Don’t expect much upside in Chilli: Geojit Comtrade

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Geojit Comtrade has come out with its report on spices. According to the research firm, Chilli futures had declined since the beginning of the month due to arrival pressure. However, rise in supply with the start of new crop arrivals, coupled with sluggish demand may limit the upside in Chilli prices.

Chilli futures ended in green buoyed by bargain buying at lower levels. Chilli futures had declined since the beginning of the month due to arrival pressure. However, rise in supply with the start of new crop arrivals, coupled with sluggish demand may limit the upside in chilli prices. Still, arrivals of the new crop this season may be lower as farmers estimate chilli production in Guntur to fall by 20-25 percent due to lower acreage. However total chilli production in the current year is estimated at 2.90-3 crore bags (1 bag=50 kg) against 2.80 lakh bags last year. According to trade source, harvest in major producing states will gather momentum in the next two to three weeks.

Turmeric futures extended the uptrend tracking the rise in prices in major spot markets. Improved demand from stockists pushed up the prices. But, expected increase in arrivals amid recent spike in prices may limit sharp rise in prices. According to market source, stockists were building inventories to meet export orders in March and April. Turmeric production in 2012-13 is expected to be near 50 percent lower compared to last year’s historical high of 90 lakh bags (1bag=70 kg). On Tuesday, turmeric arrivals in Erode stood unchanged from previous day at around 2750 bags. Arrivals in Nizamabad were near 1000 bags. The spot price traded at Rs.5300 -5550 per 100kg.

Cardamom closed higher due to short covering. Prices had fallen in the last few sessions due to high supply and low offtake in the physical markets. As per market source, the stockists have slowed down their purchases on account of higher prices along with sluggish demand from the north Indian buyers. On Tuesday, cardamom arrivals and offtake at the auction were near 63 tonnes and 60 tonnes respectively. The spot price on an average traded at Rs.790 per kg. The maximum price quoted was Rs.1044 per kg. The domestic production is likely to drop by 20-25 percent from the last year’s crop due to bad weather in the major belts. Meanwhile, higher global production prospects may limit sharp rise in prices.

Coriander futures ended higher on expectations of an improvement in demand from stockists and fall in acreage in major producing areas. The growers preferred more remunerative crop instead of coriander in the key producing regions of Rajasthan and Madhya Pradesh. According to market source, the total supplies of coriander in the coming year are likely to decline by almost 45 percent on the back of weak domestic production. The total production of coriander is estimated at 50-60 lakh bags (1 bag=40 kg) against 1.10 crore bags that was reported in the last year. This is mainly due to weak sowing acreage in the current year. As per trade source, total coriander exports during April-Nov 2012 is estimated to be 12 lakh bags against 8 lakh bags that were reported same period last year.

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Source: http://www.moneycontrol.com/news/brokerage-recos-commodities/dont-expect-much-upsidechilli-geojit-comtrade_797078.html

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