daily agri report, may 08

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Commodities Daily Report

Agricultural Commodities

Wednesday| May 08, 2013

www.angelcommodities.com

Content

News & Market Highlights

Chana

Sugar

Oilseed Complex

Spices Complex

Kapas/Cotton

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Market Highlights (% change) as on May 07, 2013

Last Prev. day WoW MoM

Sensex 19889 1.09 1.97 0.78 1

Nifty 6044 1.21 1.91 0.74 1

INR/$ 54.07 -0.13 0.71 0.43 Nymex Crude Oil - $/bbl 95.62 -0.56 2.31 1.73 -

Comex Gold - $/oz 1449 -1.30 -1.58 -1.27 -1

.Source: Reu

India’s fertiliser asset hunt yields no harvestIndia’s bid to acquire fertiliser assets in at least a dozen countries ov

the past two years has come a cropper. Not one project, coveted direct

by the centre, state-run or private companies, has been bagged. This h

put a big question mark on the government’s efforts to insulate t

country against global price volatility in fertilisers and its impact

subsidy outgo and supply of nutrients. India pays a huge subsidy bill of

1,00,000 crore on fertilisers annually. Though the prime minister’s tea

has been directly lobbying for projects abroad, success has eluded them

What came in the way was political risks, environmental concerns, lackfiscal incentives, raw materials or gas for these projects. Be it ure

potash, rock phosphate, ammonia or phosphoric acid, not one overse

project has come India’s way. (Source: Financial Chronicle)

Indian cane, cotton farmers pray for rains to end multi-ye

droughtWith the countdown to India's monsoon underway, farmers in parch

western and southern states are desperate for plentiful and timely ra

to help the region recover from its worst drought in four decades. T

country's biggest sugar and cotton producing states, Maharashtra a

Gujarat, are in this region and if they have another year of poor rains

some experts have hinted - shortages in India could raise global prices f

the commodities. India's monsoon season starts around June 1. T

southern and western region, which is the size of southern Europe,already wilting as temperatures hit 47 degrees Celsius in some area

Even a fortnight's delay in the rains could spell disaster. India is one

the world's biggest producers of sugar, grains and cotton. The monsoo

is crucial for around 55 percent of its farmland, which lacks irrigatio

and can often mean the difference between the country being

exporter or importer of staples. ( Source: Reuters)

Sweet season for cane farmers crushing time for industryThe sugarcane crushing season which is nearing its end in UP, has

many ways been unprecedented this year. The 40,000 farmers in t

state are happy despite the fact that the season is still a few days aw

from being officially closed & the sugar factories still owe the farmers

whopping Rs 6533.19 crores as dues. At 74.6 lakh tone, the sug

production in India this season is the 2nd

highest ever since 2006-

season. (Source: Financial Express)

India's cheap food plans to prove costly for governmentIndia may soon pass a new law to give millions more people cheap foo

fulfilling an election promise of the ruling Congress party that could co

about $23 bn a year and take a third of annual grain production. T

National Food Security Bill, which aims to feed 70% of the populatio

could widen India's already swollen budget deficit next year, increasi

the risk to its coveted investment-grade status. The ambitious bill,

priority for Congress President Sonia Gandhi, will raise India's annu

food subsidy spending by 45%. It promises wheat and rice at a fraction

the cost to some 810 mn people, expanding current handouts to rough

318 mn of India's poorest. Critics say the food bill is little more than

attempt to help Congress, reeling from corruption scandals, win r

election in a vote expected by next May. (Source: Reuters)

News in brief Government lowers wheat procurement target by 25% to 33mtWith private players aggressively buying wheat directly from farmers, the

Government today revised its procurement target downward by 25% to

33 mt for the 2013-14 marketing year, which will help the Centre save

about Rs 3,000 crore. In view of the higher output, the Government had

pegged wheat procurement at a record 44.12 mt in the currentmarketing year that started in April, as against 38.1 mt last year.

According to the revised estimate, the Government is expected buy 11

mt in Punjab, 7 mt in Haryana, 9 mt in Madhya Pradesh, 3 mt in Uttar

Pradesh and 2.5 mt in Bihar this year. The expected drop in wheat

procurement will reduce the burden on storage and help the

Government save about Rs 3,000 crore, thereby bringing down the

overall Food Subsidy Bill, the official said. The reasons for lower

procurement, the official said unlike in previous years, private players

such as roller millers have stepped up their wheat buying directly from

farmers because they have realised from the last few years’ experience

that they would not get cheaper grain under the Government’s open

market sale scheme (OMSS) later. ( Source: Business Line)

Farm Sector to lose 4 millionn workersThe country’s agricultural sector is projected to lose 4 mn workers in the

12th

plan period, the Govt told parliament on Tuesday. As per 11th

five

year plan document of the planning commission, the agricultural sector is

projected to contribute no increase in the 11th

plan and a net decrease of

4 mn agriculture workers in the 12th

plan period. There is no potential for

massive increase in agriculture sector. However, the indirect

employment is likely o increase with rise in farm production particularly

in agro processing & support infrastructure. (Source: Financial Express)

India to be world’s top rice exporter for second straight yearIndia could export 8.3 mn tons of rice this year, making it the world’s

leading rice exporter for two years in a row, the FAO said today. India last

year surpassed Thailand as the top exporter for the first time in three

decades, shipping 10.3 mn tons of milled rice compared with Thailand’s7.0 mn. The FAO’s Rice Market Monitor report projected Asia’s rice

production in 2013 to rise 2.2 per cent, to 452 mn tons of milled rice. The

FAO attributed the increased production to good weather and

Government price supports for farmers in India and Thailand. It

estimated that India’s stockpile would reach 22 mn tons by year-end

2013, down 7.6 per cent from 2012, while Thailand’s will reach 16.3 mn

tons, up 29 per cent from 2012. (Source: Business Line)

Rs. 4995 crore centre subsidy to provide ration sugar at existing

ratesProf. K.V.Thomas, Minister of Consumer Affairs, Food and Public

Distribution has informed Lok Sabha today that the Central Government

is providing subsidy for distribution of sugar through fair price shops in

the Targeted Public Distribution System (TPDS) at a uniform Retail Issue

Price (RIP) throughout the country. He said that the Central Government

has considered the recommendations of Dr. C. Rangarajan Committee on

de-regulation of sugar sector on 4.4.2013 and, has, inter-alia, decided to

do away with levy obligation on sugar mills. However, to make sugar

available in the TPDS at the existing RIP of Rs.13.50 per kg., the Central

Government would reimburse the subsidy @ Rs.18.50 per kg, limited to

the quantity based on the States/UTs existing allocations. Considering

that the States /UTs quota is about 27 lac tons, the total subsidy would

amount to approximately Rs. 4995 crores. Prof. Thomas further said that

under the new dispensation, State Governments/UT Administrations

would procure sugar in a transparent manner from the open market and

claim subsidy from the Central Government for the quantity distributed

in the TPDS. The guidelines for claiming subsidy are being framed and

would be issued shortly.( Source: Press Information Bureau, GOI)







Market Highlights as on May 07, 201

% change

Unit Last Prev day WoW MoM

Chana Spot - NCDEX

(Delhi)

Rs/qtl 3400 0.00 0.00 -3.55 -

Chana- NCDEX

May'13 Futures

Rs/qtl 3398 0.74 -0.99 -3.08 -

Source: Reut

Technical Chart - Chana NCDEX June contract

Source: Teleq

Technical Outlook valid for May 08, 201

Contract Unit Support Resistance

Chana May Futures Rs./qtl 3410-3445 3500-3525

ChanaChana June futures recovered from lower levels yesterday on account of

short coverings and settled 0.52% higher. Stockists buying at lower levels

supported prices. There are reports of lower yield in MP due to

unseasonal rainfall in February. Prices have declined sharply over the last

few weeks on account of supplies of the new crop coupled with higher

output estimates. Demand from stockists also remains dull.Higher supplies of the new crop from the major producing states such as

Madhya Pradesh, Rajasthan and Maharashtra is seen pressurizing prices

in the physical markets.

However, concerns over the yield in Madhya Pradesh, the largest chana

producing state, due to unfavorable weather conditions has been seen

supporting prices at lower levels. Chana prices may find support at lower

levels as stockists will build inventories at lower levels to meet the

demand for the entire season.

Demand supply scenario

Higher returns earned in 2012, coupled with a hike in minimum support

prices (MSP), have helped expand overall acreage in 2012-13 season. The

Centre has hiked the MSP by 14 per cent to Rs 3,200 a quintal for chanaand as part of its strategy to encourage farmers to grow more pulses to

reduce import dependence.

Chana sowing in the current season is 5.65% higher at 95.17 lakh ha

compared to previous year. Acreage is up in Rajasthan, Maharashtra, MP

and AP at 15.7 lakh ha, 12.53 lakh ha, 32.99 lakh ha and 7.33 lakh ha

respectively.

According to third advance Estimates released on 3rd

May 2013, Total

pulses output for 2012-13 season has been pegged at 18 mn tn, up 5.76%

compared to previous year. The target for 2012-13 pulses crop output

was set at 18.24 million tonne during the year. Out of the total pulses

output, kharif output is estimated at 4.03% lower at 5.95 mn tn while

rabi pulses output is pegged 9.25% higher at 12.05 mn tn compared with

the final estimates of 2011-12.

Chana output is pegged marginally lower to 8.49 mn tn compared with

its second advance estimates of 8.57 million tonnes. However,Chana

output is expected to breach its 2010-11 record of 8.2 mn tn in 2012-13.

Erratic weather in M.P. lowered the yield.

Assocham estimates, 21 mn tn of pulses demand in 2012-13 and is likely

to reach at 21.42 mn tn in 2013-14 and 21.91 MT in 2014-15. (Source:

Agriwatch).

Trade Scenario

According to IBIS, imports of chana in the month of February declined to

0.46 lakh metric tonnes compared to 2.31 lakh metric tonnes during the

previous month.

India imports Chana mainly from Australia and Canada and higher

availability in these countries at comparatively cheaper rates is seen

boosting imports of Chana to meet the domestic shortfall.

In Australia, total chickpea production in 2012 –13 is estimated to have

increased to a record 713000 tones as compared with 485000.

Outlook

We expect Chana prices to continue to decline today. Increasing arrivals

of the new crop may pressurize prices at higher levels. However, value

buying is expected emerge at lower levels. Improvement in demand from

stockists may also support prices at lower levels. Overall output in the

current season is comparatively higher and thus no major upside is

expected over a medium term.







Market Highlights as on May 07, 2013 % Change

Unit Last Prev. day WoW MoM Yo

Sugar Spot- NCDEX

(Kolhapur) Rs/qtl 3041 -0.05 0.35 -0.90

Sugar M- NCDEX

May '13 Futures Rs/qtl 2928 0.48 -0.34 0.93

Source:

International Prices as on May 07, 2013

% Change


Sugar No 5- Liffe-

May'13 Futures

$/tonne 494 -0.56 -2.20 -2.06

Sugar No 11-ICE

May '13 Futures

$/tonne 392.00 -0.95 -0.17 -0.17

.Source:

Technical Chart - Sugar NCDEX June contract

Source: Te



Sugar May NCDEX Futures Rs./qtl 2920-2940 2970-2980

SugarSugar June Futures traded on a flat note yesterday. Prices made a fresh

contract low of Rs. 2945 in early trades as higher supplies from mills have

been seen offsetting the summer demand. However, improvement in

demand from the bulk consumers supported prices at lower levels. Sugar

prices in the domestic markets are consolidating at lower levels. The spot

as well as the June Futures settled 0.05% and 0.03% lower on Tuesday.

The Government has cleared the partial decontrol of sugar in April.

According to this, the government will now have to buy sugar from the

mills at open market prices. Also the release mechanism will be done

away with, after September 2013. States will decide on the FRP of cane.

Indian sugar mills produced 23 million tonnes of the sweetener between

Oct. 1 and March 31, about 2 percent less than a year earlier.

The Central Government has decided to make available quantity of 104

lakh tons of sugar, as non-levy quota for open market sale, for the 6

months of April, 2013 to September, 2013.

Domestic Production and Exports

According to ISMA, India’s Sugar production between October-

April stood at 24.52 mn tn, lower by 3% during the same periodlast year. Maharashtra’s production dipped 10% to 8 mn tn while

production in Uttar Pradesh increased by 7% to 7.43 mn tn.

India is likely to produce 24.6 mn tn of sugar in 2012-13 year ending on

Sept. 30, higher than the previous estimate of 24.3 mn tn, the Indian

Sugar Mills Association (ISMA) said last week.

With the opening stocks of 6.5 mn tn, domestic Sugar supplies are

estimated at 30.8 mn tn against the domestic consumption of around 22.

5 mln tn for 2012-13. Exports are not viable as international prices have

also declined significantly.

A severe drought in top sugar producing Maharashtra state has been

affecting new plantation and is likely to affect on sugar production in the

year starting from Oct. 1, 2013.Global Sugar Updates

Liffe sugar as well as ICE Raw Sugar settled 0.56% and 0.95% lower on

Tuesday, on account of higher supplies from Brazil. Sugar prices in the

international markets are trading at their lowest levels in since July 2010

on account of a global surplus situation for the third consecutive year.

According to Unica, South-Central Brazil cane crush projected at 589.60

million tons for 2013/2014. Main center-south sugar cane crop will

produce a record 35.5 mn tn of sugar in the 2013/14 season, higher by

4.1% compared to 34.1 mn tn last year.

Heavy rain in the cane belt of top world sugar producer Brazil has slowed

early progress of an expected record cane harvest. Brazil's sugar

production will jump to a record level in the 2013/14 season just now

starting, with a surge in cane output from an expanded planted area,favorable weather and efforts to renew old and less productive cane

plants.

Expectations of abundant supplies from the 2013-14 harvest in the other

leading producers, such as Thailand, Mexico and the United States have

kept prices under pressure. Sugar prices are trading around 2½ year lows.

Outlook

Sugar is expected to trade on a mixed note today. Prices may consolidate

at lower levels over the next few days. Improvement in demand from the

bulk manufacturers will support prices at lower levels. A decline in sugar

production may also support prices at lower levels. However, supplies

will continue to remain high as millers will release stocks to clear cane

arrears. This will offset summer season demand.








% Change


Soybean Spot- NCDEX

(Indore)

Rs/qtl 4021 -0.25 -0.07 -0.57

Soybean- NCDEX May '13

Futures

Rs/qtl 4002 -0.12 1.77 -0.66

Ref Soy oil Spot-

NCDEX(Indore)

Rs/10 kgs 726.6 -0.99 -1.76 1.60

Ref Soy oil- NCDEX May

'13 Futures

Rs/10 kgs 712.9 -0.81 -0.90 0.03

Source: Reuter

as on May 07, 2

International Prices Unit Last

Prev

day WoW MoM

Soybean- CBOT-

May'13 Futures

USc/

Bushel 1464 1.32 -0.29 7.47

Soybean Oil - CBOT-

May'13 Futures

USc/lbs 49.09 0.82 -0.08 0.53 -

Source: Reuters

Crude Palm Oil as on May 07, 201

% Change

Unit Last

Prev

day WoW MoM

CPO-Bursa

Malaysia – May

'13 Contract

MYR/Tonne 2238 0.40 -0.49 -5.41

CPO-MCX- May

'13 Futures

Rs/10 kg 457.2 -0.02 -1.66 -1.27

Source: Re

RM Seed as on May 07, 20

Unit Last

Prev

day WoW MoM

RM Seed Spot-

NCDEX (Jaipur)

Rs/100 kgs 3388 -0.40 -2.26 -4.91

RM Seed- NCDEX

May '13 Futures

Rs/100 kgs 3379 -0.27 -2.14 -5.14

Source: Reuters

Technical Chart – Soybean NCDEX June contra

Source: Teleq



Soy Oil May NCDEX Futures Rs./qtl 680-683 690-694

Soybean NCDEX May Futures Rs./qtl 3840-3865 3915-3945

RM Seed NCDEX May Futures Rs./qtl 3390-3405 3445-3465

CPO MCX May Futures Rs./qtl 452-455 459-462

OilseedsSoybean: Soybean futures corrected from higher levels on account

of profit taking. However, poor supplies in the domestic markets

supported prices at lower levels. Gains have also been capped on

the back of IMD’s prediction of a normal monsoon. According to the

3rd

Advance Estimates, Soybean output is pegged at 14.14 mn

tonnes. The spot as well as the Futures settled 0.25% and 0.49%lower on Tuesday.

Special Margin (in Cash) of 10% on the Long side has be imposed in

Soyabean May 2013, June 2013 & July 2013 expiry contracts with

effect from beginning of day Tuesday, April 30, 2013.

India’s soy meal exports in April are likely to fall to 200,000 tonnes,

down 36 percent from a year ago, unless buying from Iran improves.

Exports of Soybean meal during March, 2013 was 3,20,265 tonnes as

compared to 4,61,892 tonnes in March, 2012 lower by 30.66% y-o-y.

International MarketsSoybean gained 1.32% on Tuesday on concerns over delays in

planting in the Midwest coupled with tight supplies of the old soy

crop. Farmer selling has slowed down. Expectations of lower ending

stocks in USDA’s Monthly crop report to be released next week alsosupported prices. Large South American crop coupled with forecasts

for US weather to improve in the coming week have capped sharp

gains. Sentiments remain weak on account of smooth supplies from

Brazil coupled with demand fears amid bird flu in China.

China’s soybean imports were reported at 3.98 mn tonnes in April

2013, lower by 18.4% in April last year, but marginally higher

compared to 3.84 mn tonnes in March. The decline is attributed to

delays in shipment from Brazil coupled with weak demand on the

back of outbreak of the bird flu.

Brazil's government lowered its forecast for the 2012/13 soybean

crop from 82.1mn tn to 81.9 mn tn.

Refined Soy Oil: Ref soy oil as well as MCX CPO settled 0.81% and

0.2% lower on Tuesday on account weak domestic soybean prices.

Indian government increased the base import price on crude

soybean oil by US $9 per tons to US $1103. Besides, base import

price on crude palm oil set at US $ 824 and reduced base import

price on palmolein crude as well as refined to US $ 864 per tons and

US $861 per tons.

Imports of all vegetable oils, including non-edible oils, fell 7.5 per

cent to 896,714 tn in March, pulled down by the drop in palm oil

imports. Palm oil imports dropped 12% to 708,262 tn in March.

Malaysia, the world's No.2 palm oil producer, set its crude palm oil

export tax for May at 4.5 percent, unchanged from April.

Exports of Malaysian palm oil products from April 1 to 25 increased

5.2% to 1,123,129 tonnes from 1,067,140 tonnes shipped during

March 1 to 25.

Rape/mustard Seed: Mustard June Futures declined by 0.49% on

Tuesday on account of higher supplies of the new crop. Sowing of

Mustard seed is up by 2.2% at 67.23 lakh ha. Agriculture ministry in

its third advance estimates, pegged mustard output at 7.36 mn tn,

up by 11.5%.

OutlookSoybean prices may trade on a mixed note. Positive international

markets as well as poor supplies in the domestic markets may

support prices. However, forecast of a normal monsoon coupled

with weak meal export demand may pressurize prices. Soy oil may

decline tracking weak soybean prices. CPO may gain tracking

positive KLCE prices. However, comfortable stock levels may cap

sharp upside.








% Change

Unit Last

Prev

day WoW MoM

Jeera Spot- NCDEX

(Unjha)

Rs/qtl 13375 -0.40 0.08 -1.83

Jeera- NCDEX May

'13 Futures

Rs/qtl 12650 -0.88 -1.84 -7.24 -

Source: Reu

Technical Chart – Jeera NCDEX June contract

Source: Telequ


% Change

Unit Last

Prev

day WoW MoM Yo

Turmeric Spot-

NCDEX (N'zmbad)

Rs/qtl 6009 -1.80 -7.03 -6.04 78.

Turmeric- NCDEX

May '13 Futures

Rs/qtl 5830 -3.99 -9.11 -11.21 56.

Technical Chart – Turmeric NCDEX June contrac

Source: Telequ

Technical Outlook Valid for May 08, 2013

Unit Support Resistance

Jeera NCDEX May Futures Rs/qtl 12500-12620 12940-1315

Turmeric NCDEX May Futures Rs/qtl 5780-5850 6010-6090

JeeraJeera June futures declined by 1.02% on Tuesday and hit a fresh

contract low of Rs. 12717.50 due to weak demand from the domestic

as well as international markets. Higher production estimates have

also pressurized prices. Good supplies from Rajasthan also pressurized

prices. However, arrivals have started to slow down from its peak,

supported prices at lower levels. Domestic as well as overseas demand

is expected to improve in the coming days. According to Gujarat State

Agri Dept. sowing in Gujarat is reported at 3.352 lakh ha in 2013compared with 3.719 lakh ha last year. According to the Rajasthan

State Budget 2013-14, it has exempted jeera from VAT.

Supply concerns from Syria and Turkey still exists. Expectations are

that export orders may still be diverted to India from the international

markets due to lack of supplies from Syria on back of the ongoing civil

war. Production in Syria and Turkey is being reported around 17,000

tonnes and around 4,000-5,000 tonnes, lesser than expectations.

Jeera prices of Indian origin are being offered in the international

market at $2,400-2,425 tn (FOB Mumbai) while Syria and Turkey are

not offering. Carryover stocks of Jeera in the domestic market is

expected to be around 8-9 lakh bags.

Production, Arrivals and Exports

Arrivals in Unjha were reported at 13,000 lakh bags on Tuesday.Production of Jeera in 2012-13 is expected around 38-40 lakh bags (55

kgs each), same as last year.

Exports of Jeera between Apr 2012- Jan 2013 stood at 64,400 tn, an

increase of up 86%. (Source: Factiva)

OutlookJeera Futures is expected to trade with a negative bias today. Higher

output and weak demand may pressurize prices. However, any

improvement in overseas as well as domestic demand may support

prices. Overall trend remain positive for the Jeera prices as they are

likely to stay firm as Syria & Turkey have stopped shipments.

Turmeric

Turmeric June Futures declined sharply and hit the lower circuit filteryesterday on higher supplies and huge carryover stocks. Domestic as

well as overseas demand is also reported to be weak. However, there

are expectations of improvement in overseas demand in June.

Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes

of turmeric earlier. The spot as well as the Futures settled 1.8% and

3.94% lower on Tuesday.

Production, Arrivals and ExportsArrivals in Erode and Nizamabad stood at 4,000 bags and 6,000 bags

respectively on Tuesday.

Expectations are that production may be lower by 40-50%. There are

reports of some crop damage in Erode region. Turmeric production in

2012-13 is expected around 45 lakh bags. Production in Nizamabad is

expected around 12 lakh bags. Production in 2011-12 is projected at

historical high of 10.62 lakh tn. It is estimated that next year’s

carryover stocks would be around 10 lakh bags.

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.

Outlook

Turmeric is expected to trade with a negative bias today. Weak

exports data coupled with higher supplies of the fresh crop and huge

carryover stocks may pressurize prices at higher levels. However,

export demand coupled with demand from stockists may support

prices at lower levels. Crop damage and output concerns may also

support prices at lower levels.







% Change

Unit Last Prev. day WoW MoM

NCDEX Kapas Apr

Futures

Rs/20 kgs 1039 -0.91 -1.66 13.06

MCX Cotton May

Futures

Rs/Bale 17960 -1.32 -0.61 -0.61

Source: R

International Prices as on May 07, 2

% Change


ICE Cotton USc/Lbs 86.01 0.82 0.56 -2.63

Cot look A Index 94.8 1.39 1.72 -0.94

Source: Re

Technical Chart - Kapas NCDEX April contract

Source: Te

Technical Chart - Cotton MCX May contract

Source: Te


Contract Unit Support Resistanc

Kapas NCDEX April ’14 Fut Rs/20 kgs 1020-1030 1050-1060

Cotton MCX May Futures Rs/bale 17700-17830 18050-181

KapasNCDEX Kapas as well as MCX Cotton settled 0.91% and 1.32% lower

respectively on Tuesday on expectations CCI and NAFED will offload

stocks in May after an unsuccessful bid to offload of 2.5 lakh bales of

cotton in April 2013.

However, prices recovered in the later part of the session and settled

higher on account of emergence of fresh demand at lower price levels.Also, firm international markets supported an upside in the prices.

The Cotton Corporation of India (CCI) and the National Agricultural

Cooperative Marketing Federation of India (NAFED) are expected to

offload over 8 lakh cotton bales (a bale weighs 170 kg) in the domestic

market this month and the asking price may be lower by Rs 1,000 per

candy than the previous price.

In April, the government had offered a price of Rs 39,500 per candy,

which received lukewarm response from the textile industry. (Source:

Economic Times dated 6th

May 2013)

India's imports of cotton this year could reach 1.5 mn bales, missing

earlier estimates of more than 2 mn as the govt may to start selling its

stockpiles.

Cotton supplies since the beginning of the year in October 2012 until

February 10, 2013 were down at 183.4 lakh bales, down from 189.27

lakh bales a year earlier.

Domestic Production and Consumption

CAB in its latest meet has projected cotton crop at 34 mn bales for 2012-

13 season compared to the previous estimates of 33 mn bales.

Mill consumption is expected to go up from 22.3 million bales last year to

23.5 million bales.

Exports are estimated at 8.1 mn bales. While Import are estimated 2.5

mn bales.

Global Cotton Updates

ICE Cotton futures extended the gains of the previous session and settled

0.82% on Tuesday on strong export sales data and U.S. plantings delays

which prompted worry over upcoming supplies.

US export sales for the week ending April 25 reached 314,400 running

bales, up 32% from previous week and most since mid-January.

According to China Cotton Association, China will continue with its

stockpiling policy this year which will boost imports.

According to the USDA report, planting intentions for the 2013-14 season

are said to be at a 4 year low. Also, there are expectations of good

export demand from China. Reports of India and China releasing stocks

from the state reserve led to a decline in the prices.

USDA has initially forecasted US Cotton acreage for 2013-14 season, at

smallest in 20 yrs, however, with recent surge in prices, farmers may

decide to plant more cotton. The planting intention data is schedule to

be released on 28th march 2013.

Outlook

We expect Cotton prices to trade on mixed note today. Prices may gain

tracking firm international markets. US cotton planting intentions were

reported at a 4 year low. China will continue its stockpiling policy, may

also support prices.

In the domestic markets, sharp upside will be capped as offloading from

the state reserves may ease supplies in the short term.

daily agri report, may 08

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