Expect Pepper futures to trade lower: Geojit Comtrade

Geojit Comtrade has come out with its report on spices. According to the research firm, Pepper futures are expected to trade lower due to slack export demand.

Pepper futures are expected to trade lower due to slack export demand. Also, the arrivals in Kochi on Saturday showed marginal improvement to around 12 tonnes from near 5-8 tonnes reported during the beginning of the week. The spot price for garbled and un-garbled pepper traded at Rs.41400 and Rs.39900 per 100kg, respectively. As well, the supply pressure from other major producing countries weighs on the price trend. According to the latest report from International Pepper Community, during January-July 2012, total pepper import of Japan was 4633 tonnes as against 5002 tonnes imported in the same period last year. Import of whole pepper in 2012 was mostly from Malaysia, while ground pepper was from Indonesia.

Jeera futures may extend the weak trend due to reports of adequate stocks availability in the physical market triggered by better production prospects as heavy rains in Gujarat in the month of September increased soil moisture and this will help farmers for sowing. Still, the likely rise in demand from the overseas markets amid concern over supply from Syria and Turkey may too weigh on the market sentiments. Also, as per the recent report from IMD, the southwest monsoon is likely to withdraw from some parts of northern and western India in the next 48 hours. On Friday, jeera arrivals in Unjha were around 5000 bags (1bag=55kg), up from Thursday. The spot price for the spice traded at Rs.14800 per 100kg.

Turmeric may trade in a negative mode due to sluggish domestic demand amid steady arrivals in major spot markets. Higher carryover stocks from bumper crop last year cap the upside in turmeric prices. On Friday, the arrivals in Erode and Nizamabad were around 3500 bags and 3000 bags, respectively (1bag=70kg). Meanwhile, likely fall in output and the prospect of revival in export demand could limit the sharp fall in prices. The concern over fall in output because of slow pace in sowing in major turmeric growing states too weigh on the market sentiments. According to Andhra Pradesh Agriculture Department, as of 19th Sep 2012, turmeric sowing in the state was down 19.1 percent from a year ago at 54892 hectares.

Cardamom futures are seen trading lower due to adequate supply in the spot markets. The daily arrivals stood on higher side because of sufficient carryover stocks from the bumper crop last year. Also, the exchange accredited warehouse reports increase in stocks on daily basis. As of 21st Sep 2012, cardamom stocks in the MCX certified warehouse stood steady from previous day at 130.70 tonnes, but higher from 112.70 tonnes recorded in the same period a week ago. The arrivals at the auction held on Saturday were around 77 tonnes and the spot price on an average was quoted as Rs.688.26 per 100kg. The maximum price was at Rs.1077 per 100kg.

The uptrend in chilli prices may be capped because of adequate arrivals in major spot markets amid sufficient carryover stocks. As well, the crop from Madhya Pradesh is expected to rise by around 25 percent from last year. Meanwhile, reports of the slow pace in sowing in major growing states are likely to limit sharp fall in prices. As of 19th Sep 2012, chilli sowing in Andhra Pradesh was at 97872 hectares, down from 117308 hectares sown in same period a year ago. Despite the rise in arrivals in major spot markets, good demand for the spice kept the spot price steady. On Friday, the arrivals in Guntur were around 30000 bags, up from 20000 bags reported on Thursday.

Coriander futures are expected to continue the weak trend as the prospects of rise in crop output have improved due to recent rains in Rajasthan and Gujarat. Increase in arrivals while market opened after two days break on Wednesday and Thursday led to fall in coriander prices. On Saturday, total arrivals of coriander in major markets in Rajasthan were around 17000 bags (1bag=40kg). The price for the spice in Kota traded at Rs.4200 per 100kg. Total production in the present year in Rajasthan is estimated to be around 65 lakh bags (1bag=40kg), up from 45 lakh bags last year. Meanwhile, revival in demand from overseas countries reported currently, may limit the further sharp fall.

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