MCX Comdex-the composite index of metals, energy and agri sub-indices-gained 0.41 per cent at 2347.44 points, MCX Metal Index 0.44 per cent at 2496.95 points while MCX Energy Index advanced by 0.74 per cent at 2805.96 points. MCX Agri- Index lost 0.80 per cent at 1600.86 points.
NCDEX FUTEXAGRI was down 0.40 per cent at 1447.14 and NCDEXAGRI closed lower 0.03 per cent at 1455.94.
Mumbai: Cotton arrivals have peaked after a slowed down due to Diwali and rains in many parts of the country. In Punjab, Haryana and Rajasthan the desi variety is quoted between Rs 1,600 and Rs 1720 per maund (approx 20 kg) in the spot market, while J-34 was Rs 1,930-2020 per maund.
“Buyers have started purchasing in Punjab, Haryana and Rajasthan after the issue on quality due to pest attacks was resolved. Local mills are yet to enter the market as feel that the prices will come down soon,” said a trader from Punjab.
In Gujarat, the Sankar-6 variety was quoted at Rs 19,500-20,200 per candy, while V-797 is priced at Rs 15,050-15,800 per candy. In Madhya Pradesh, MECH1-H4 was selling at Rs 19,100-Rs 19,900 per candy.
The 28-30 mm staple fibre in Maharashtra was quoted at Rs 18,400-Rs 19,800 per candy.
Andhra Pradesh’s MCU-5 variety is quoted at Rs 20,200 - Rs 21,000 per candy and in Karnataka the DCH-32 grade was at Rs 28,000 - 29,900 per candy.
“Buying in Gujarat is in full swing, while mills from the south were seen purchasing in Maharashtra. There was good demand for export quality Bunny and Brahma variety in Karnataka,” he said.
New cotton contract
Surendranagar Cotton Exchange in Gujarat plans to launch a new contract for Bt cotton variety as the production of tradition varieties such a Kalyan has declined drastically. Named as “BT Cotton 118”, the contracts will be available for trading from next year.
Production trend
Cotton output in Maharashtra, the second largest producer in the country, is projected to increase 40 per cent to 75.50 lakh bales (lb) during 2007-08 (October-September) against 54.10 lakh bales of 170 kg last season, according to trade estimates.
The country’s cotton production is estimated 15.69 per cent up at around 339 lakh bales against 293 lakh bales last year.
“Overall production has improved in the country mainly due to switchover to Bt cotton. Moreover, the yield per hectare has gone up substantially,” said Vijay Trivedi, Associate Vice-President, Commodity Research Consulting Company.
The average yield rose to 511.30 kg per hectare against 481.85 kg per hectare last year. Area under cotton jumped to 100.96 lakh hectares from 91.98 lakh hectares. Gujarat registered the highest yield at 800 kg per hectare, while it was 790 kg per hectare (775.90 kg per hectare) in Punjab.
In Gujarat, production is projected to rise 9.72 per cent to 115 lakh bales against 105 lakh bales clocked last year. Punjab is likely to produce 31.50 lb (27.80 lb), Haryana 18 lb (17.43 lb), Rajasthan 11.75 lb (10.60 lb), Madhya Pradesh 22 lb (18.80 lb), Andhra Pradesh 41 lb (38 lb), Karnataka 10 lb (8.05 lb), Tamil Nadu 5.5 lb (4.95 lb), Orissa 1.25 lb (1.05 lb) and other states 50,000 bales (52,500 lb). The loose production has remained static at last year’s level of 6.60 lakh.
Coimbatore: Cotton lint prices remained firm during the week with exports continue to drive the market despite the lack of buying support from domestic textile industry.
The momentum of seeded cotton arrivals across the markets continued and steady enquiries for exports of kept the raw cotton prices high making it difficult for the domestic industry, according to South India Cotton Association (SICA) market report. The report said the sluggish off-take of yarn, cloth and garments had proved a dampener for the industry.
Bt cotton share
The share of Bt cotton this season crossed 65% of total cotton area. The latest arrivals of cotton all over India is reported to be little over 37 lakh bales (170 kgs) as against 22 lakh bales during the same time last year.
The lint prices at Punjab, Haryana and Rajasthan were being quoted at Rs 1,600-Rs1,720 per maund (Deshi variety). In the case of J-34 it was being quoted at Rs 1,930-Rs 2,020 (per maund) spot. In Gujarat, lint prices stood firm with Shankar-6 quoting at Rs 19,500-Rs 20,200 per candy and V-979 variety at Rs 15,050 to Rs 15,800. Madhya Pradesh’s Mech-1/H4 quoted at Rs 19,100-Rs 19,900 per candy. Lint prices in Maharashtra quoted at Rs 18,400-Rs 19,800 for the fibre of 28-20 mm.
