2nd May 2017 Monthly Report On SPICES May 2017
CARDAMOM Forward curve of Cardamom futures Historic returns of Cardamom futures during month of May 1250.00 1200.00 1150.00 1100.00 1050.00 1000.00 950.00 900.00 1209.20 1010.30 947.50 953.20 2 - -2 2% 11% 16% -11% 4% 850.00 800.00 857.90 May June July August September -2-3 -2 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: MCX Closing as on 28th April 2017 775.53 886.37 948.33 1059.17 1121.13 1231.97 1293.93 Cardamom futures on MCX are trading near its yearly low of 997.20 levels. In days to come, cardamom futures (June) may witness sell on rise & decline towards 900-850 levels. Any short covering may face resistance near 1280 levels. Selling pressure to clear the old stocks ahead of the new season crop is continuously adding bearish sentiments & pressurizing prices. Good summer showers in Idukki district of Kerala, has raised the expectations of a good yiled crop this season. With good rains in the April month, the harvest season to set in by June this year. If the growing regions get good showers in the next two months, then it would be a good crop. Showers during Mar-Apr are expected to boost the yield of the standing cardamom crop, which in turn will improve the output in 2017-18 (Jul-Jun). Buyers were staying away from the market on the anticipation that the next crop is expected to hit the markets by mid-june. The production and export of cardamom, also known as the queen of spices, has been increasing over the past three years. In three years the production and exports have increased by 33.5 per cent and 30 per cent. The union government is implementing various schemes to meet the increasing demand of cardamom in the country. These include production of quality materials of cardamom in the growers field, replanting of old, senile and uneconomic gardens of cardamom 2
TURMERIC Forward curve of Turmeric futures Historic returns of Turmeric futures during month of May 6400.00 6350.00 6300.00 6348.00 4 3 33% 6250.00 6200.00 6150.00 6240.00 2 6% 6100.00 6050.00 6000.00 6058.00 6132.00-3% -6% -3% -8% -7% -7% 5950.00 5900.00 May June July August -2-16% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: NCDEX Closing as on 28th April 2017 5299 5599 5829 6129 6359 6659 6889 Turmeric futures on the national bourse are making fresh yearly low & presently at 2 year low. In days to come, turmeric futures (June) will possibly plunge further towards 5740-5500 levels. A recovery can be seen till 6200 levels. Turmeric prices are decreasing in all the major spot markets. Buyers are hesitant to make any large commitments due to bearish outlook due to good crop against poor demand. The prices of the yellow spice on the spot as well on the futures market are making fresh yearly lows on expectations of a bumper harvest this season. Duggirala turmeric yard is purchasing third grade quality of turmeric produced by farmers at Rs 6,000 per quintal, based on the certificates given by the horticulture department officials. In Andhra Pradesh, out of 13 districts, farmers from 12 districts are bringing their stocks to Duggirala agriculture market yard as it is the biggest turmeric yard in the state. Only the turmeric farmers in Kadapa district are selling their stock in their district market yard. Marketing Federation of Andhra Pradesh (Markfed) has opened two turmeric purchase centres so that farmers could avoid distress sale of their produce and instead get the minimum support price. The Markfed purchase centres will remain open till June 7. A-grade turmeric is being purchased at Rs 6,500 per quintal and B-grade turmeric is being purchased for Rs 6,000 per quintal at these centres. Farmers in Erode urged the district administration to prevail upon the State Government to emulate Andhra Pradesh in procuring turmeric, to arrest falling prices. In Erode, at present, farmers are selling their produce for Rs.7000 per quintal that was Rs.2000 per quintal lesser compared to last year. The supply side fundamentals highlight that total output in country is expected to be around 7.5 million bags in 2016-17, as compared to 6.8 million bags in 2015-16. When added to the carryover stocks of 3 million bags, the total supply may rise to 10.5 million bags. The domestic consumption is around 6-6.2 million bags & this will leave a surplus of 3 million bags for the next season even after exports. As per the third advance estimate of Andhra Pradesh state agriculture department, turmeric production was estimated higher at 1.55 lakh tonnes compared with 1.21 lakh tonnes last year. 3
JEERA Forward curve of Jeera futures Historic returns of Jeera futures during month of May 20100.00 20050.00 13.52% 20000.00 19900.00 7.0 7.26% 6.14% 19800.00 19700.00 19600.00 19500.00 19400.00 19490.00 19655.00 19850.00-8.36% 1.99% -5.36% -2.29% -6. 0.76% 19300.00 19200.00 May June July August - -12.8 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: NCDEX Closing as on 28th April 2017 17060 17590 18540 19070 20020 20550 21500 Jeera futures on NCDEX are trading near to its yearly high of 19910 levels & little shy from its all time high of 20350 levels. In days to come, Jeera futures (June) is expected to take support near 18500 levels & trade higher to test 20500-21000 levels. It is estimated that cumin seed crop would be around 55 lakh bags (55kg each) for 2016-17 against 45-48 lakh bags a year ago. As per third advance estimates for 2016/17, production of Jeera in Gujarat revised down to 2.12 lt, down 4% from its 2nd estimates and almost 11% compared to last year production of 2.38 lt. On the demand side, exporters demand at present is slow due to volatility in prices and they are waiting it to stabilize so they can enter in market. Chinese buyers are active in the market and likely to buy in bulk quantity. Export demand in cumin seed is average, but likely to improve. As per the data released by the government, the exports increased by 32% to 1,01,188 tonnes during first ten month of the financial year 2016/17 (April-January). Last year, India exported about 76,663 tonnes during the same period. The export of cumin in 2016/17 is expected to be higher than the previous year. Cumin seed prices in the spot and futures are around lifetime high and actual buyers or consumers are unlikely to buy in big quantity as risk-reward ratio is not favorable. Upcountry buyers and masala powder manufacturers are buying as per their near term requirements. 4
CORIANDER Forward curve of Coriander futures Historic returns of Coriander May futures during month of 7,000.00 3 6,900.00 6,939.00 2 24% 6,800.00 6,700.00 6,815.00 2 6,600.00 6,691.00 1% 6,500.00 6,400.00 6,300.00 6,567.00 May June July August - -2% -9% -12% 2009 2010 2011 2012 2013 2014 2015 2016 Source: NCDEX Closing as on 28th April 2017 4761.00 5651.00 6109.00 6999.00 7457.00 8347.00 8805.00 Coriander futures (June) is trading near its yearly low of 6511 levels. In days to come, more downfalls is expected in the counter & it can test 6250 levels, if breaks the long term support near 6450 levels and face resistance near 6950 levels. Coriander supply is good and farmers are interested to sell their produce after recent strength in prices. Coriander off take at present is not encouraging, but buyers are eyeing on Ramzan demand ahead from this month. Any sharp fall in prices from hereon unlikely as it may prompt farmers and stockists to hold their produce to sell at the lower level. The data indicates that major chunk of the crop of Rajasthan & Gujarat has been offloaded in the market. India turned out net importer of coriander during FY 2015-16 as Russian produce was very competitive. India imported record 41,257.20 metric tonnes of coriander during April 2016 to January 17 out of this 28,497.29 metric tonnes imported from Russia. Despite of good production last season in the country domestic buyers procured huge quantity from there. But since coriander prices this season has corrected and now seems to competitive in the world market, export demand is likely to improve and may support prices. Strong arrivals of coriander in the spot markets are also weighing on its prices. Farmers and stockists are liquidating their stocks as they are bearish in the commodity on long term due to higher stock in the country. The market participants are slightly positive in coriander and expect exports to rise FY 2017-18 after lackluster previous year. India s coriander exports may rise to 60,000 MT in 2017-18 (April-March) after India turned net importer in 2016-17. 5
SMC Global Securities Ltd. (hereinafter referred to as SMC ) is regulated by the Securities and Exchange Board of India ( SEBI ) and is licensed to carry on the business of broking, depository services and related activities. SMC is a registered member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited, MSEI (Metropolitan Stock Exchange of India Ltd.) and M/s SMC Comtrade Ltd is a registered member of National Commodity and Derivative Exchange Limited and Multi Commodity Exchanges of India and other commodity exchanges in India. SMC is also registered as a Depository Participant with CDSL and NSDL. SMC s other associates are registered as Merchant Bankers, Portfolio Managers, NBFC with SEBI and Reserve Bank of India. It also has registration with AMFI as a Mutual Fund Distributor. SMC is a SEBI registered Research Analyst having registration number INH100001849. SMC or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing /dealing in securities/commodities market. The views expressed by the Research Analyst in this Report are based solely on information available publicly available/internal data/ other reliable sources believed to be true. SMC does not represent/ provide any warranty expressly or impliedly to the accuracy, contents or views expressed herein and investors are advised to independently evaluate the market conditions/risks involved before making any investment decision. The research analysts who have prepared this Report hereby certify that the views /opinions expressed in this Report are their personal independent views/opinions in respect of the subject commodity. DISCLAMIER: This Research Report is for the personal information of the authorized recipient and doesn't construe to be any investment, legal or taxation advice to the investor. It is only for private circulation and use. The Research Report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. No action is solicited on the basis of the contents of this Research Report. The Research Report should not be reproduced or redistributed to any other person(s)in any form without prior written permission of the SMC. The contents of this material are general and are neither comprehensive nor inclusive. Neither SMC nor any of its affiliates, associates, representatives, directors or employees shall be responsible for any loss or damage that may arise to any person due to any action taken on the basis of this Research Report. It does not constitute personal recommendations or take into account the particular investment objectives, financial situations or needs of an individual client or a corporate/s or any entity/s. All investments involve risk and past performance doesn't guarantee future results. The value of, and income from investments may vary because of the changes in the macro and micro factors given at a certain period of time. The person should use his/her own judgment while taking investment decisions. Please note that SMC its affiliates, Research Analyst, officers, directors, and employees, including persons involved in the preparation or issuance if this Research Report: (a) from time to time, may have long or short positions in, and buy or sell the commodity thereof, mentioned here in or (b) be engaged in any other transaction involving such commodities and earn brokerage or other compensation or act as a market maker in the commodities discussed herein(c) may have any other potential conflict of interest with respect to any recommendation and related information and opinions. All disputes shall be subject to the exclusive jurisdiction of Delhi High court. All disputes shall be subject to the exclusive jurisdiction of Delhi High court.