Commodities Daily Report

Tuesday| August 7, 2012

Agricultural Commodities

Content
News & Market Highlights Chana Sugar Oilseed Complex Spices Complex Mentha Potato

Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narveker@angelbroking.com (022) 2921 2000 Extn. 6130 Anuj Choudhary - Research Associate anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132

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Commodities Daily Report

Tuesday| August 7, 2012

Agricultural Commodities
News in brief
Good monsoon run over central parts continues
A good run of the monsoon continued to hold over east-central India and adjoining peninsular India during the 24 hours ending Monday morning. The rain-driving low-pressure area has crawled over to land and lay over north-east Madhya Pradesh and adjoining north Chhattisgarh. Once again it could prove so near, yet so far for Gujarat just to further west, since clouds are likely to get steered towards north India. But Gujarat is forecast to get rains from a follow-up circulation, which would move in all the way across central India into this State later this week. An extended forecast valid until Monday next said that rains may lash parts of the plains of north-west India, east and adjoining central India, the north-eastern States and the west coast. But mainly subdued rainfall activity has been forecast for parts of west India and south-east peninsular India. (Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Aug 06, 2012

WoW MoM YoY

Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz

17413 5283 55.52 92.2 1613

1.25 1.28 -0.41 0.88 0.43

1.57 1.59 0.16 2.70 -0.42

-0.72 -0.84 1.04 5.71 0.25

-3.85 -3.19 25.53 -1.70 -1.77

Source: Reuters

Cotton up as farmers hold on to kapas stock

Cotton moved up Rs 200-300 a candy of 356 kg on Monday due to short supply even as demand from domestic mills was limited. According to brokers, the fibre is likely to remain high as there are not enough stocks. According to a Rajkot-based cotton broker, farmers are not ready to sell kapas or raw cotton, leading to the shortage. Moreover, ginning is also low in Gujarat, the broker said. Kapas or raw cotton reached Rs 1,0001,010 for a maund of 20 kg. The fibre was steady in South India on normal demand from local mills and limited selling. (Source: Business line)

Ban oil meal exports, says Gujarat milk co-op

The Gujarat Co-operative Milk Marketing Federation (GCMMF), which owns the Amul brand, wants an immediate ban on oil meal exports. This is to ensure adequate domestic supplies for dairy farmers reeling under the impact of rising feed and fodder prices, as drought hits kharif crops in parts of the country. In the past month, livestock feed prices have shot up by about 35 per cent, while green fodder prices have almost doubled, resulting in an increased milk production costs for farmers. Total oil meal exports, including soybean, rapeseed, groundnut, castor and rice bran extracts, increased 9 per cent in volume terms for the fiscal ended March 2012. The Government recently decided to waive duty on imports of oil meal to boost supplies. Things have drastically changed in the past one month. We are keeping our fingers crossed, he said. GCMMF has hiked the procurement prices by 13-14 per cent in the current financial year, Sodhi said, but clarified that there were no immediate plans to raise product prices for consumers. (Source: Business Line)

HC directs UP sugar mills to clear dues within 15 days

In an order that will benefit more than 40 lakh farmers in Uttar Pradesh, the Lucknow bench of the Allahabad High Court has ruled that none of the nationalised banks or financial institutions that have advanced loans to the states sugarcane farmers should take any coercive step or issue recovery notices for recovering outstanding agricultural loans from farmers whose cane payments have not been cleared by the over 100 sugar factories in the state. assing an interim order on a PIL filed by Rashtriya Kisan Mazdoor Sangathan (RKMS), the court has directed the sugar mills to pay cane dues as well as the accumulated interest to the farmers within 15 days or face recovery notices from the state government. (Source: Business Standard)

No foul play in current farm futures rally: FMC

The chief of the commodity markets regulator has ruled out chances of manipulation behind the current rally in farm futures but has affirmed the watchdog will apply all tools at its disposal, including raising special margin and initial margin, to curb speculation. Asked if the FMC is considering banning trading of some farm commodities to curb any suspected rally in prices, Abhishek said he doesnt want to send any wrong signals to the markets at the moment but would use all instruments available, including raising margins, at the right time. Analysts say a 20% deficit in monsoon rains has affected the sowing of summer crops such as paddy, coarse cereals, pulses, oilseeds and some spices, driving up their prices, both in spot as well as futures. However, the regulator still remains vigilant not to allow suspected elements to manipulate prices, as in case of guargum. Abhishek said the regulator hasnt yet decided on allowing the re-listing of guar futures yet.
(Source: Business Standard)

Special commission to fix MSP for forest produce

In a move that is expected to benefit millions of people earning their livelihood from the forest, the government has decided to appoint a special commission for fixing minimum support price (MSP) for minor forest produce like bamboo, mahua and tendu leaves. The commission is expected to be appointed by January 2013 under the Tribal Cooperative Marketing Development Federation (Trifed), tribal affairs minister V Kishore Chandra Deo said on Monday.The Planning Commission has already given its approval for setting up such a commission.
(Source: Business Standard)

No fresh position in Turmeric August 2012 expiry contract

As per the directives of the Forward Markets Commission, no fresh positions will be allowed in respect of Turmeric (TMCFGRNZM) August 16, 2012 expiry contract from August 07, 2012 till the expiry of the contract. Only squaring up of existing positions will be allowed. (Source:
NCDEX)

Pakistan orders add sheen to turmeric

pot turmeric prices gained on Monday on reports that Pakistan has placed orders with Punjab traders for the root variety.This led to booking of more orders from traders in Punjab and New Delhi even as arrivals were far below expectations. Punjab and Delhi traders quoted higher price not only for fulfilling orders, but also for the quality. They quoted Rs 700 a quintal more than last week. Over 1,500 bags of the root variety were sold at a higher price.He said that exporters and other traders would get new orders from North India within a week at the same price, give or take Rs 100. On Monday, 80 per cent of the arrivals was sold, of which half was bought by stockists.Because of the arrival of the super fine variety of Salem hybrid turmeric, its price increased to Rs 7,585 a quintal. (Source: Business Line)

Additional Margin in Castor Seed (CASTORSEED) Contracts

Bye-laws, Rules and Regulations of the Exchange, Additional Margin of 5% (in cash) on both the Long side and Short side will be imposed on all running contracts and yet to be launched contracts in Castor Seed with effect from beginning of day Wednesday, August 08, 2012. (Source: NCDEX)

Wheat exports by private traders may be banned

The government may ban wheat exports by private traders under open general licence despite having enough stocks to feed the country for two years due to concerns about high global prices and the drought-like situation back home that has triggered a 20% rise in wheat futures in a month. (Source: Economic Times)

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Commodities Daily Report

Tuesday| August 7, 2012

Agricultural Commodities
Chana
Chana futures declined on talks that there has been major raids in the pulses belt of Maharashtra. The Spot as well as the Futures settled 1% lower on Monday. As per the latest report form IMD, monsoon till 04 August 2012 were 18% below normal with Northwest India witnessing highest deficiency. This has led to concerns over kharif pulses sowing and output. Although Chana is a Rabi crop, it also takes cues from monsoon and sowing progress of Kharif crops. The Cabinet Committee on Economic Affairs yesterday approved the Minimum Support Prices (MSP) for Arhar (Tur) and Moong for 2012-13 season. The MSP for Arhar has been fixed at Rs.3850 per quintal and of Moong at Rs.4400 per quintal marking an increase of Rs.650 per quintal and Rs.900 per quintal respectively. Government released fourth advance estimates wherein it revised upward Chana output at 7.58 mn tn from 7.4 mn tonnes estimated in the third advance estimates and 8.22 mn tn in 2010-11.
th

Market Highlights
Unit Rs/qtl Rs/qtl Last 4950 4725 Prev day -1.00 -0.98

as on Aug 06, 2012 % change WoW MoM 5.04 7.16 2.74 4.14 YoY 56.63 44.72

Chana Spot - NCDEX (Delhi) Chana- NCDEX Aug '12 Futures

Source: Reuters

Technical Chart - Chana

NCDEX Sept contract

Sowing progress and demand supply fundamentals

According to the Ministry of Agriculture 72.79 Lakh hectare area has been planted under Kharif pulses as on 3rd August, 2012 compared to 87.53 lakh hectare (ha) same period last year, a decline of 16.84% . Sowing is reported lower mainly in Rajasthan. Rajasthan Agriculture Department states that planted area under Kharif Pulses is down at 8.93 lakh hectares ha compared to 19.35 lakh ha same st period last year. (Dated 1 August, 2012). Acreage may remain lower as farmers in Rajasthan may shift to other lucrative crops. However, in AP and Maharashtra, Kharif sowing is up by 5% and 0.2%. According to the Fourth advance estimates, Pulses output is pegged at 17.21 mn tn in 2011-12 compared with 18.24 mn tn produced in the year 2010-11. While Chana output in 2011-12 is estimated at 7.58 million tones, Tur is estimated at 2.65 million tones, Urad is estimated at 1.83 million tones, Moong is estimated at 1.71 million tones. As per the latest release, Ministry of Commerce & Industry revealed that 20.23 lakh tones of peas, 2.03 lakh tons of Chana, 4.32 lakh tons of Urad & Moong, 1.12 lakh tons of Masoor and 4.26 lakh tons of Tur has been imported by India during April11-March 12. India's consumption of pulses is on the rise with an annual growth of around 5% but production is seen lower, which may lead to increase in imports this year. However, rupee weakness may turn import costlier. Around 74% of Indian chickpea imports come from Australia.
Contract Chana Sept Futures Unit Rs./qtl Support 4740-4795 Resistance 4890-4925
Source: Telequote

Technical Outlook

valid for Aug 7, 2012

Outlook
Chana prices may are expected to trade on a positive note on account of tight supplies and comparatively strong demand amid festive season. However, if government takes some measure to curb the rising prices of Pulse, like imposition of stock limits, prices might come under downside pressure. In the medium term to long term, the trend remains positive as supplies may not be sufficient to meet the rising demand of the commodity. Also lower sowing of kharif pulses may support chana prices.

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Commodities Daily Report

Tuesday| August 7, 2012

Agricultural Commodities
Sugar
Sugar futures witnessed sharp correction on account of increase in the th initial margin, effective 6 August onwards. However, the Spot continued to trade higher and settled 0.63% up on Monday amid good demand coupled with poor rains. According to a circular issued by FMC a Minimum Initial Margin of 10% of the value of the contract or VaR based margin whichever is higher will be imposed on all running contracts and yet to be launched contracts of Sugar with effect from beginning of trading day Monday, Aug 06, 2012. The Government has decided to convert levy sugar stock for the sugar seasons 2008-09 and 2009-10 to the extent of 2.66 lakh MT into non-levy sugar to be sold by the concerned sugar mills by August.2012. This would make available an additional non-levy sugar quantity of about 2.66 lakh MT for sale by August 2012 apart from the 45 lakh tonnes quarterly quota for July-Sep. (PIB) Although government is trying to increase supplies, festive season demand is restricting the downside in the prices. The government increased the FRP on sugarcane in the new season starting October 1 to Rs 170 per quintal, from Rs 145 per quintal in the current season. With 22% below normal rains so far in the current season in the major growing areas of Maharashtra, UP and Karnataka, sugarcane yield is expected to decline thereby, raising concerns over next years sugar output. In the international markets Liffe white sugar as well as ICE raw sugar settled 0.31% and 0.77% lower Monday.

Market Highlights
Unit Sugar Spot- NCDEX (Kolkata) Sugar M- NCDEX Aug '12 Futures Rs/qtl Last 3945

as on Aug 06, 2012 % Change Prev. day WoW 0.63 10.97 MoM 19.53 YoY 30.40

Rs/qtl

3515

-2.98

4.02

15.25

29.04

Source: Reuters

International Prices
Unit Sugar No 5- LiffeOct'12 Futures Sugar No 11-ICE Oct '12 Futures $/tonne $/tonne Last 607.7 485.11

as on Aug 06, 2012 % Change Prev day WoW -0.31 -0.77 -2.02 -4.25 MoM -5.02 #N/A YoY -17.47 -20.59

Source: Reuters

Technical Chart - Sugar

NCDEX Sept contract

Domestic Production and Exports

As on 3 August, 2012, the area under sugarcane is estimated at 52.88 lakh ha, up from 50.59 lakh ha on same period a year ago. Despite of higher acreage, the producers body has estimated next years output lower at 25mn tn, down by 1mn tn compared to the current year. Sugar production in India the worlds second-biggest producer touched 26 million tonne since October 1, 2011. With the opening stocks of 6.8 mn tonnes, domestic Sugar supplies are estimated at 32-33 mn tn against the domestic consumption of around 22.5-23 mln tn for 2012-13 season.
rd

Source: Telequote

Technical Outlook
Contract Sugar Sept NCDEX Futures Unit Rs./qtl

valid for Aug 7, 2012 Support 3465-3510 Resistance 3600-3635

Global Sugar Updates

According to Unica, Mills in Brazil's main center-south cane region produced 9.32 mn tn of sugar since April, down 22 percent from a year ago, With a return to a normal weather pattern, cane harvesting is in full swing. While sugar output reached 2.63 mn tn in the first two weeks of July, up 2% from a year ago. Brazil's exports of raw sugar fell to 1.29 million tonnes in June, down by 30% from 1.85 million tonnes a year earlier. The global sugar surplus remains on target to fall in 2012/13 season, though declines will be less than previously suggested, while adverse weather in several producers may stop prices dropping far below recent levels. (Source: Reuters) According to the International Sugar Organization (ISO), the global sugar surplus is forecast to halve to around 3 mln tn in 2012/13 (OctoberSeptember) from a surplus of 6.5 million tonnes in 2011/12).

Outlook
Sugar prices may open lower initially expecting government to take some measures to curb the rising price of Agri commodities. However, prices may bounce back from support levels considering good demand amid festive season. Overall outlook of sugar remain positive on account of expected lower yield in one of the major producing state,

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Commodities Daily Report

Tuesday| August 7, 2012

Agricultural Commodities
Oilseeds Soybean: Soybean August contract as well as spot settled higher
amid supply shortage of oilseed in the short term. However, October contract witnessed sharp fall considering higher acreage and good rains in the major soybean growing belt of MP. The Spot as well as the Futures settled 1.05% and 1.02% higher on Monday. There are also talks that poultry industry is seeking actions on oil meal exports from India to ease domestic supplies. The factor that is supporting the upside in the long term is the international market which has again bounced back after witnessing correction in the last week. In the international markets CBOT corrected sharply and settled 2.94% lower on Monday due to rains over the weekend across most of the U.S. Midwest corn and soybean growing region, and forecasts for more rain this week. According to the weekly US crop progress report, USDA rated the U.S. soybean crop as 29 percent good-toexcellent, steady with a week ago. In the domestic markets, as on 3 August Oilseeds have been sown in 145.17 lakh hectares so far, compared with 149.98 lakh hectares same period last year. Soybean area is higher at 103.2 lakh hectares. In 2011-12 season, soybean was sown under 102.9 lakh hectares area and recorded 12.28 million tonne output, down from 12.73 mn tn in 2010-11 season. Indian acreage may touch record high levels this year as farmers have opted for this remunerative crop across India.
rd

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Aug'12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soyoil- NCDEX Aug '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 4520 4550 777.4 779.1

as on Aug 06, 2012 % Change Prev day 1.05 1.02 -0.54 -0.90 WoW -1.57 1.69 -0.07 0.03 MoM 5.98 5.50 0.44 -0.33 YoY 89.68 86.99 17.03 17.41

Source: Reuters

as on Aug 06, 2012 International Prices Soybean- CBOTAug'12 Futures Soybean Oil - CBOTAug'12 Futures Unit USc/ Bushel USc/lbs Last 1608 51.48 Prev day -2.94 -1.08 WoW -6.85 -2.07 MoM 9.28 0.23 YoY 16.53 -10.16

Source: Reuters

Crude Palm Oil

% Change Unit
CPO-Bursa Malaysia Aug '12 Contract CPO-MCX- Aug '12 Futures

as on Aug 06, 2012

Last 2888 564.3

Prev day -0.31 -0.44

WoW -3.09 -0.18

MoM -7.85 -1.02

YoY -15.06 15.16

Refined Soy Oil: NCDEX Soy Oil and MCX CPO settled lower on
Monday taking cues from the Malaysian supplies which are higher due to seasonally higher yield during this period. Malaysian palm oil board would release its report on stocks exports and production later this week. Malaysian palm oil Production has risen consistently since March 2012 and expected to go as high as 1.9 mn tn in September. On the other hand, exports have fallen 14.8 percent in July to below 1.23mn tonnes compared to 1.45mn tonnes a month ago due to a lull in Asian demand. India imported 124,125 tonnes of refined palm oil in June, down nearly 25 percent from May. Total vegetable oil imports in June were 783,315 tonnes, down 12.7 percent from 896,921 tonnes in the previous month, the data from the Solvent Extractors' Association (SEA) showed.

MYR/Tonne Rs/10 kg

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Aug '12 Futures Rs/100 kgs Rs/100 kgs Last 4313 4361 Prev day -0.98 -1.45

as on Aug 06, 2012 WoW 2.42 1.70 MoM 4.28 4.53

Source: Reuters

YoY 46.19 47.13

Technical Chart Soybean

NCDEX Oct contract

Rape/mustard Seed: NCDEX mustard seed futures settled lower

on profit booking. The Futures settled 1.45% lower while spot settled 0.98% lower on Monday. However, fundamentals remain supportive on account of good demand of mustard seed for crushing. Due to a sharp rise in the Soybean and thereby Soy meal prices, the demand for mustard meal has increased in the past few days while supplies continue to remain tight. According to a circular issued by NCDEX, existing Special Cash Margin of 5% on the Long side shall be increased to 15% on all the running and yet to be launched contracts w.e.f beginning of 18/07/2012.

Source: Telequote

Technical Outlook
Contract Soy Oil Sept NCDEX Futures Soybean NCDEX Oct Futures RM Seed NCDEX Sept Futures CPO MCX Aug Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl

valid for Aug 7, 2012 Support 774-781 3844-3885 4345-4385 556-561 Resistance 790-795 3988-4035 4485-4528 568-573

Outlook
Soybean September contract may witness downside pressure on account of higher area under cultivation and expected higher yield of soybean due to good rains in MP. However, in the current week market will also take cues from the USDA monthly crop report which is expected to revise down soybean output further. Thus, sharp downside may be capped.

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Commodities Daily Report

Tuesday| August 7, 2012

Agricultural Commodities
Black Pepper
Pepper Futures traded on a mixed note yesterday. Lower demand for Indian pepper in the international markets failed to attract buyers and pressurized the prices. However, low stocks in the domestic markets supported the prices at lower levels. The Spot settled as well as the Futures settled 0.55% and 0.19% lower on Monday. th According to the circular released on June 13 2012 the existing Special margin of 10% (cash) on the long side stands withdrawn on all running contracts and yet to be launched contracts in Pepper from beginning of day Friday June 15, 2012. Pepper prices in the international market are being quoted at $8,400/tonne(C&F) while Vietnam was offering its produce at $6,000/tonne for 500 GL. Brazil was offering its pepper at $6,150/tonne for the B-Asta grade. As per circular dt. 29/06/2012 issued by NCDEX, Hassan will be available as an additional delivery centre for all the yet to be launched contracts. (not applicable to the currently available contracts-till Dec 2012 expiry).

Market Highlights
% Change Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Aug '12 Futures Rs/qtl Rs/qtl Last 42637 43595 Prev day -0.55 -0.19

as on Aug 06, 2012 WoW -0.69 -2.43 MoM 3.10 2.77 YoY 32.93 30.41

Source: Reuters

Technical Chart Black Pepper

NCDEX Sept contract

Exports
According to Spices Board of India, exports of pepper in April 2012 fell by 47% and stood at 1,200 tonnes as compared to 2,266 tonnes in April 2011. India imported 1,848 tonnes of pepper till March 2012 and has become the third country to import such large quantity after UAE and Singapore. (Source: Agriwatch) According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of black pepper in 2012 are forecasted at around 1,25,000 tonnes. Exports of Pepper from Vietnam during January till June 2012 is estimated around 73000 mt 73,000 mt, higher by 4.3% in volume and 31.7% in value compared to corresponding year last year. Exports of Pepper from Brazil during January till May 2012 are estimated around 13369 mt. (Source: Peppertradeboard). Pepper imports by U.S. the largest consumer of the spice declined 14.8% in the first 2 months of the year (2012) to 8810 tn as compared to 10344 tn in the same period previous year. Imports of Pepper in the month of February declined by 16.8% to 3999 tn as compared to 4811 tn in the month of January 2012. Exports from Indonesia posted significant decrease of 42% as compared to previous year. Exports stood at 36,500 tonnes as compared to 62,599 tonnes in the last year. During May 2012 Brazil exported 1,705 tonnes of pepper as against 1600 tn in May 2011.

Source: Telequote

Technical Outlook
Contract Black Pepper NCDEX Sept Futures Unit Rs/qtl

valid for Aug 7, 2012 Support 43280-43575 Resistance 44200-44525

Production and Arrivals

Arrivals of pepper in domestic market stood at 7 tonnes while offtakes were 5 tonnes on Monday. Global Pepper production in 2012 is expected to increase 7.2% to 3.20 lakh tonnes as compared to 2.98 lakh tonnes in 2011 with sharp rise of 24% in Indonesian pepper output and in Vietnam by 10%. According to latest report pepper output in Vietnam is estimated to be 1.35 lakh tonne as compared to 1.10 lakh tonne estimated early in the beginning of year (2012). Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Pepper trade board) On the other hand production of pepper in India in 2011-12 is expected to decline further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year. Production is lowest in a decade.

Outlook
Pepper prices in the intraday trade sideways, but may recover later as lower stocks in the domestic markets as well as buying ahead of the festive season may support prices. On the other hand reports of fresh arrivals from the Indonesia and Malaysia might cap sharp gains in the short term.

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Commodities Daily Report

Tuesday| August 7, 2012

Agricultural Commodities
Jeera
Jeera Futures opened lower yesterday on increasing arrivals in the domestic markets as farmers/stockists were selling stocks at higher levels. However, prices recovered later in the day due to good export demand. Due to the supply concerns from Syria and Turkey, large export orders have been diverted to India. The spot as well as the Futures settled 0.48% and 0.77% lower on Monday. Expectations are that large export orders may be diverted to India from the international markets due to the ongoing civil war in Syria which is hampering supplies. Export demand from Bangladesh, Pakistan and other countries may support the prices at lower levels. Production in Syria and Turkey is being reported around 1,000 tonnes and around 5,000 tonnes, lesser than expectations. Jeera prices in the international market of Indian origin are being offered at $2,9002950/tn (c&f) while Syria and Turkey are not offering their produce. Carryover stocks of jeera in the domestic market is expected to be around 7-8 lakh bags as compared to 4-5 lakh bags in the last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Aug '12 Futures Rs/qtl Rs/qtl Last 16500 16405 Prev day -0.48 -0.77

as on Aug 06, 2012 % Change WoW 3.15 6.80 MoM 10.89 11.13 YoY 5.38 4.03

Source: Reuters

Technical Chart Jeera

NCDEX Sept contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 15,000 bags, 7,000 bags higher compared to previous day while off-takes stood at 14,000 bags on Monday. Production of jeera in 2011-12 is expected to be around 40 lakh bags as compared to 29 lakh bags in 2010-11 (each bag weighs 55 kgs). (Source: spot market traders). According to Spices Board of India, exports of Jeera in April 2012 stood at 2,500 tonnes as compared to 2,369 tonnes in April 2011, an increase of 6%.

Source: Telequote

Outlook
Jeera prices are expected to continue to move up due to increasing export demand. However, sharp gains may be capped if the arrivals in the domestic markets increase. In the medium to long term (AugSeptember 2012) prices are likely to witness a bounce back as there are limited stocks with Syria and Turkey and crop there is 30% short as compared to last year.

Market Highlights
Prev day 9.01 1.94

as on Aug 06, 2012 % Change

Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Aug '12 Futures Rs/qtl Rs/qtl

Last 5776 6106

WoW 10.64 7.09

MoM 38.88 34.55

YoY -9.92 5.82

Turmeric
Turmeric Futures traded on a bullish note yesterday on lower rainfall in the turmeric growing region and lower sowing of turmeric this season. The Spot traded very bullish as it reopened after local holidays. Rainfall in Nizamabad is 21% lower than the normal as on 1/8/2012. Turmeric has been sown in 0.4 lakh hectares in A.P as on 1st August 2012. The Spot as well as the Futures settled 9% and 1.94% higher on Monday. As per circular issued by NCDEX, no fresh positions will be allowed in respect of Turmeric August 16, 2012 expiry contract from August 07, 2012 till the expiry of the contract.Only squaring up of existing positions will be allowed. The pre expiry margin on Turmeric has been increased to 5% for last 7 trading days increased on a daily basis on both buy and sell side from the existing 3% on daily basis for last 5 days.

Technical Chart Turmeric

NCDEX Sept contract

Production, Arrivals and Exports

Arrivals in Erode and Nizamabad mandi stood at 5,000 bags and 2,000 bags respectively on Monday. Turmeric production for the year 2011-12 is projected at historical high of 90 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 201011. Erode is expected to produce 55 lakh bags of turmeric a rise of 29% as compared to previous year. According to Spices Board of India, exports of Turmeric in April 2012 increased by 1% at 7,300 tn as compared to 7,230 tn in April 2011.
Source: Telequote

Technical Outlook
Unit Jeera NCDEX Sept Futures Turmeric NCDEX Sept Futures Rs/qtl Rs/qtl

valid for Aug 7, 2012 Support 16555-16750 6380-6480 Resistance 17100-17370 6720-6830

Outlook
Turmeric prices are expected to continue to trade higher as farmers are unwilling to sell their produce at lower levels. however, prices may correct as no fresh positions will be allowed in the August contract. In the medium to long term (Aug to September) prices may take cues from the sowing figures.

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Commodities Daily Report

Tuesday| August 7, 2012

Agricultural Commodities
Mentha Oil
Mentha oil Futures traded on a positive note yesterday as stockists have been buying anticipating good demand from the pharmaceutical companies in the coming days. However, prices corrected towards the end on account off profit booking. The spot settled 0.77% higher while the Futures settled 0.80% lower Monday. Total Special Cash margin of 25% on the long side of Mentha Oil has been reduced to 10% in the May contract and 5% in June contract onwards from May 5, 2012. For detailed reference please refer to the Circular No: MCX/T&S/180/2012 dated 03/05/2012.

Market Highlights
Unit Mentha Oil- MCX Spot (Chandausi) Mentha Oil MCX July Futures Rs/qtl Rs/qtl Last 1539 1389 Prev day 0.77 -0.80

as on Aug 06, 2012 % Change WoW 4.86 5.97 MoM 14.53 12.61 YoY 37.10 23.71

Source: Reuters

Production, Arrivals and Exports

According to spot market sources, the overall acreage is estimated to increase from 1.75 lakh ha to 2.1 lakh ha this year. The overall production of Mentha is expected to increase by 30% - 40% as compared to last year. Arrivals of the fresh crop have started in the main sowing regions and currently stand around 1200 drums (each drum weighs 180 kgs). Exports of Mentha during April 2011 to January 2012 witnessed a decline of 6% to 12,850 tonnes as compared to 13,550 tonnes in the same period last year.

Technical Chart Mentha Oil

MCX Aug contract

Outlook
In the intraday trading session Mentha oil is expected to trade on a positive note. Demand from the stockists may also support the prices at lower levels. In long to medium term (July-September) prices are likely to remain under pressure due to peak arrival period.

Source: Telequote

Potato
In intraday potato Aug futures settled 2.97% lower owing to squaring off of positions due to start of staggered delivery expiry. As per MCX and NCDEX circular, existing Special Margin of 15% (in cash) on the Long side shall be increased to 30%(in cash) and Special Margin of 5% (in cash) on the Short side shall be imposed on all the running contracts in Potato Agra and Tarkeshwar with effect from 01-08-2012 and no fresh positions shall be allowed during the Staggered Delivery period in all running contracts of Potato. Only squaring off of existing positions will be allowed during the Staggered Delivery period.

Market Highlights
Prev day 0.52 -2.07

as on Aug 06 2012 % Change

Unit Potato SpotNCDEX (Agra) Potato- NCDEX Aug '12 Futures Rs/qtl Rs/qtl

Last 1190 1181

WoW 1.32 -7.26

MoM #N/A 7.31

YoY 186.36 227.18

Technical Chart Potato

NCDEX Sept contract

Production and Arrivals Scenario

Around 200-220 lakh MT potato had been stored in the country in different cold storages during the current season. Although 27-30% of the cold storage stocks are released so far from overall producing belts, they are much lower compared to normal 35-38% every year. According to NHRDF, The sowing of potato seed for Kharif production in Karnataka completed but the area sown is adversely affected due to less and delayed rains. The sowing in hills of Himachal Pradesh, Uttarakhand and Jammu and Kashmir are also completed. The seed sowing in Maharashtra for Kharif is continued, which is delayed due to delay arrival of monsoon, which is still scanty. The area for Kharif is expected to be less or may be same with delayed planting compared to last year, but it depends on further rains. With reports of crop damages in Karnataka, the supplies from this region to other states may also be affected as the overall output is expected to decline by 70-75%. In fact, the state may have to rely on the supplies from the north Indian markets.

Source: Telequote

Technical Outlook
Unit Mentha Oil Aug Futures Potato NCDEX Sept Futures Potato MCX Sept Futures Rs/kg Rs/qtl Rs/qtl

valid for Aug 7, 2012 Support 1360-1374 1300-1310 1330-1345 Resistance 1412-1431 1330-1350 1370-1832

Outlook
Potato futures in intraday may remain sideways as traders are adopting wait and watch policy expecting government to take some measures to curb the prices. Upcoming festive season might provide support to the prices in Medium term.

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