Whats Happening‎ > ‎

Spices-September Wrap Up

posted Sep 24, 2010, 7:49 PM by Unknown user   [ updated Oct 3, 2010, 1:17 AM ]
The basic fundamentals of Turmeric of higher sowing and good crop prospects in new season remain intact, as we had advocated in our last post. Arrivals at Nizamabad and Erode market were 400-800 bags and 6000-10,000 bags respectively (each bag=70 kg). As per trade sources, Stocks available at spot market is around 8-10 Lakh bags which is sufficient to meet the requirement till the fresh crop arrive in market. As per data released on September, 15 2010 by Andhra Pradesh Ministry of Agriculture, Acreage under turmeric sowing has increased to 0.64 lakh hectares from 0.59 lakh hectares in the same period last year. 100% turmeric sowing has been completed in Andhra Pradesh region.  However despite these fundamentals being strong, a certain upswing was seen in the prices in the recent 2 weeks due to the festive demand (as pointed out in our last post). Turmeric market is greatly influenced by the commodity exchanges. The open interest in turmeric on the exchanges have increased even at these levels, indicating that the traders expect more uptrend. This certainly looks to be the case particularly amidst the festival based demand in India and Bangladesh. But the strong supply side fundamentals should take hold after these festivities (i.e. around end November) and result in price correction. 

Cumin Seeds witnessed a range bound price over the month. Few takers were available at the higher prices. Also prospects of a good crop in new season also dampened sentiments. However lower arrivals supported the prices. Arrivals at Unjha market were reported around 2500-3000 bags during most of last week, however during end of the week arrivals reduced to 1800-2000 bags (each bag= 55 kg). Emergence of domestic demand amid reduced arrivals may support the prices. Export enquires from overseas may also support the prices. According to market sources, Syria prices are hovering around $3150-3200 per tonne, Indian prices are quoting at $2800- 3000 per tonne and Turkey prices are quoting in the range of $2500- 2800. Going forward, cumin now looks to be in a range bound territory.

Chillies found good support in the form of demand from international markets like Bangladesh, Pakistan & Malaysia. As reported in our last post, the prices were very low and hence as the Eid festival finished the importers picked up stocks at these bargain prices. Apprehensions of crop damage due to heavy rains in major growing region also added to the upside. Also reports of lower acreage compared to the last year and slow sowing activity supported the prices. As per data released on September, 22 2010 by Andhra Pradesh Ministry of Agriculture, acreage under Chilli sowing is around to 1.02 lakh hectares down from 1.56 lakh hectares in the same period last year. Only 65% Chilli sowing for this season has been completed in major growing regions of Andhra Pradesh. However there is stil considerable amount of stock (30-35 lakh bags) available in the spot makret, which should keep the prices in check. Going forward, the price movement will mainly depend on the international demand particularly from Bangladesh & Pakistan. We expect it to be neutral to bullish.