Turmeric
Turmeric prices at the domestic market in the past week were quoted at steady rates due to sluggish trades at the domestic market. Prices at the Futures October contract after making a high of 5267 levels is witnessing a decline on reports of better rainfall in the Turmeric growing areas of Duggiralla and Nizamabad. Turmeric stocks at the domestic market is as follows: Nizamabad has around 2.25 lakh bags, Erode has around 7.8 lakh bags, Sangli, Duggiralla has around 2.5 lakh bags each, Warangal around 2 lakh bags and Nanded and adjoining areas around 1.5 lakh bags. At present, there is slow domestic demand from the north India. But it is expected to improve mid of August onwards. Thus, prices are expected to trade in sideways manner for the medium term. However, in the long term price may be governed by various factors such as production estimates of India for the year 2009 which are at present expected to be a normal crop of around 40-42 lakh bags (each bag of 70 kgs.), demand from the overseas as well as domestic market. Technically, if prices trade below 4480 levels price may touch 4150 levels on the downside. Prices on the upside shall run into resistance at 4750/4885 levels.
Mentha
Weak sentiment prevailed in Mentha prices across the major regions in the last week. Spot prices tumbled down and touched a low of Rs.670-680/kg in Sambhal and Chandausi regions. Traders and experts were expecting some correction after the unprecedented rise, which was clearly observed in the last week. Futures market also witnessed a sharp downfall after tracking weak spot prices. Exporters have sideline from the buying for the time being as they are waiting for further downfall to average their earlier buying at higher prices. Similarly, the market is also witnessing good arrivals from farmers due to panic selling pressure. Thus, we are expecting weak trend for the coming week. However, weather will play an important factor in for the availability of Mentha oil in spot markets. There is strong support of 638 levels and resistance of 725 levels in MCX August Mentha contract.
Rubber
The rubber prices turned weak in the weekend. Declines in international indices coupled with profit booking from dealers at higher levels took the steam out of the market.
RSS 4 moved down to Rs 141 a kg from Rs 142 a kg amidst improved volumes. The domestic rubber opened better and certain buyers from the tyre sector bought sheet rubber up to Rs 142 a kg in the morning session.
Later, the prices surrendered as the global futures moved in to the negative side. Covering groups remained inactive during the afternoon session expecting the prices to retreat towards close.
In global futures, RSS 3 weakened at its August contract to Yen 333.8 (Rs 131.02) from Yen 336.4, September to 329.5 (Yen 333.8), October to Yen 327.5 (¥332.9), November to Yen 326.2 (Yen 332.1), December to Yen 324.8 (331.3) and January to Yen 325.8 (Yen332.5) a kg at TOCOM. The grade (spot) slipped further to Rs 133.67 (133.83) a kg at Bangkok
SUGAR
Towards the weekend, sugar prices showed mixed sentiment as the prices increased in Delhi on firm physical buying against limited supplies. In Maharashtra, it eased on reduced demand from the bulk consumers amidst rumours that the government may provide extra quota of 2-3 MMt for festival demand. The fact that NCDEX imposed a special margin of 5% on long positions for all running contracts of sugar, which is effective from August 1 also affected market sentiment.
The government had allowed millers to tentatively sell 3 MMt in the quarter ending September, including 9 lakh Mt each in August and September. It had allowed mills to sell 3.6 MMt in the same period last year. However, sugarcane acreage upto July 25 had fallen more than 17.5% from a year ago to 4.4 million ha. This is expected to lead to a fall in sugar output in the year ending September 2009. Sugar production in the coming crop year that begins in October is expected to be sharply down to 20 MMt but exports too are likely to decline.
Technical analysis shows that market sentiment is weak and next week, sugar future might open lower and remain subdued.
Black Pepper
The weekend saw speculative selling in Black pepper futures and it was trading marginally down whereas the trend was quite bullish on Friday due to reports of a tight supply position. Due to strong domestic demand operators are said to be ready to buy ungarbled pepper at Rs 139 –140 a kg from the growers for moving them out to north Indian markets by evading tax.
Market analysts said that speculators were liquidating, volatility is high in futures. Traders said tight supplies from Kerala and firming trends at physical markets mainly pushed up the black pepper prices in the futures market here until Friday. Firmness in other spices also attributed to the rise in the prices, they said. Meanwhile, in spot market black pepper prices were ruling higher at Rs 14,421.10 per quintal at spices hub of Kochi, Kerala. Supply concerns and rising demands could affect market sentiments in the coming week. (Compiled with inputs from Angel Commodities, Mumbai)
