Rubber
The week saw surprisingly low stocks of rubber despite the impending Onam celebrations in Kerala. In the beginning of the week, market was weak and prices had initially moved down to Rs 140-141 on buyer resistance. However, after a weak trend, physical rubber prices improved on Saturday covering purchases to fulfil the commitments kept the market firm in the weekend session. During the mid-week, prices were ruling flat at Rs 140. Supply concerns continued to put pressure on the buyers while RSS 4 firmed up to Rs 140.50 from Rs 140 a kg on Friday. Major consuming industries were active on sheet rubber up to Rs 140 a kg during the week. In the international scene, the September contract for RSS 3 which opened at ¥343.5 on Monday last slipped to ¥333.6 (Rs 140.17) a kg at TOCOM. In the domestic market, sheet rubber RSS 4 lost 50 paise per kg during the week. The trading volumes were low.

Major manufacturers were buyers on the grade up to the quoted levels and sheet rubber RSS 4 finished flat at Rs 140 a kg as on Thursday.

In international futures, RSS 3 declined at its September contract to ¥333.6 (Rs 140.17) from ¥340.7, October to ¥323.6 (330.4), November to ¥320 (327), December to ¥313 (320.3), January to ¥310 (317.1) and February to ¥308.6 (316.5) a kg.

Sugar
Sugar prices saw a firm to steady trend throughout the week. However, in the weekend sugar prices plunged in the domestic market amidst higher supplies with the government issuing an ultimatum to millers to clear their buffer stocks by September 30. Besides, bulk buyers stood aside expecting a further decline in prices, traders said. Millers have been holding stocks of around 9 lakh tonnes, hoping for prices to increase when the new crop year begins in October. Traders said,the supplies are increasing in September after the government ordered millers to clear buffer stocks before the end of the month. Otherwise, the government would buy the unsold stocks at lower state-set prices. Therefore, sugar supplies are expected to rise to 2-2.1 MMt in the open market in September to meet the festive demand. However, with a series of major festivals beginning soon traders expect even greater volumes given the likely spurt in demand from food and drinks makers in near future. Besides, forecast of sharply lower production in next crop year in a key growing region will provide underlying support to the market.

Palm Oil
Palm oil witnessed a mixed trend with a tone of weakness in the domestic bourses while recovery was visible in BMP CPO futures. Continued imports by PSU firms weighed on market sentiments. Amidst rising supplies, local oil seeds production may be hit by a dry spell affecting output for season beginning November 2008.

Arrivals of the new crop are picking up and stockists are releasing the old crop in the market. As a result of dry weather in certain peanut, sunflower seed and sesame seed growing regions, oil availability is likely to decline in the coming oil year starting Nov '08. Therefore, edible oil imports are expected to rise by 500,000 tonnes from 5.1 million tons in the current crop year ending October 31. Crude palm oil futures on Bursa Malaysian Derivatives closed higher negating the losses in soy oil and crude oil futures. According to indications, prices looks to have bottomed and managed to close above the psychological resistance of MYR 2500 levels. Good buying from the investors was witnessed. Moreover the huge discount of palm oil over soy oil also added to the firm tone of the market. However the gains will be short –lived if recovery is not noticed in soy oil at CBOT and crude oil futures. BMD launched dollar –denominated CPO futures on Friday. Prices are expected to remain subdued in the short run.

Pepper
After a week of subdued interest, pepper saw buyer interest in small quantities. This week overseas buyer interest was sluggish. Low inventory and lack of seller interest anticipating higher prices were visible. However, the activity at the upcountry market was steady. The prices for the garbled varieties remained unchanged at Rs.14200/qtl. Sellers in the market stayed away in anticipation of fetching better prices and are unwilling to sell at the prevailing prices amidst low inventory levels. Traders and grinders are seen buying in small quantities as the prices have stabilized and also bottomed down. Dollar is seen strengthening against Rupee making Indian parity most competitive in the world market at $3350/qtl. Internationally the market remained steady and Vietnamese 500 gl is offered at $2750/tonne while ASTA is offered at 3250/tonne f.o.b. Brazil and Indonesia are offering at $2900 and $3400/tonne respectively. The overseas buying interest continued to remain sluggish. Under the prevailing conditions pepper is likely to trade range bound with positive bias at the physical counter. The prices are moving in a tight range of 14184 and 14368 and hence a break out is necessary to establish a trend. Crop arrivals from Brazil, Indonesia may weigh on prices. Hence going long around lower levels is likely to remain ideal strategy as market is likely to witness movement both ways. In the futures, bear operators downed the pepper futures market towards weekend. September contract on NCDEX declined by Rs 356 a quintal to Rs 13,585, which is Rs 415 below the spot price for MG 1 of Rs 14,000 a quintal. Even October contract declined below the spot price by Rs 336 a quintal to Rs 13,880. November contact fell by Rs 314 to Rs 14,130. On NMCE, September contract fell by Rs 421 a quintal to Rs 13,617. The decline in other contracts was from Rs 308 to Rs 365 a quintal. Total turnover on NCDEX fell by 4,876 tonnes to 7,965 tonnes, while total open interest increased by 248 tonnes to 20,319 tonnes.

(Compiled with inputs from Angel Commodities, Mumbai)