Weekly: Spot Coriander Declines 3.58% W/W; Turmeric Edges Higher

MUMBAI (Commoditiescontrol) – Coriander fell most in spices complex during the week ended Friday due to ample stocks and lackluster demand, whereas Turmeric managed to trade positive this week supported by some good demand and prospects of lower production in 2017-18.



Coriander


Coriander prices at the benchmark Kota market dropped as much as 3.58% to Rs 4,840/100kg amid poor domestic demand, ample stocks and import from overseas due to cheaper prices.

Coriander prices was not only weighed by bearish fundamentals, but also pressured by weak cues from futures market as benchmark October futures fell 3.49% to end at Rs 4,893/100kg on the National Commodity & Derivatives Exchange Ltd (NCDEX).

Domestic demand for Coriander is sluggish as buyers are hesitant and expecting prices to correct due to ample stocks in the country followed by cheaper imports.

India’s Coriander import during April-June 2017 surged 31.04% to 11,105 metric tonnes versus 8,474 metric tonnes same period a year ago. Highest import was recorded from Russia (7,248.24MT), Ukraine (1,902.08MT), Italy (830.28MT) and Bulgaria (699.18MT).

According to Bulgaria based exporters, "We have shipped 6,800 tonnes of Coriander to India in the month of July, which is 70% higher from same period a year ago due to good quality material ample availability at much cheaper rates."

The good quality coriander is being imported at around $473 per tonne, CNF and the medium-grade spice at $400 and after duty of 36%, the good quality Coriander in Indian currency available at Rs 4,118/100kg, while medium-grade at Rs 3,482, which is much lower than domestic prevailing rates of around Rs 5,800-6,000.

Coriander stocks at the NCDEX accredited warehouses as on September 8 stood 27,554 MT against 12,778MT corresponding period previous year.
Coriander prices may fall further mainly due to flooded by cheaper imports and higher stocks in the country.

Volume & Open Interest Analysis
Volume and open interest has shown incremental growth (see graph) with weakness in prices indicating that futures are in control on bears and they may continue to dominate ahead as well.

Black Pepper
Black Pepper (Garbled) prices eased by 1.6% to 492/kg at the key Kochi market of Kerala this week weighed by flooding of the country's domestic markets with pepper imported from Vietnam via Sri Lanka at 8 per cent import duty coupled with duty free imports from Sri Lanka. In one month the spot prices fell by Rs1,600/kg.

Meanwhile, more consignments from Sri Lanka are on their way to the markets here following many of the Indian importers are reportedly shopping in Sri Lanka for pepper in the Island neighbor country, trade sources said.

High bulk density pepper is not available in the market even though buyers were there looking for it. Imported pepper of 500 GL, 525 GL and 550 GL is being traded at Rs400, Rs410 and Rs450 a kg respectively.

On the terminal market 10 tonnes of pepper believed to be of imported stuff was traded at Rs 450 a kg on Friday.

Many of the multi-national companies are reportedly looking for heavier pepper at premium prices for obvious reasons, but the pepper is not available, trade sources said.

Sri Lanka government has reportedly announced a subsidy of Rs150 for its pepper farmers in a bid to shut their mouth against import of pepper from Vietnam.

Indian parity in the international markets was at $7,775 a tonne (cf) for Europe and Rs8,025 a tonne cf for USA.

Black pepper futures may continue to trade bearish due to higher import from overseas due to cheaper rates, however demand is expected to be limited with no rush from buyers side.

Jeera


Jeera edged lower by 0.24% to Rs 19,440/100kg at the Unjha market of Gujarat during the week ended Friday due to slow domestic and export demand.

The under tone in Jeera has turned slightly bearish mainly due to good rainfall in Gujarat, which has raises prospects of better crop next season. Further Jeera prices are very attractive as compared with other crops and this factor also could push farmers to increase Jeera area, said traders.

Jeera sowing usually starts from October and harvests in February-March period. However, it will be too early to predict anything, but the present fundamentals suggest that there is higher probability of acreage to rise, they added.

However it will be interesting to see how Jeera prices behave next few months as stocks are thin in the country and there is still a long to way go before new Jeera enter domestic market, they noted.

There is not much Jeera stock left in rival countries, according to trade sources. Hence we can expect India dominance in export market ahead, they noted.

Jeera prices may trade steady to positive in the near term as festival buying from upcountry may lend some support, however sharp rise in prices unlikely unless export demand surge, which was seen steady in the recent months.

India shipped around 40,747.24 metric tonnes, down 10.09% from 45,320.04 metric tonnes same period last year due to higher prices and slow demand from China.

Contrary to the spot market, NCDEX Jeera October delivery futured ended this week 0.31% higher to Rs 19,330/100kg. The contract during the week hovered between Rs 19,205 to Rs 19,550.

Volume & Open Interest Analysis
Volume and open interest increased significantly during couple of week (See Graph) with prices trending on the lower side is an indication of negative tone in Jeera futures as speculators are expected to dominate next week. One should be watchful at the higher level.

Turmeric


Improved demand, positive futures and prospects of lower production pushed higher spot Turmeric prices by 2.01% to Rs 7,788/100kg at the benchmark Nizamabad market.

Turmeric stocks in the country is depleting as the time progresses due to good domestic demand and steady overseas inquiries, said traders. Further the next production of Turmeric is expected to be lower mainly due to scanty rainfall in few belts, they claimed.

The demand in Turmeric is encouraging due to ongoing festival season in the country and it may last up to Diwali, October 2017.

However, it will be too early to predict about production, but trade sources expect marginal decrease in production. Turmeric is a long duration crop with sowing starts in June and harvest begins in March-April.

Turmeric sowing report as per Andhra Pradesh Agriculture Department as on September 6 stood higher at 0.14 lakh hectares as compared to 0.12 lakh hectares same period last year.

On the other hand area in Telangana as on September 06, 2017 reported tad down at 0.45 lakh hectares as compared to 0.46 lakh hectares same period a year ago, as per Telangana Agriculture Department.

The most active NCDEX Turmeric futures gained 3.09% to Rs 7,726/100kg with weekly range between Rs 7,450 to Rs 7,880.

Volume & Open Interest Analysis
Volume and open interest increased with elevation in prices is an indication that firm tone may continue ahead. Lower level in Turmeric may provide buyers opportunity.

(By Commoditiescontrol Bureau; +91-22-40015533)