Karvy Commodities` view on Pepper, Turmeric, Jeera, Chilli

Karvy Commodities Broking has come out with its report on Oil and Oilseeds and Spices. According to the research firm Pepper January futures are expected to continue the positive trend on follow through buying.

Oil and Oilseeds Insight:
Weakness in oilseed complex might prevail today indifferent to international markets as domestic demand is very weak for oilseeds and edible oils. Buyers are inactive across major spot markets as the spot prices have steeply surged during this week. Global supply of soy bean is projected lower which might limit down fall in prices. Weekly export sales data has increased substantially in soy complex which might also limit the down fall in prices. Showers in Malaysia is disrupting supplies of palm oil which might keep the international palm prices higher while domestic prices might not rise steeply as local demand is very sluggish.

Spices Insight:
Pepper: Pepper January futures are expected to continue the positive trend on follow through buying. Growers who are selling their produce in Sabrimala market are quoting higher prices which are also keeping sentiments bullish. However, sluggish activity at export front ahead of festival of Christmas might limit huge movements on either side. Indian prices in international market are quoted stable at $7100 & $7400 per MT for Europe and US FOB. Harvesting has been started in some part of Kerala and Karnataka. However, full fledged arrivals might start after December end.

Turmeric: Turmeric April futures expected to open on slightly positive note. However, later on trend might remain subdued in absence of fresh cues from spot market. Today spot market of Erode is closed due to one day strike over the Mullaperiyar issue. However, in medium to long term huge carried forward stocks and record high production estimates are likely to weigh on prices.

Jeera: Jeera futures are expected to trade slightly positive on lower level buying. Reports of improved export demand for Indian jeera are likely to support the prices to trade up. However, sowing data came from Gujarat is showing around 20% increase in sowing till December 14th. Therefore rising acreage might limit gains in jeera prices. In medium to long term prices might turn negative on higher production expectations. Stocks available at spot market are around 10 lakh bags against 8 lakh bags last year.

Chilli: Chilli February prices are projected to trade range bound to lower on follow through selling. Most of the bulk buyers are waiting for fresh crop arrivals which are expected to hit the market in 10-15 days. Therefore, reduced buying activity at spot market is making overall trend very subdued. Arrivals at spot market of Guntur are reported around 40,000-45,000 bags. Stocks available at spot market are around 8-10 lakh bags (1 bag=40Kg.).

Cardamom: Cardamom futures are expected open on slightly lower note on extended corrections. However, growers are quoting whatever rates they want in absences of spot auction held by Spices Board. This might support the prices. However, adequate supply from major growing regions is checking the sharp gains in prices. According to data released by Spices board, cardamom exports during Apr-Oct, 2011 were up by 240% to 2,650 tons against same period in last year. According to Spices board of India, total arrivals during the current season up to November were up by 105% to 8,095 tons against 3,940 tons in the same period last year.

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