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Nov 12, 2012, 11.57 AM IST | Source: Moneycontrol.com

Pepper prices may trade with negative bias: Geojit

Geojit Comtrade has come out with its report on spices. According to the research firm, Pepper may trade in negative zone amid uncertainties due to ongoing probe by Forward Markets Commission about alleged manipulation by a cartel in Kochi.

Geojit Comtrade has come out with its report on spices. According to the research firm, Pepper may trade in negative zone amid uncertainties due to ongoing probe by Forward Markets Commission about alleged manipulation by a cartel in Kochi.

Jeera futures are likely to witness weakness due to absence of cues from spot markets, which will remain closed almost for the entire week because of Diwali. The spot market will be closed from November 12th 16th. However, slow pace of rabi sowing in major growing states and expectation of 15-20 percent lower output this season due to distressed prices in the past few months may weigh on the market sentiments. As well, the near term for the spice seems firm due to steady domestic and export demand. On Saturday, the arrivals in Unjha were around 6000 bags (1bag=55kg), up from 5000 bags reported on Friday. The spot price for the spice increased due to better demand as Unjha market will be closed during this week for Diwali holidays.

Pepper may trade in negative zone amid uncertainties due to ongoing probe by Forward Markets Commission about alleged manipulation by a cartel in Kochi. According to market source, a section of pepper traders has sought the intervention of the FMC to check manipulation of the futures market by some cartels. Also, the FMC has assigned officials to inspect about the delay and quality issues at NCDEX warehouse in Kochi. As well, the new crop is expected to reach the market by early December. Traders expect India's pepper output at 60000 tonnes this year, higher than official estimates of 55000 tonnes. As per the latest report from IPC, during January-July 2012, Germany imported 15500 tonnes of pepper, up 3 percent from same period a year ago.

Turmeric futures are likely to trade with a negative bias ahead of arrivals of fresh crop in major spot markets. The arrivals have improved with rains subsiding, following cyclone Nilam. Moreover, the carryover stocks from previous crop were estimated to be on higher side. Bumper production estimates for the year may keep the gains under check as well. Turmeric production for 2012 has been projected at 90 lakh bags (1bag=70 kg) compared with 70 lakh bags in 2011. Turmeric arrivals in Erode and Nizamabad were around 10000 bags and 1000 bags (1bag=70kg) respectively. The spot price for the spice traded at Rs.5100-5500 per 100kg. Nizamabad and Erode market will be closed from Monday to Wednesday for Diwali holidays.

Cardamom futures fell because of higher arrivals in major spot markets along with sluggish demand. On Sunday, the arrivals in the auction were near 63 tonnes and the spot price on an average traded at Rs.748 per kg. However, the price may correct from current lower level after the revival of export and domestic demand which has been affected due to prolonged disruption of auctions. Spices Board has decided to permit sale of cardamom by farmers directly to any licensed dealer as the growers were so far allowed to sell their produce only through auctions. The board has also come to a decision that the auction companies shall pay the farmers the price of the cardamom sold in the auctions within seven days.

Chilli futures extended the weak trend as improved weather in Andhra Pradesh has driven out worries over damage to the spice crop. Arrivals in major spot markets have improved since the past two days after heavy rains had disrupted trading activities earlier. Heavy rains due to Cyclone Nilam had prevented farmers from bringing the crop to the market and also there have been reports of crop damage in some major producing areas. On Saturday, chilli arrivals in Guntur were around 50000 bags (1bag=45kg) and the spot price traded at Rs.5250 per 100kg.

Coriander futures are likely to witness weakness in absence of cues from spot markets, which will remain closed almost for the entire week due to Diwali. The price for the spice had gone up in the last couple of sessions due to reports of good demand and lower arrivals in major spot markets. However, the near-term trend is seen firm for the spice due to expectations of a fall in acreage in the current rabi season. According to market source, farmers in Rajasthan had shifted to chana and mustard from coriander in the current rabi season. In the meantime, coriander sowing will gain pace after Diwali. On Saturday, total arrivals in major markets in Rajasthan were around 15000 bags (1bag=40kg).

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