ncomm ncml commodity market monitor date: 27-02-2018 rm …
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Date: 27-02-2018 NCoMM NCML Commodity Market Monitor
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OTHER DATA Sowing progress | Advance estimates | Kharif and rabi MSP
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Sugar • Wheat • Paddy/Rice • Jowar • Tur • Chana • Guarseed
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Date: 27-02-2018 NCoMM NCML Commodity Market Monitor
• Twin government measures earlier this month including increase in
import duty on raw and white sugar to 100% and restriction on sugar
sales by imposition of stockholding limits in February & March brought
some relief for sugar mills & cane farmers & lent support to sugar prices.
• The measures came in after domestic sugar prices fell 18% between
October 2017 and January 2018 in anticipation of surplus production, and
this along with 11% hike in FRP put pressure on profitability of sugar mills.
• ISMA revised India’s sugar production estimate upwards to 26.1 mn
tonnes in 2017-18 marketing year- the highest in three years, against only
20.3 mn tonnes in 2016-17. ISMA has also said that looking at the current
trend of production till Feb. 15 and the reported high yields in
Maharashtra & Karnataka, the sugar production estimate will be
reviewed and may have to be revised.
• Green Pool Commodity Specialists have forecast Indian production at
28.1 mn tons, with expectations of an equal or better crop next season.
• The consumption is pegged at 25 MT for this year which will leave ample
room for exports. As per ISMA, India may export 1.5 mn tonnes of sugar
in the next six to eight months as higher yields boost supply. India
exported 1.66 mn tons of sugar in 2015-16 & 46,000 tons in 2016-17.
• The millers are also wanting the government to scrap the 20% export
duty on sugar so that surplus sugar can be shipped out.
• Sales restriction for two months, requiring mills to keep at least 83-86
per cent of the closing stock of the previous month, and forbidding sale
of quantities produced in February and March in the same month, will
restrict supply should restrict further declines in sugar realisations
before production closes by April and has also lent support to prices.
• USDA estimates world sugar production at 185 mn tonnes in 2017-18
from 172 mn tonnes last year, with consumption rising to 174 mn tonnes.
• Record production in Brazil (up 1.1 mn tonnes to a record 40.2 mn
tonnes) and higher expectation of India’s output could drag on
international prices that are already near their lowest in 3-1/2 months.
• Global sugar prices have tumbled about 33% in the past year on a global
surplus as production increases in Europe and India.
Mandi Price in Rs/ Quintal
26-02-2018 19-02-2018 %Change
Kohlapur 3217.1 3282 -1.98
Muzzafarnagar 3311 3488.1 -5.08
Kolkatta 3332.5 3472.5 -4.03
2,100
2,400
2,700
3,000
3,300
3,600
3,900
Jan
-14
Jun
-14
De
c-14
May
-15
Oct
-15
Ap
r-16
Se
p-1
6
Mar
-17
Au
g-1
7
Feb
-18
Sugar - M-grade : Muzaffarnagar Prices
FUNDAMENTAL SUMMARY
Price Drivers Impact
Doubling of import duty from 50% to 100%
Bullish
Sales restriction through Imposition of stock limits
Bullish
Reports of good yields and expected further upward revision of production estimates, currently pegged 29% over last year
Bearish
Weak bulk demand Bearish
Higher exports expected and consideration to scrap 20% export duty
Bullish
Global bearishness due to higher production
Bearish
Based on Primary & Secondary Sources
Fundamental Report SUGAR
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Date: 27-02-2018 NCoMM NCML Commodity Market Monitor
Fundamental Report WHEAT
• According to the ministry official, India’s wheat output this year
would be around 98 million tonnes (mt), almost similar to what
the country produced last year. However, market participants
are estimating lower production estimate as wheat sowing
coverage area is slightly lower than last year. India’s wheat
acreage till 09th February 2018 stands at 304.29 lakh hectares,
4.27 per cent lower as compared to 317.88 lakh hectares sown
last year till the same date.
• Hailstorms and unseasonal rains lashed several parts of Madhya
Pradesh and Maharashtra which have affected the standing
wheat crop. Sehore, Harda and Dewas were among the worst
affected districts in Madhya Pradesh.
• The government has set wheat procurement target for 2018-19
Rabi Marketing Season at 32 MMT as against 33 MMT in the
previous season. In 2017-18 government has procured 30.8 MMT.
• Madhya Pradesh government has announced a bonus of Rs. 200
per quintal over the Centre’s MSP of Rs. 1,735 and the
expectation is that other States such as Rajasthan, Haryana and
Uttar Pradesh may follow suit.
• Wheat harvesting may start after Holi in major producing states
which might put downward pressure on the prices.
• According to the market participants, government is considering
of raising import duty on wheat from the current 20 per cent to
discourage cheap imports and give support to the domestic
prices.
• According to the market participants, India’s wheat imports are
set to surge due to lower plantings and unfavourable weather
condition. India may import 3.5 million MT in this year from April
1, 2018 to March 31st, 2019.
• India wheat export is reported at 1.79 lakh MT from April to
December 2018. In 2016-17 India exported 2.18 Lakh MT of wheat.
Export demand of Indian wheat is lower due to price disparity
with other exporting countries.
• As per the latest USDA report, Global wheat output is estimated
at 757.01 million MT for 2017-18 against 750.54 million tonnes for
2016-17, while the ending stocks are projected higher at 268.02
million tonnes against 252.72 million tonnes last year.
1500
1700
1900
2100
2300
2500
Feb
-16
May
-16
Au
g-1
6
No
v-16
Feb
-17
May
-17
Se
p-1
7
De
c-17
Mar
-18
Wheat: Standard mill quality : Delhi - Prices
FUNDAMENTAL SUMMARY
Price Drivers Impact
Lower production estimate Bullish
Unfavourable weather condition in major producing states
Bullish
Lower procurement target Bullish
Bonus by state governments Bullish
Higher imports Bearish
Harvesting of crop is expected in the coming days
Bearish
Government may increase import duty Bullish
Higher global wheat production estimate
Bearish
Based on Primary & Secondary Sources
Mandi Price in Rs/ Quintal
26-02-2018 19-02-2018 %Change
Delhi 1784.3 1813.6 -1.62
Indore 1800 1775 1.41
Kanpur 1685 1668.75 0.97
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Date: 27-02-2018 NCoMM NCML Commodity Market Monitor
Fundamental Report RICE/PADDY
• The all India Rabi Rice acreage as on 16th February 2018 stood at 31.89
lakh hectares as against 27.32 lakh hectares same period last year.
Thus, 4.57 lakh hectares more area covered compared to last year.
(Higher area was reported from Tamil Nadu (4.19 lakh hectares.),
Andhra Pradesh (1.47 lakh hectares.)
• As per advance estimates, India's Kharif Rice output 2017-18 is likely to
decline by 1.9 million tonnes to 94.48 million tonnes from the record
96.39 million tonnes Kharif production in 2016-17.
• As per the Agriculture Department Jharkhand, going by crop coverage
and post-harvest scenario, Jharkhand would have anywhere between
54 and 56 lakh metric tonnes of paddy in the Kharif season of 2017-18.
Last year, production was between 42 and 43 lakh metric tonnes.
• The government has a target of 55 lakh tonnes rice procurement
(grown in Rabi season of 2017-18 crop year), which is in addition to 375
lakh tonnes target of Kharif rice. The Centre has procured 289.7 lakh
tonnes of rice as of 09th February this year. The rice procurement
season runs from October to September.
• Indonesia's state food procurement agency has signed contracts with
six companies for 281,000 tonnes of rice imports, of which 141,000
tonnes was to be imported from Vietnam, 120,000 tonnes from
Thailand and 20,000 tonnes from India.
• As per the Agricultural and Processed Food Products Export
Development Authority, Non-basmati rice exports during April –
December period jumped 39.5 per cent from a year ago to 6.34 million
tonnes due to higher demand from countries such as Bangladesh.
• Myanmar's rice export this financial year has reached a record high in
over 60 years, nearly 3 million tons have been exported this fiscal year.
In the previous years, a maximum of 1.8 million tons of rice were
exported.
• As per sources, the reopening of Rice imports by Iran could push
basmati shipments from India.
• According to U.S. Department of Agriculture, Rice production in
Bangladesh for 2017-18 forecasted around 32.65 million tonnes as
compared to 34.57 million tonnes in 2016-17.
Mandi Price in Rs/ Quintal
26-02-2018 19-02-2018 %Change
Hanumangarh (1121 Pusa)
3400 3500 -2.85
Mainpuri 3180 3050 4.26
Aligarh 3400 3480 -2.29
1600
2000
2400
2800
3200
3600
Jun
-15
Oct
-15
Feb
-16
Jun
-16
Oct
-16
Feb
-17
Jun
-17
Oct
-17
Feb
-18
Paddy - 1121 pusa : Hanumangarh
RICE/PADDY FUNDAMENTAL SUMMARY
Price Drivers Impact
Significant increase in Rabi crop acreage
Bearish
Lower Rice production 2017-18
Bullish
Higher export demand
Bullish
Lower Rice production in Bangladesh
Bullish
Re-opening of Rice
imports by Iran Bullish
Based on Primary & Secondary Sources
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Date: 27-02-2018 NCoMM NCML Commodity Market Monitor
Fundamental Report JOWAR
• As per the first advance estimates released by the government,
the kharif jowar output for 2017-18 has been projected at 2.15
million tonnes, an increase of about 16% from the 1.85 million
tonnes in the previous 2016-17 season.
• As of 9th February the sowing in Jowar has decreased by 4% to
31.01 Lakh Ha from 32.20 Ha.
• Acreage in key producing regions like Karnataka and Andhra
Pradesh has increased by 20% & 29% while in Maharashtra has
decreased by 16%
• According to Agmark, for the first 3 weeks of February about
26788 MT of the jowar crop arrived in mandis across the country
an increase of about 14% from last year which was at 23455 MT
last year.
• According to the 2nd advance estimates of the Gujarat Govt the
production of jowar is expected to fall down by 32% to 1,02,000
tonnes from 150,000 tonnes last year
• According Telangana state marketing board the procurement of
red jowar specially in nizamabad district at the support price of
2300 has been started for 45 days due to distress arising out of
poor price being offered by traders in mandis
• China has launched an anti-dumping probe for Jowar exports as
according to Chinese officials it is exported from the USA at
improperly low prices
• For the month of January china imported 560,000 MT of Jowar
more than triple of the previous month
Mandi Price in Rs/ Quintal
26-02-2018 19-02-2018 %Change
Akola 1015 1030 -1.46
Dhule 1047 1021 2.55
Mumbai 2500 2300 8.70
800
1400
2000
2600
Mar
-17
Ap
r-1
7
Jun
-17
Jul-
17
Au
g-1
7
Oct
-17
No
v-1
7
Jan
-18
Feb
-18
Jowar - White : Gadag Prices
FUNDAMENTAL SUMMARY
Price Drivers Impact
Higher Production estimates Bearish
Higher arrivals Bullish
Lower area estimates Bearish
State Procurement Bullish
Based on Primary & Secondary Sources
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Date: 27-02-2018 NCoMM NCML Commodity Market Monitor
Fundamental Report TUR
• In the last week, Tur traded slightly up on improved dal demand
before festive season. Generally, consumption of Tur dal demand
increases with increasing temperature.
• However the prices, trading at Rs 4250 to 4550 per qtl, in Gulbarga
market is still quite below the MSP of Rs 5450 per quintal. New Red
Tur is being traded at Rs.4000-4600 per quintal.
• Steady to firm tone may prevail in coming days as higher procurement
plan by state agencies would remain supportive to cash market
fundamentals. Procurement drive and increased private buying may
prevent the tur prices from further decline.
• Tur procurement commenced in Maharashtra from 1st February and is
likely to check decreasing prices of Tur in mandis of Maharashtra.
Central govt has green signalled to buy 4.46 lakh tonne Tur in the
state. Around 1.2 lakh farmers have registered so far. The crop size is
smaller than last year and will reinforce recovery in prices.
• The crop size smaller; according to the first advance estimate of kharif
crops, tur production is expected to decline by 16.5% from 47.8 lakh
tonne in 2016-17 to 39.9 lakh tonne in 2017-18.
• The area under tur this year declined to 43.5 lakh hectares (lh), from
53.2 lh last year, with Maharashtra farmers alone reducing area from
15.3 lh to 12.3 lh. Even though the area was lower, the yield has been
higher across many regions, but farmers are not getting due returns.
• Nafed procured 84320.25 tonne Tur at MSP till 8th Feb2018 from
kharif 2017-18 crop. Karnataka has contributed around 41,520 tonne so
far. Telangana has procured 39,403 tonne so far. Telangana’s initial
procurement target has been met but the same has been revised
upwards and procurement date extended to 28th Feb 2018.
• The export ban was removed by the government on all pulses.
• Myanmar is offering lemon tur (Mumbai) at 4050-4075, lower than
prevailing price in India, however imports are not possible as import
quota allowed has been used.
• Private traders have stocked 3-4 lakh tonnes of tur in Burma & African
countries hoping government may open up imports in lean season.
• Even though the price tone looks firm, Tur price would not move up
suddenly. It would take time to reach MSP level in the weeks ahead.
2500
6500
10500
14500
Jun
-15
Oct
-15
Jan
-16
May
-16
Au
g-1
6
De
c-16
Mar
-17
Jul-1
7
Oct
-17
Feb
-18
Lemon tur FAQ-Myanmar origin : Mumbai
TUR FUNDAMENTAL SUMMARY
Price Drivers Impact
Procurement drive and private buying
Bullish
Ongoing crop arrivals Bearish
Large carryover stocks lying with the government
Bearish
Demand likely to strengthen with rising temperature
Bullish
Lower production estimate Bullish
Stocking of Tur by traders in Burma & African countries
Consolidation
Based on Primary & Secondary Sources
Mandi Price in Rs/ Quintal
26-02-2018 19-02-2018 %Change
Mumbai 4015 4160 -3.49
kanpur 3535 3750 -5.73
Akola 4250 4250 0.00
0
Date: 27-02-2018 NCoMM NCML Commodity Market Monitor
Fundamental Report CHANA
• According to the latest sowing report, as on 09th February all India
chana acreage is reported at 107.63 lakh hectares in 2017-18 which is
8.13 per cent higher than 2016-17 acreage of 99.54 lakh hectares at
the same time period. Chana acreage has increased in 2017-18 due to
increase in MSP and farmers sifting to chana crop as domestic prices
were firm throughout the year.
• Hailstorm has affected the standing chana crop in many parts of
Maharashtra. Crop was ready to harvest when the hailstorms hit the
area which has damaged the whole crop in some parts and lower the
yield in some parts.
• Moreover, unfavourable weather condition in some parts of
Rajasthan & MP also has affected the standing crop of chana.
• Early harvested chana crop has started hitting in the mandis of
Maharashtra in small amounts. New crop quality is good. Arrivals is
expected to increase after Holi.
• Chana crop was included in Bhavantar Bhugtan yojana of Madhya
Pradesh government. The registration will begin from February 12
,2018 and will continue until March 12,2018.
• The central government has raised import duty to 40 per cent from
30 per cent as it wants to contain inward shipments in view of record
production of chana. Despite higher import duty on chana, regular
imports from Australia are coming. As of 26th February, Australian
chana is being traded at Rs 3800 per quintal in Mumbai market and
Rs 3825 per quintal at Mundra port.
• According to the first advance estimates released by the
government, India’s chana production target estimate for 2017-18 is
9.75 million MT which is slightly higher than 2016-17 fourth advance
estimates of 9.33 million MT. But market participants are expecting
some yield loss in Karnataka, Andhra Pradesh & Tamil Naidu.
• According to the latest report of Australian Bureau of Agricultural &
Resource Economics & Sciences(ABARES), Australian chana
production estimate has been reduced by 47.85 percent to 1.045
million tonnes from 2.004 million tonnes last year due to lower yield
expectation. Despite higher sowing chickpea acreage, production
decreased due to hot & dry weather in major producing region.
3500
5000
6500
8000
9500
11000
12500
Se
p-1
6
No
v-16
Jan
-17
Mar
-17
Jun
-17
Au
g-1
7
Oct
-17
De
c-17
Feb
-18
Chana -Rajasthani desi : Delhi
TUR FUNDAMENTAL SUMMARY
Price Drivers Impact
Higher sowing acreage Bearish
Crop damage in Maharashtra Bullish
Unfavourable weather condition in M.P and Rajasthan
Bullish
Arrivals of new crop Bearish
Chana included in Bhavantar Bhugtan Yojana
Consolidation
Higher production estimate Bearish
Based on Primary & Secondary Sources
Mandi Price in Rs/ Quintal
26-02-2018 19-02-2018 %Change
Delhi 4175 4250 -1.76
Bikaner NCDEX 3863.65 4037.75 -4.31
Kota 3700 3600 2.78
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Date: 27-02-2018 NCoMM NCML Commodity Market Monitor
Fundamental Report GUARSEED
• Guar seed and Guar gum futures continued to remain bearish in the
absence of any strong demand from spot markets across the
country.
• According to Bikaner based traders, Off take in the spot market is
said to sluggish mainly due to recent weak export demand, but
prices have already corrected sharply and now at attractive level.
• Though export demand is not great at present, but there is
consensus among market participants that rising US oil rigs count
data will led to higher consumption of Guar gum.
• As per Jodhpur based traders, buyers are hesitant to make any bulk
deals not only due to declining prices, but also weighed by poor
export demand observed in the recent months.
• Off take in Guar gum is very poor from overseas buyers, which has
raised concern among buyers and prompted stockists to liquidate
their stocks to avoid any major losses.
• India's Guar gum export during the month of December 2017 rose at
subdued pace of 3.06 per cent month-on-month at 43,881 metric
tonnes compared with 42,574 metric tonnes during the same period
a year ago, according to Agricultural & Processed Food Products
Export Development Authority. Cumulative Guar gum export during
April-December 2017 increased 35.85 per cent at 365,451 metric
tonnes versus 269,001 metric tonnes last year.
• As per the 2nd advance crop production estimates of Rajasthan
government, production of Guar seed in Rajasthan is estimated at
15.44 lakh tonnes for 2017-18 as compared to 14.04 lakh tonnes
estimated for 2016-17. Contrary to the state government's estimate,
trading sources have earlier pegged overall Guar seed production at
7 lakh tonnes in 2017-18.
• Guar seed stock at NCDEX warehouses as on 25th February was
39,604 tonnes as against 20,902 tonnes last year same period.
2,900
3,200
3,500
3,800
4,100
4,400
May
-16
Jul-1
6
Se
p-1
6
De
c-16
Feb
-17
May
-17
Jul-1
7
Se
p-1
7
De
c-17
Feb
-18
Guarseed : Bikaner
GUAR FUNDAMENTAL SUMMARY
Price Drivers Impact
Buyers are hesitant to make any bulk deals
Bearish
Expectation of demand at lower levels
Bullish
Off take in Guar gum is very poor from overseas buyers
Bearish
Higher US oil rigs count will led to higher consumption
Bullish
Estimation of higher production compared to last year
Bearish
Based on Primary & Secondary Sources
Mandi Price in Rs/ Quintal
26-02-2018 19-02-2018 %Change
Bikaner 4275 4412 -3.10
Jodhpur 4371 4487 -2.58
Bhuj 3852 4096 -5.95
0
Date: 27-02-2018 NCoMM NCML Commodity Market Monitor
Sugar prices up but need policy
support: Traders
MSP hike not best way to boost
farmers’ income: USDA Chief
As farmers hold on, castorseed
prices firm up ahead of new crop
estimate
Groundnut prices slip further as
additional purchase gets delayed
Mustard weakens as arrival rises
Indian buyers face charge of
reneging on deals as pulses turn
cheap
Government considering raising
wheat import duty
To purchase the India Commodity Year
Book 2018, contact us at
Official Production Estimates
First advance estimates 2017-18 &
previous years’ estimates : First
Advance Estimates 2017-18
MINIMUM SUPPORT PRICE (Rs/Qtl.)
Commodity 2016-17 2017-18
KHARIF
Paddy Common 1470 1550
paddy grade A 1510 1590
Jowar Hybrid 1625 1700
Jowar Maldandi 1650 1725
Bajra 1330 1425
Ragi 1725 1900
Maize 1365 1425
Tur 5050 5450*
Moong 5225 5575*
Urad 5000 5400*
Groundnut 4220 4450*
Sunflower seed 3950 4100 #
Soyabean black 2775 3050
Sesamum 5000 5300 #
Nigerseed 3825 4050 #
Cotton(Medium Staple) 3680 4020
Cotton(Long Staple) 4160 4320
RABI
Commodity 2016-17 2017-18
Wheat 1625 1735
Barley 1325 1410
Gram 4000* 4400
Masur (Lentil) 3950* 4250
Rapeseed/Mustard 3700* 4000
Safflower 3700* 4100
Wheat 1625 1735
*includes bonus of Rs 200 per quintal
# includes bonus of Rs 100 per quintal
THE WEEK THAT WAS
Commodity Latest Fortnight ago
Month ago Year ago
26-Feb-18 12-Feb-18 25-Jan-18 27-Feb-17
Wheat 1800 1668 1680 1664
Chana 3863 3943 3818 5200
Rice/Paddy 3400 3600 3700 3000
Guar 4180 4450 4550 3654
Sugar 3311 3400 3187 3938
Tur 4250 4370 4250 4015
Jowar 1047 1045 1040 1280
PRICE TRACKER
Link for commodity-wise and
market-wise prices and arrivals:
http://agmarknet.gov.in/PriceAndArriv
als/CommodityWiseDailyReport2.aspx
0
Date: 27-02-2018 NCoMM NCML Commodity Market Monitor
RABI SOWING PROGRESS- Link
0
Date: 27-02-2018 NCoMM NCML Commodity Market Monitor
Answers for 16 Jan Quiz:
Ans 1: Soybean Ans 2: True
People who gave correct answer:
Dharmveer Singh Vinaya Dilip Shinde
DEVARAJ L Manish Meena
Anilkumar Parvathaneni Lalji singh yadav
Kalyan Gudlavalleti Malik Kumar Meena
Mayank Mishra L. KARAN RAIKA
Dr.Ravi Pratap Singh Sangwan Surender kumar
Praveen Kumar Mundra Gurmeet Singh
UDHAYA Neetu Gautam
lalji singh yadav Sumit Chahal
S.Narendra Adarsh Sharma
neha Riteshkumar Sahu
LAXMIKANT S H Deepak Sahu
Sanjay Singh bijendra singh
Naresh Sharma Soma Sudhakar
Vineet Poonia Sandipkumar Nayak
Sandeep Kumar Vinod Kumar kakoriya
Ranjit Singh arun david martial.a
Nirbhay singh neha
Omkar Manish Raj
Satpal akansha kumari
LeelaRam Dr. Raina Jain
kulvinder singh rohit kumar prajapati
Ramdev Pawan Kumar Chaturvedi
Abinandhan Ramamoorthy Maheshkumar Ramaswamy
Saurabh Agarwal Sachin Sarjerao Gharge
A.Ravikrishna mahendra kumar
Harijana seenaiah Gopal Kuchhadiya
ASHWANI KUMAR deepesh gautam
Nikhil Kumar Huzoor Ali Shaik
Manoj kumar pandey venkanna katikella
Jaipal kumar Vikas Kumar
Priyanko Ghosh arunesh pratap singh
Surjeet Jasbir Singh
kapil dev Pawar santosh chandrakant
Sunny Kumar sreenath chowdary
ANJALI Naresh pal
Satyendra Pratap Singh Purushottam Kumar
Prem kumar
Lucky Winner: Neha Dynaneshwar Akula
0
Date: 27-02-2018 NCoMM NCML Commodity Market Monitor
Advisory Team
Basant Vaid Head: TCIG [email protected]
Sreedhar Nandam Vice President: SCM [email protected]
Research Team
Suresh Solanki Assistant Manager: TCIG [email protected]
Kamna Malhotra Economist: TCIG [email protected]
Akash Jaiswal Research Analyst: TCIG [email protected]
Ansh Aggarwal Senior Officer: Trade Support [email protected]
For any research queries, contact us at [email protected]
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