Coonoor Tea Prices Decline

Coonoor: Prices fell Rs 2 a kg on the average with the high-bid demand remaining inadequate to absorb the huge volume on offer at Sale No: 19 of the auctions of the Coonoor Tea Trade Association (CTTA) here.

The volume of 12.96 lakh kg offered was the highest for more than one and a half years.

With North Indian teas hitting upcountry markets, buyers showed no haste in picking plainer and medium grades at high-bids.

“Our offers are for quality teas, but we find a sacrifice in quality with volume production. We can buy plainers only if prices shed” a leading buyer told Business Line.

Accordingly, brighter liquoring teas received good demand and fetched Rs 2 a kg more.

Some invoices gained much more on competition.

“Medium teas eased Rs 2. Smaller brokens and fannings in CTC leaf lost Re 1.

Plainers also eased Re 1. Broken orthodox leaf fetched Rs 2 less. Primary BOPD lost Rs 5”, an auctioneer said.

Exports

On the export counter, Pakistan did not buy leaf grades. It picked up some dust grades for Rs 52 a kg.

Egypt bought smaller brokens and fannings for Rs 53.

CIS operated at lower levels on medium and plainer grades, paying Rs 45.

Among corporate buyers, Hindustan Unilever bought good medium leaf grades, but did not operate on dust sale. JV Gokal selected high-grown broken orthodox leaf.

Bought-leaf factory

No CTC brand of bought-leaf factory crossed Rs 100 a kg this week.

Homedale Estate got the highest bid of Rs 91, followed by Darmona Estate Rs 90. Kannavarai estate, Professor got Rs 89, Shanthi Supreme and Deepika Supreme Rs 87.

Highfield Estate Special and Seva Ganapathy Supreme Rs 85, Green View, Ella Estate Rs 84, Vigneshwar Estate Rs 83, Sree Tea Supreme and Hittakkal Estate Rs 82, Garswood clonal and Aroma Estate Rs 80.

Orthodox teas

Among the orthodox teas from the corporate sector, Chamraj got Rs 119, Colacumby Rs 107, Prammas, Curzon and Corsley Rs 100.

Quotations held by the brokers indicated bids ranging from Rs 43-45 a kg for plain leaf grades and Rs 65-87 for the brighter liquoring sorts. They ranged Rs 47-52 a kg for plain dust grades and Rs 65-84 for brighter liquoring sorts.

Futures Trading In Potato

Mumbai: The ban on futures trading in potato, chana, soya oil and rubber has surprised market participants, as prices of these commodities are already coming down from their recent highs.

Prices of potato, for instance, have crashed from its high of Rs 620 per quintal in mid-March to Rs 470 per quintal (Rs 4.70 per kg) in Agra on Wednesday, when the ban on futures trading was announced.

Chana in the spot markets are down from a high of Rs 3,000 per quintal in mid-March to Rs 2,350, while soya oil has dropped to Rs 580 per 10 kg from Rs 740 levels in March.

In April, the Government allowed duty-free import of crude edible oil and slashed duty on refined edible oils to 7.5 per cent, in a bid to rein in runaway retail prices.

Rubber is hardly traded on the futures market and has a daily turnover of about Rs 3-4 lakh. The recent highest turnover in rubber was about 50-60 tonnes in MCX, otherwise the daily turnover is not more than 30-40 tonnes (3 to 4 contracts), said Harish Galipalli, Head of Research, Karvy Commodities.

Potato

It is the peak arrival season for potato in Uttar Pradesh, Gujarat and West Bengal. Spot prices have already bottomed out and farmers are offloading their produce at throwaway prices, due to non-availability of adequate storage capacity.

The National Horticultural Research and Development Foundation has estimated production at 293.46-lakh tonnes in 2007-08 crop season compared with 270.20-lakh tonnes last year.

“Farmers might be the ultimate losers as prices may start declining further in the absence of price signals from the futures market. In fact, Uttar Pradesh and West Bengal governments have purchased potatoes at Rs 2.50 a kg to help farmers,” said Satish Gupta, a Delhi-based trader.

Soya oil

Soya oil prices in India just reflect international trend. Starting March, prices on Chicago Board of Trade have crashed from 72.69 cent per pound to 48.60 cent per pound. Global soyabean output has declined seven per cent to 220 million tonnes (mt) in 2007-08 against 237 mt last year.

Edible oil seeds production has also declined to 390 mt against 408 mt in the last year.

Apart from 20 per cent drop in US soyabean output, shifting large chunks of agriculture produce for bio-fuels led to a sharp gain in prices of all the edible oils, said an analyst.

Soyabean and soyaoil have 90 per cent price correlation. About 2,000 kg of oil is extracted by crushing one tonne of soyabean. “Irrespective of the ban, the future price trend will depend on the international developments, as we are net importers of edible oil,” he added.

Chana

Rabi production in 2007-08 is estimated below 50-lakh tonnes compared with 58 lakh-tonnes last year. Moreover, carry forward stocks were almost nil, pushing prices upward.

Prices have risen steeply from a high of Rs 2,000 per quintal in 2007 end to Rs 3,000 per quintal in the last 4-5 months.

Despite importing 1.2 million of pulses in 2007-08, the Government could not cool down domestic prices as imports were as costlier as the domestic prices were.

However, the recent raids to check the storage limits imposed by the State Governments augmented supply and pulled prices down.

India produces about 13-14 mt of pulses annually, which is almost stagnant for the last 15 years.

Rubber

Skyrocketing Crude oil prices has pushed rubber prices up 23 per cent in the last four months in India. Crude oil is used for processing rubber. India has produced about 8.25-lakh tonnes in 2007-08 compared with 8.53-lakh tonnes in the previous year.

“There is hardly any volume in the futures market as far as rubber is concerned. I really do not understand how the ban will help bring down domestic prices,” said Galipalli.

Inflation In Agri-Commodities

New Delhi: The jury is still out on whether futures trading has had any role in fuelling inflation in agri-commodities.

But in the case of wheat, the available evidence points at something quite interesting.

De-listing

Since the de-listing of fresh futures contracts in the commodity in the 2007-08 Union Budget, wheat prices have ruled remarkably stable in the domestic market, even while being on the boil globally.

On February 28, 2007 (Budget day), wheat was quoting at around Rs 1,035 a quintal in the Delhi wholesale market. With the new crop’s arrival, prices fell below Rs 1,000 in the early part of April, touching a low of Rs 910 a quintal towards end-May.

By early-July, they had crossed the Rs 1,000 mark again, but traded within a narrow range to close the year at about Rs 1,060 a quintal.

Current year trend

In the current calendar year, too, domestic prices have been generally range-bound — crossing Rs 1,100 a quintal on January 10 and peaking at Rs 1,160 on January 18 and then declining with the seasonal trend to sub-1,100 levels from mid-April, and remaining there till the first week of this month. On Saturday, wheat was selling at Rs 1,100 a quintal.

All this is also reflected in the average wholesale price index (WPI) of wheat, which has increased marginally from 232.1 to 233.1 between February 2007 and April 2008, subject to the normal seasonal variations.

Disconnected prices

During the same period, world wheat prices (of the benchmark US No. 1 Hard Red Winter variety) have spiralled from $200 to over $362 a tonne (free on board, Gulf of Mexico), having averaged $439.72 a tonne in March!

The above disconnect between domestic and global price movements was not so pronounced in the pre-futures ban period.

Between March 2005 and March 2006, the WPI of wheat went up by 11.9 per cent, in tandem with the 15.5 per cent rise in world prices.

Subsequently, between April 2006 and February 2007, the WPI climbed by 16.7 per cent, even as global wheat prices strengthened by 10.9 per cent.

The period since then has witnessed a total de-linking — while wheat prices have triggered unrest spilling over into food riots elsewhere, the Indian market has exhibited relative tranquility. And coincidentally, this has happened after the ban imposed on wheat futures.

“Although no clear causality can be established, it seems that the transmission of international price pressures on domestic wheat prices has been much lower following the ban.

“This was not so earlier, when the screen-based trading in commodity exchanges could capture international price movements more quickly and these got reflected in domestic prices through the ‘reference price’ role played by futures prices,” said Prof Abhijit Sen, Chairman of the Expert Committee to Study the Impact of Futures Trading on Agricultural Commodity Prices.

He, nevertheless, clarified to Business Line that “what I am saying is only a conjecture that requires more rigorous testing”.

Also, it did not represent the Committee’s view, which had held that there was “(no) clear evidence of either reduced or increased volatility of spot prices due to futures trading”.

MCX And NCDEX Managed To Retain Their Turnover

Mumbai: National commodity exchanges—MCX and NCDEX—managed to retain their turnover despite the recent ban on four commodities by the Government.

MCX recorded a turnover of Rs 5,261 crore (Rs 4,098 crore) up to 5 pm, while it was Rs 1,747 crore (Rs 1,641 crore) on Friday.

Mustard sed futures hit 3 per cent upper circuit at Rs 580 per 20 kg as arrivals in the spot markets fell sharply. Castor seed gained 2.58 per cent at Rs 532 per 20 kg on strong edible oils prices and firm spot markets.

Barley up

Barley was up 1.15 per cent at Rs 1,152 per quintal on strong demand. Guar seed rose 1.15 per cent at Rs 1,855 per quintal following good export demand as rupee depreciated further against dollar.

Pepper futures dipped 2.34 per cent to Rs 13,750 per quintal due to lacklustre demand from exporters.

Turnover Of The Teas Increased By Rs 25.1 Cr

Coonoor: The turnover of the teas sold through the Coonoor Tea Trade Association (CTTA) in the first four months of 2008 has increased by Rs 25.1 crore over the same months of last year.

This was because the price earned rose by Rs 6 a kg even as the volume sold increased by four million kgs.

An analysis of the Market Reports of the 17 auctions held till April shows that teas fetched an average price of Rs 53.99 a kg against Rs 48.76 last year. The volume sold increased to 13.4 million kg from 9.69 million kg. Consequently, the overall earnings increased to Rs 72.35 crore from Rs 47.25 crore, marking a gain of 53.12 per cent.

CTCs gain

The sharpest increase came in respect of CTC teas, whose prices rose by Rs 6 a kg to average Rs 53.58. In all, 12.4 million kg were sold against 8.8 million kg last year.

In respect of orthodox teas, more volume could be sold only when prices shed. In all, 1.01 million kgs were sold against 0.89 million kgs last year. But, this happened only with the prices dropping to Rs 58.92 a kg from Rs 61.18.

Last sale of April (Sale No: 17) brought in handsome gains to the producers. Prices averaged Rs 56.41 a kg – up by Rs 9 over the corresponding sale of last year. Volume sold rose to 10.02 lakh kgs against a mere 6.17 lakh kgs in Sale No: 17 of April 2007.

Wheat Procurement Crossing 18 Million Tonnes This Season

NEW DELHI: With wheat procurement crossing 18 million tonnes mark this season, the government may procure another 2 million tonnes by the end of the season, experts said.

“The government can procure 2 million tonnes more by the end of this season if the trend continues,” an expert said. Last year, the government had procured 11.1 MT of wheat leading to an import of 1.8 MT.

Meanwhile, much to the relief of consumers, who are bearing the brunt of price-rise, retail prices of several food items remained stable in four metros since April, while that of edible oils and vanaspati showed a downward trend following government’s price control measures. Mumbai, the financial capital of India, saw downward trend in the prices of mustard oil, vanaspati, tur and potato. While mustard oil prices fell by Rs 5 to rs 70 a kg, vanaspati rates dropped Rs 6 to Rs 62 a kg.

Tur and potato rates declined by a rupee and Rs 1.5 and is available at Rs 39 and Rs 8 respectively.
However, rice, wheat and atta prices remained constant at Rs 18, Rs 13 and Rs 14 respectively in the national capital. The prices of these items remained stable in other three metros also.

LME Copper Lost

Base metals prices were expected to show some downturn in the evening trades after the poor show in the opening trades and that happened although Dollar was weak against the majors after the rate decision from Bank of England and ECB. As per the expectations BOE hold the key rates at 5% on inflationary concerns while ECB went undeterred at 4%.

LME Copper lost by $ 120 in London trade to close $ 8315 per tonne. The dollar was modestly lower Thursday, losing ground to the euro and the pound after both the European Central Bank and the Bank of England both decided to hold policy steady. ECB President Jean-Claude Trichet cited inflation risks in his statement, further bolstering the common currency.

The dollar index, which measures the greenback against a basket of six major currencies, fell 0.2% to 73.37. Dollar weakness typically benefits dollar-denominated commodities, such as gold and crude oil, because it makes them cheaper for holders of other currencies.

LME Copper Inventories data for the day showed a appreciation of 1100 tonnes to 110125 tonnes in Copper inventories. MCX Copper for June expiry closed the day at Rs 345.50 per kg down almost Rs 2, Copper will find Supports at 344 and 342 levels today while Resistances are at 350 levels.
The end of a 20-day contract workers' strike at Codelco in Chile, the world's largest copper producer, has calmed fears of a supply short-fall for the red metal, taking the heat out of recent price gains.

MCX Aluminium May expiry contract closed the day Rs 118.5 per kg down Rs 0.30, Resistances for the contracts are at 120 levels with Supports at 117.70. Nickel closed the trading at Rs 1139 per kg down Rs 28.50, Supports for the contract are at 1135 with Upper Cap at 1177 levels. Zinc and Lead closed at Rs 92.30 and Rs 97.25 per kg respectively. Zinc will find resistances at 94 levels with Lower level support at 91 levels, on the other hand Lead Supports will be at 96 levels with Resistances at 101 levels.

In other metals traded on the LME, Zinc for delivery in three months closed at $ 2210 per tonne against $ 2240, Zinc Inventories data showed a rise of 375 tonnes to 125725 tonnes, while Aluminium was down at $ 2880 per tonne down $ 35. Inventories data for Aluminium showed a depletion in the inventories to the tune of 925 tonnes to 1038350 tonnes. Lead closed the trading at $ 2315 per tonne against $ 2415 per tonne, while Nickel lost heavily to close at $ 27250 per tonne against $ 28400. Tin went up by $ 400 till the close at $ 24400 per tonne as against $ 24000.

Liffe Coffee Futures Settles With Smart Gains

The Robusta Coffee futures settled with smart gains on Thursday on Euronext. Liffe. The commodity slumped in the Wednesday’s trading sessions. In Thursday’s trading sessions, the benchmark July Robusta Coffee futures contract settled with profits of $ 46 at $2164, traded in the ranges $2178-$2109 per tonne. All other months’ futures contracts settled with profits in the ranges of $40-$46 per tonne.

Sharp Fall In The Prices Of Chillies

Tiruchi: A sharp fall in the prices of chillies this season has left growers in Tamil Nadu especially around Manapparai and neighbouring Pudukottai, in the lurch.

The produce has registered an all-time fall this year at the whole-sale markets in Manapparai, a major hub for private procurement of agricultural produce.

The fall, wholesale dealers say, is in the wake of bumper harvest of chillies in Andhra Pradesh.

Chilli growers, consumer activists and wholesale dealers say that this is the first time in the last decade that the per bag price of chilli has registered a dip.

Manapparai is a major market for chillies with scores of villages including Balaviduthi, Poolanpatti, Ponnakoundanur, Thavalai Veeranpatti and T. Reddiyapatti accounting for a vast extent of area under the crop.

A bag of 15 kg of chilli fetched just Rs 600, against Rs 800 last year. A farmer, M. Krishnan of Thavalai Veeranpatti village, says he has been raising the crop for the past four decades. The prices of the crop used to register an upward trend every year in the past.

But, huge arrivals of chillies at Guntur has had an adverse impact on the markets in Tiruchi and Pudukottai districts.

The yield too was far below normal.

Spot Rubber Continued Its Upward Journey

Kottayam: Spot rubber continued its upward journey on Wednesday. RSS 4 improved to Rs 120 a kg from Rs 119 0 a kg at Kottayam and Kochi as major international indices shot up catalysed by firm oil and precious metal futures.

According to observers, supply concerns kept the domestic buyers aggressive and the prices are expected to remain firm in the immediate future on strong fundamentals. RSS 3 (spot) moved up to Rs 119.28 from Rs 116.63 a kg at Bangkok. The June futures for the grade improved to ¥307 (Rs 120.73) from ¥300 a kg at TOCOM.

Futures weak

The rubber futures turned weak on NMCE. The May contract slipped to Rs 120 (Rs 120.94), June to Rs 117.64 (Rs 118.71), July to Rs 114.10 (Rs 115.26) and August to Rs 110.39 (Rs 111.07) per kg for RSS 4. Spot prices (Rs a kg) were: RSS-4: 120 (119); RSS-5:118 (117.50); ungraded: 115 (114.50); ISNR 20: 117 (116.50) and latex 60% : 81 ( 80).