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We are in the Doldrums

posted Jun 6, 2010, 7:41 AM by Unknown user   [ updated Jun 27, 2010, 12:47 AM ]
Bihar maize is being continuously lifted to satisfy the demand from Bangladesh. However the price increase has been halted for the last week as Bangladesh is procuring locally to satisfy part of its demand. Andhra crop on the other hand is being exported in marginal volumes. Indian maize like others crops will continue to be uncompetitive in the world market. The only support is for Bihar maize from Bangladesh which should increase procurement levels once their local crop starts decreasing in a about a month. 

Soybean meal is expected to be down due to the onset of monsoons. In India, monsoon has knocked the door of Indian shore in Kerala. It is a very good sing of Indian economy. In fact timely arrival of monsoon is very critical for country like India where majority of the farmers rely on rains to irrigate their crops. Rains are particularly critical for soybean as it is a KHARIF crop sown during late June to July. Its major growing states are Madhya Pradesh and Maharashtra. Timely sowing will positively affect the crop acreage and yield. With the presumption that the country will experience very good monsoon this year, we expect an increment in the total sown area in soybean in these states. Production is also likely to increase. At present daily arrivals of soybean improved to 4,200 bags in Indore mandi from previous day of 4,000 bags and 65,000 bags in Madhya Pradesh from previous day of 60,000 bags (bag=100 kg) on Thursday. From market point of view these factors are long term bearish indicators. Now if we look at the global supplies and demand, the scenario again seems in favor of bears as production in all major producers like US, Brazil and Argentina is record this year. Thus we expect prices to hover in a sideways pattern for next few days till clearer picture is emerged in near future. Overall bearish tendencies remain. 

For Rapeseed meal physical market prices in all the major mandis of Haryana, UP and Rajasthan has improved on buying support. In physical markets of Rajasthan and UP arrivals too have slightly increased with the rise in prices as farmers are bringing more produce in the market as they are getting remunerative prices. Traders expect that some more upside movement may be seen in near future. Earlier, during past one month prices hovered in a very narrow range and trading activities remained dull. It appears that current improvement is seen mainly due to stockiest buying. It is expected that market would witness further upside movement in the near future. RMseed production for the year 2009-10 is expected to remain at 6.59 MMT as compared to the 8.25 MMT during 2008-09. Physical demand is steady amidst moderate arrivals. Indications are bullish for immediate future.

For Cumin, Eeport demand continues to remain lacklustre due to lower price quotes offered by Syria at around $2200/tonne and India being offered at $2400/tonne. Prospects of a higher production this year has also been pressurizing prices to some extent. Traders feel current rates are very low but inability of export demands rising has kept the trend bearish.

Turmeric prices have tumbled a bit due to the onset of monsoon, as better prospect of crop increases. On Monday, turmeric arrivals in the Erode mandis had improved to 6000 bags (each bag weighs 70-75 kgs) from 4,000 bags in the later part of the week whereas arrivals at Nizamabad had declined to 500 bags from 1000 bags as in the previous week. errode arrival further improved to 13000 bags on Tuesday, however arrivals again decreased to 8000 bags towards end of the week due to better offtakes by the stockists. Even on slight bearishness turmeric is finding good buying. Also major importers like Middle East & Bangladesh have not yet procured in volumes as they generally do every year. Both these factors indicate long term bullishness for Turmeric.