Last Updated : 13 October 2012 at 11:50 IST
Breakout in India Jeera futures on festive, export demand
Source :Commodity Online
Jeera’s first breakout level was at 14460 and after witnessing some profit booking, the uptrend continued on fresh buying supported by good trade volumes indicating strength in buying and potential to sustain upper levels.
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India Jeera futures are expected to trade positive on festival and export demand although reports of higher carryover stocks, sowing progress on better rains could limit gains.
Technical charts suggest, Jeera November contract at National Commodity and Derivatives Exchange has witnessed an upside breakout supported by good trade volumes (See chart at the end of article).
Jeera’s first breakout level was at 14460 and after witnessing some profit booking, the uptrend continued on fresh buying supported by good trade volumes indicating strength in buying and potential to sustain upper levels.
Fundamentals:
-Production of Jeera in 2011-12 is expected to be around 40 lakh bags as compared to 29 lakh bags in 2010-11 (each bag weighs 55 kgs). (Source: spot market traders).
-According to Spices Board of India, exports of Jeera in April 2012 stood at 2,500 tonnes as compared to 2,369 tonnes in April 2011, an increase of 6%.
-Reports of higher carryover stocks as compared to last year restricted sharp gains. Good rains in Gujarat, thereby expectations of better sowing prospects ahead of the rabi sowing have also pressurized the prices in recent times.
-Traders are expecting Festive season demand to support the rates which have fallen 15-20% over last 2 months. Weakness in Dollar however could affect the export demand in short term but that too is expected to pick up over next 2 months.Expectations of better export figures have also likely to support the prices at lower levels.
-According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Around 10 lakh bags of Jeera are reported across India. Supply concerns from Syria and Turkey still exists. Expectations are that export orders may still be diverted to India from the international markets due to lack of supplies from Syria on back of the ongoing civil war.
-Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,650 tn (c&f) while Syria and Turkey are not offering.
Outlook:- Positive
Recommendation: Buy Jeera NCDEX November near 14500 Sl 13500 Tgt 16000
Holding Period:- 1.5 months
(The author is an Agri-Commodities analyst at Commodity Online)
