Weekly: Mix Trend Witnesses In Spices Complex

MUMBAI (Commoditiescontrol) – Mixed trend witnessed in spices complex during the week ended yesterday as the prices of Jeera was recorded more or less stable while prices of Black Pepper, Coriander and Turmeric were recorded higher. Whereas, prices of Chilli tumbled by 4.17%.

Rates in Rs/100kg:

Black Pepper: was the top gainer almost spices complex during the week ended on Friday.

Spot prices of the spice was recorded higher by 5% at the benchmark Kochi market amid Union Commerce Ministry fixed the Minimum Support Prices (MSP) at Rs.500/kg as the cheaper spice from rival countries seen to putting pressure on the domestic prices.

However, processors and exporters of pepper products alleged that the move would harm the trade and lead to shifting of units to countries like Sri Lanka.

India is the largest consumer of pepper in the world and the second largest producer after Vietnam. The Union government approved the proposal of the state-run Spices Board as cheaper imports of pepper is seen putting pressure on the domestic market.

The notification speaks about minimum import price CIF to be Rs 500/kg ($7575/tonne), when today global market prices are trading at $3500-4200/tonne.

There are many companies that earn foreign currency for the country by importing and re-exporting the pepper by means of value addition and help create jobs in this sector.

Higher import duty would have served the farmers’ interest better than the imposition of a minimum import price on all verities of pepper, as it would lead to a cost escalation even in the case of light pepper berries which are used only for extraction and not consumed domestically.

Pepper prices have been high since 2006 and this has prompted farmers all over the globe to increase the production. Vietman which used to produce about 80-90,000 tonne about 10 years back now produces more than 200,000 tonne now, said market sources.

As per IPC, the total world pepper production in 2018 is pegged at 445,150 MT versus 460,499 MT in 2017.

Meanwhile, Indian pepper production is projected to improve in 2018 due to favourable weather conditions to 64,000 tonne.

Further, the recent decision taken by the Commerce Ministry had cheer to farmers in Idukki, said market sources.

JEERA:

Spot Jeera prices remained more or less stable at the benchmark Unjha market during the week ended on Friday amid subdued domestic and export demand.

Jeera prices have risen around 18% year on year basis and have touched a lifetime high on the futures market on the prospects of dwindling stock.

Uptrend in Jeera was attributed this season due to low production in 2016-17 against good domestic and export demand, said trade sources.

Jeera export during Apr-Sep 2017 was recorded higher at 74,958 metric tonnes against 70,108 metric tonnes, as per Commerce Ministry data.

Although, export demand has turned sluggish as the exporters have procured in large quantities followed by current higher prices.

Further, sowing of Jeera in the producing state has almost completed and the area has increased as the farmers from different commodity has switch to Jeera for better returns.

As on December 18, Jeera sowing in Gujarat was recorded higher at 348,100 ha against 256,800 ha as per Gujarat Agriculture Department.

As per market sources, Jeera production in 2016-17 was recorded at 55-60 lakh bags (55kg each) and the production this year is estimated around 60-65 lakh bags.

Meanwhile, the domestic and export consumption is pegged around 4.6 lakh bags a month keeping that in mind the supply will remain tight in the coming season.

Jeera prices at present are expected to trade in current price range though high or low Rs.400-500/100kg can be seen.

CORIANDER:

Spot Coriander prices advanced by 3.42% at the benchmark Kota market during the week ending on Friday due to good buying support from domestic buyers and stockiest owing to lower sowing reports.

Similarly, prices of Coriander futures contract expiry in January surged by 4.91% on the NCDEX as the market participants think prices will rise in coming season due to lower production.

Coriander sowing has almost completed and the area is expected to decline by 30-35% as the farmers have switched to other commodities due to lower prices Coriander this year.

As per Gujarat Agriculture Department, Coriander sowing in Gujarat has plunged by 43.65% at 67,500 against 118,000 ha during same period last year.

Market fundamentals are weak in Coriander due to sufficient availability of stock in the physical market, said market sources.

TURMERIC:

Spot Turmeric prices improved by 1.88% at the benchmark Nizamabad market due to good buying support from overseas buyers at the prevailing prices, said market sources.

Currently Turmeric is being exported to European countries, Bangladesh and UAE, they added.

Market fundamentals are weak at present due to sufficient availability of stock followed by supplies from AP Markfed through E-Auctions.

Though the prices can rise in the coming season once the supplies get tight as there are prospects of lower production due to virus attack in some of the producing belts.

Current Turmeric stock all over India is pegged around 25-27 lakh bags (70kg each) the breakdown is as follows: Telangana- 4.5 lakh bags, Andhra Pradesh- 9 lakh bags, Tamil Nadu- 7 lakh bags, Maharashta- 4.5 lakh bags & other- 2.5 lakh bags.

Further, crop in the producing belts of Andhra Pradesh, Telangana, Nanded and Basmatnagar area is reported to get affected by virus/pest attack which will affect the outcome by 10-20%.

RED CHILLI:

Red Chilli Teja variety declined by 4.17% at the Asia’s largest Guntur market of Andhra Pradesh due to muted demand from domestic and overseas buyers.

Red Chilli prices plunged around 35% due to bumper production in 2016-17 and the farmers were not ready to liquidate their stock at lower prices.

Prices of Red Chilli recovered in last month as the demand from overseas buyers improved amid empty inventories.

Further, more or less steady tone was witnessed in other varieties at the market place due to thin business activities.

At present, there is selling pressure in the market as farmers want to liquidate their stock before new crop starts entering the markets.

New crop is likely to enter the market place from second week of January.

Further, present stock in Guntur market is estimated around 25 lakh bags (40kg each) as compared with 15 lakh bags during same period last year due to bumper production in 2016-17.


Red Chilli production output is estimated around 3.5 to 3.75 crore bags versus 4.25 to 4.5 crore bags as the farmers lost their interest in commodity due to lower prices this year, as per Mumbai based trader.

Lower production this year is not only attributed by the lower sowing report but also by the virus attack on the crop in producing belts of Madhya Pradesh, he added.

Red Chilli prices are expected to trade in current prices range despite of lower production prospects due to higher carry over stock this year.

(By Commoditiescontrol Bureau; +91-22-40015522)