Chilli futures may trade higher : Geojit Comtrade

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Geojit Comtrade has come out with its report on spices. According to the research firm, Chilli futures may trade higher due to expectation of improvement in domestic demand and export orders from Bangladesh and Sri Lanka.

Pepper futures witnessed a mixed trend with the near month contract closed higher on short covering. The staggered delivery period that kick off Wednesday, too weigh on the market sentiments. In the near-term, pepper contracts are seen bearish due to higher output estimates for the year amid subdued overseas demand. As per the recent report from International Pepper Community, India is estimated to have exported around 1000 tonnes in October 2012 against 2500 tonnes in October 2011. During January-October 2012, export from India was around 15700 tonnes as against 18000 tonnes same period last year, down 13 percent. Up to December 2012, around 17500 tonnes of pepper is expected to be exported from India.

Jeera futures closed higher due to short covering despite weak trend in the spot markets. Staggered delivery period in NCDEX that begin from Wednesday also weighed on the price trend. In spot market, the demand from stockists stood on lower side because of ample stocks in the market, and is likely to pressurize the prices. On Tuesday, arrivals in Unjha were around 3500 bags (1bag=55kg) with spot price quoted as Rs.14200 per 100kg. According to market source, the sowing is expected to gain momentum in the coming days. As well, expectation of strong export demand at lower levels due to supply concerns from Syria and Turkey is likely to support the prices at lower side. As per trade sources, supply concerns from Syria and Turkey still exists.

Turmeric futures are expected to remain bearish on the back of weak demand and steady arrivals in major spot markets. The domestic demand stood on lower side as the stockists are waiting for the new crop to arrive in January. Weak export demand too weighs on the market sentiments. Still, the farmers are holding back their stocks expecting a rise in price on reports that the Government will fix a Minimum Support Price. High stocks are also expected to weigh on the sentiment in the near term. However, strong seasonal demand from major importing nations and local buyers during the month of January may support the prices. On Tuesday, turmeric arrivals in Erode and Nizamabad were around 4350 bags and 800 bags (1bag=70kg), respectively.

Cardamom futures ended lower due to profit booking after rising sharply in the previous sessions. Cardamom futures were higher on reports of strong demand despite better arrivals in major spot markets. On Tuesday, the arrivals and offtake at the auction were around 97 tonnes and 95 tonnes respectively. The spot price on an average traded at Rs.837.17 per kg. The maximum price quoted was Rs.1114 per kg. According to market source, traders are buying entire stocks offered at the auctions in Kerala. The arrivals in major spot markets are expected to be on normal side in the days ahead as the third round of picking is over and the remaining crop would be harvested in the coming months.

Chilli futures may trade higher due to expectation of improvement in domestic demand and export orders from Bangladesh and Sri Lanka. Increase in export enquiries from Bangladesh and Sri Lanka and rise in domestic demand from stockists is expected to push up chilli prices in the near term. On Tuesday, chilli arrivals in Guntur were around 35000 bags (1bag=45kg). The spot price for 334-variety chilli traded flat at Rs.5800 per 100kg. However, harvesting of the new crop which is expected to begin by the end of December month may limit sharp rise in prices, owing to seasonal demand. Carry-forward stocks were reported as 20 lakh bags higher than usual.

Coriander futures may extend the uptrend due to likely fall in area under the spice in key growing regions. Besides, expected rise in demand from domestic and export market is likely to push up the prices. In Eastern Europe, the production is estimated to be lower as severe winter and subsequent drought in the summer has impacted the crop. As well, likely fall in acreage in key growing region in India during the ongoing rabi season could support the prices. The area covered under coriander in Madhya Pradesh and Rajasthan is estimated to be lower by around 30-40 percent. This is likely to reduce the overall production for the year 2013. On Tuesday, total arrivals of coriander in major markets in Rajasthan were around 7500 bags (1bag=40kg).

 

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