monthly report on spices (november 2013)

Presented by:Subhranil Dey [email protected]: 011-30111000 Extn. 674

02 November 2013

Monthly Report On

SPICESNovember 2013

®

1

Monthly Price movement of Spices NCDEX & MCX (October13)

Source: SMC Research


Monthly Price movement of Spices on spot markets (October '13)

®

-2.30

-1.08

0.20

12.37

-4.00

-2.00

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

JEERA TURMERIC CARDAMOM RED CHILLI

-7.93

-3.55

-2.36

-9.00

-8.00

-7.00

-6.00

-5.00

-4.00

-3.00

-2.00

-1.00

0.00

TURMERIC (NIZAMABAD) JEERA (UNJHA) RED CHILLI (GUNTUR)

% Change

Arrival Scenario

Spot Prices

Source: Agriwatch

2

Fundamentals

�There are expectations that the sowing of the crop, done during Rabi, will be higher.

�Jeera's acreage is likely to increase by 10-12 per cent in this year as more farmers in Gujarat and Rajasthan are likely to opt for the

spice crop.

�Slow domestic and export demand coupled with ample carry forward stocks may keep prices under pressure.

�Cumin seed sowing activity not started yet. During the current period sowing activity delay by 15 – 20 days due to recent heavy rains,

fields are not prepared till now.

�Sowing activities will gain pace after Diwali.

�Buyers at spot market are unwilling to buy at current level on possibility of downward correction.

�The spot Jeera prices gained from lows near Rs 13000 per quintal. Spot prices are lingering around seven month lows of Rs 13094

per quintal in Unjha.

�Strength in Rupee is hurting Jeera exports.

�Current carryover stocks of jeera were reported higher at 12 lakh bags against 9-10 lakh bags that were reported last year on the

same date.

�Exporters are expecting jeera exports may increase in the coming days (Nov – Dec) as supplies from Syria and Turkey are poor.

�For Singapore, Indian cumin seed with an allowance for 1% foreign matter was offered at $2,150-2,250/tonne free on board

Mumbai. Cumin seed 1% for Europe was offered at $2,400-2,500/tonne on cost and freight basis.

MARKET MOVEMENT AHEAD

Commodity: JEERA Trend: Range-bound Range: 13290-12270 (December)

®

Source: Agriwatch

Jeera futures Seasonal Index V/s Monthly close price 2013


3

®

Calendar spread of Jeera futures

Nov '13 Dec '13 Mar '13

Nov '13 - - -

Dec '13 -225.00 - -

Mar '13 -370.00 -145.00 -

Source: SMC ResearchAs per closing on 31st October 2013

0.97 0.97

0.91

0.96

0.940.99

1.09

1.02

0.991.01

1.071.08

13565.00

12990.00

13342.00

12887.50

13182.50 13190.00

12980.00

13672.50

12837.50

12,542.50

11800.00

12000.00

12200.00

12400.00

12600.00

12800.00

13000.00

13200.00

13400.00

13600.00

13800.00

0.80

0.85

0.90

0.95

1.00

1.05

1.10

1.15

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Seasonal Index Monthly close price 2013


Forward curve of Jeera futures

As per closing on 31st October 2013

12,837.50

13,082.50

13,327.50

12,500.00

12,600.00

12,700.00

12,800.00

12,900.00

13,000.00

13,100.00

13,200.00

13,300.00

13,400.00

October November December

4

Fundamentals

�Spot turmeric prices decreased due to poor quality offerings and slack upcountry demand.

�In the current scenario, for want of demand from North India many traders just attended the spot market and did not procure any

stock.

�Turmeric spot prices are not sustaining at higher levels due to higher carry forward stocks available in the domestic market.

�Lower demand from upcountry markets too remains discouraging factors.

�Fresh demand is expected from second week of Nov. from North Indian traders and buyers may return to market after Diwali.

�At the Erode Turmeric Merchants Association sales yard, the finger variety fetched Rs 3,699-5,899 a quintal, root variety Rs 3,571-

4,884 a quintal. Of the 1,083 bags on offer, only 310 bags were sold.

�At the Regulated Market Committee, the finger variety was sold at Rs 5,069-5,899 a quintal, root variety Rs 4,189-5,091 a quintal. Of

the 713 bags on offer, 481 were traded.

�At the Erode Cooperative Marketing society, the finger variety was sold at Rs 4,629-5,780 a quintal and the root variety Rs 4,139-

4,842 a quintal. Of the 755 bags on offer, 615 were sold.

�At the Gobichettipalayam Agricultural Cooperative Marketing Society, the finger variety fetched Rs 4,800-6,109 a quintal, root

variety Rs 4,072-5,009 a quintal. All the 200 bags found takers.

Commodity: TURMERIC Trend: Bearish Range: 4960-4580 (December)

Arrival scenario

Spot Prices

Source: Agriwatch

Source: Agriwatch

®

Calendar spread of Turmeric futures

Nov '13 Dec '13 Apr '14 May '14

Nov '13 - - - -

Dec '13 -172.00 - - -

Apr '14 -1022.00 -850.00 - -

May '14 -1022.00 -850.00 0.00 -


5

Turmeric futures Seasonal Index V/s Monthly close price 2013


®

0.86

0.910.95 0.96 0.96

1.02

1.12

1.08

1.03

1.07

1.11

0.93

6342.00

6174.006394.00

6414.00

5932.005848.00

5100.005232.00

4630.004,580.00

4500.00

5000.00

5500.00

6000.00

6500.00

7000.00

0.60

0.70

0.80

0.90

1.00

1.10

1.20




Forward curve of Turmeric futures

As per closing on 31st October 2013

4,632.00

4,810.00

4,944.00

4,450.00

4,500.00

4,550.00

4,600.00

4,650.00

4,700.00

4,750.00

4,800.00

4,850.00

4,900.00

4,950.00

5,000.00


6

Fundamentals

�End users and dealers in consumers markets who have sold out their stocks are look for fresh supplies, while small and medium end

users are looking for material.

�Selling pressure is not much.

�Exporters having commitments with selected markets and those having business with West Asian countries were all trying to buy

the commodity.

�Spot pepper prices continued to scale new highs.

�Spot prices quoted at Rs 46,400 (ungarbled) and Rs 48,400 (garbled) a quintal.

�Indian parity in the international market moved up to $8,350 (c&f) Europe and $8,650 a tonne (c&f) for the US.

�On the NMCE, Nov and Dec contracts quoted at Rs 47,300 and Rs 47,000 a quintal. On the IPSTA, Nov and Dec contracts quoted at Rs

49,000 and Rs 48,500 .

�The supply scenario in the international market was also reportedly tight and consequently all the origins firmed up except that of

Brazil which was slightly easier.

�Vietnam is quietly selling nearby positions as buyers have limited options now when it comes to purchasing sterilized pepper. Brazil

continues to be most competitive, but finding a seller there is quite difficult.

Spot Prices

Arrival Scenario

Commodity: PEPPER

®

Source: Agriwatch

Source: Agriwatch

7

Fundamentals

�Unfavourable weather remains the price driving force and the pace of arrivals is expected to remain at low.

�Fresh export demand is expected after Diwali and it may support market further in the weeks ahead. New crop arrivals coming from

Madhya Pradesh region with small quantity and higher moisture level.

�Heavy rainfall during the last couple of weeks damaged the chilli crop around 20- 25 percent. However, actual damage will be clear in

the first week of Nov.

�Higher area reported as compared to the last year but due to crop damaged production anticipated 60 – 70 lakh bags (1 bag = 30kg)

which is almost same last year production.

�Normal export demand reported in the Guntur market. Exporters buying chilli at lower price level. Demand from Sri Lanka and

Bangladesh were reported in Guntur mandi.

Commodity: CHILLI Trend: Range-Bound Range: 6640-6130 (December)

®

Arrival Scenario

Source: Agriwatch

Spot Prices

Source: Agriwatch

Calendar spread of Chilli futures

Nov '13 Dec '13

Nov '13 - -

Dec '13 -112.00 -


8

®

Chilli futures Seasonal Index V/s Monthly close price 2013


0.97

1.01

0.980.99

0.95

0.98

1.01

0.97

1.01

1.04

1.02

1.07

7072.00

6428.00 6490.00

6298.00

5724.00

5414.00

5238.00

5790.00

5592.00

6,284.00

5000.00

5500.00

6000.00

6500.00

7000.00

7500.00

0.80

0.85

0.90

0.95

1.00

1.05

1.10



Forward curve of Chilli futures


5,592.00

5,938.00

6,066.00

5,300.00

5,400.00

5,500.00

5,600.00

5,700.00

5,800.00

5,900.00

6,000.00

6,100.00

6,200.00


Commodity: CARDAMOM Trend: Bearish Range: 775-710 (December)

9

Spot Prices

Source: Agriwatch

Fundamentals

�Heavy arrivals are being witnessed at auctions.

�The producers are not interested in holding material as they feared that prices will drop further.

�Exporters also reported to have slowed down their buying.

�Higher stocks were reported in the physical market and it may continue to put pressure on the cardamom prices.

�The individual auction average vacillated between Rs 555 and Rs 590 a kg which according to growers was much below

remunerative price levels.

�As current season began officially from August 1, total arrivals during the season up to October 27stood at 6,125 tonnes against

2,822 tonnes as on October 28 during the last season. Sales were at 5,979 tonnes and 2,639 tonnes respectively.

�The weighted average price as on October 27, 2013 stood at around Rs 607.66 a kg as against Rs 741.99 a kg as on October 28 in 2012.

�Prices of all graded varieties remained unchanged last week and prices last weekend were (Rs/kg): AGEB 710-720; AGB 585 -595;

AGS 545-555; and AGS -1: 525-535. Bulk was being sold at Rs 425-850 a kg.

Arrival Scenario

Source: Agriwatch

®

Calendar spread of Cardamom futures

Nov '13 Dec '13 Jan '14 Feb '14 Mar '14

Nov '13 - - - - -

Dec '13 -36.60 - - - -

Jan '14 -65.90 -29.30 - - -

Feb '14 -91.10 -54.50 -25.20 - -

Mar '14 -114.40 -77.80 -48.50 -23.30 -


10

®

Cardamom futures Seasonal Index V/s Monthly close price 2013


0.970.98

1.02 1.02

1.07

1.15

1.12

0.99

0.92

0.83

0.93

0.99

1034.50

965.00

910.00

809.00

716.20

762.90

674.20

720.00

709.20

710.60

600.00

650.00

700.00

750.00

800.00

850.00

900.00

950.00

1000.00

1050.00

1100.00

0.80

0.85

0.90

0.95

1.00

1.05

1.10

1.15

1.20



Forward curve of Cardamom futures


708.50

747.30

778.60

806.20

841.90

650.00

700.00

750.00

800.00

850.00

900.00

October November December January February

SMC Global Securities Limited is proposing, subject to receipt of requisite approvals, market conditions and other considerations, a further public issue of its equity shares and has filed a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The DRHP is available on the website of the SEBI at www.sebi.gov.in and the website of the Book Running Lead Managers i.e. Tata Securities Limited at www.tatacapital.com and IL&FS Capital Advisors Limited at www.ilfscapital.com. Investors should note that investment in equity shares involves a high degree of risk. For details please refer to the DRHP and particularly the section titled Risk Factors in the Draft Red Herring Prospectus.

Disclaimer:

This report is for the personal information of the authorized recipient and doesn’t construe to be any investment, legal or taxation advice to you. It is only for private circulation and use .The 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 the report. The 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 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 we and our affiliates, officers, directors, and employees, including persons involved in the preparation or issuance if this material;(a) from time to time, may have long or short positions in, and buy or sell the commodities 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.

For further any queries, please contact

Subhranil Dey Sr. Research Analyst [email protected]

Ph.: 011-30111000

Extn.: 674

®

monthly report on spices (november 2013)

Business

root variety rs

turmeric spot prices

spot jeera prices

finger variety

spot markets

theper quintal

root atvariety rs

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