Posts Tagged ‘chilli’

COMMODITY WEEKLY COMMENTARY 11th – 15th October

International gold hit yet another new high and tested $1364 as the US currency slumped to fresh 15-and-a-half year lows against the Japanese Yen. The euro and British pound both neared 8-month highs vs. the dollar after their central banks failed to cut rates or expand their quantitative easing. The shiny metal continued breaching new high records by taking advantageof concerns surrounding global recovery which raise speculations that central banks will add tostimulus to bolster growth. This time domestic gold and silver also rose to their fresh highs on MCX. Base metal prices traded on the mixed note with lead prices ending in red while copper along with aluminium and nickel prices managing to end in the green territory.

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The base metal prices remained volatile mainly due to weakness in the dollar index and profit taking at highlevels. In energy counter crude oil remained volatile as prices got support by a weaker dollar and investors’ demand for higher-yielding assets. Prices were also under pinned by the drop in motor gasoline and distillates inventories off setting the buildup in crude inventories.Regarding agro commodities, oil seeds and edible oil counter revived on some bargain buying atlower level amid falling dollar index. Strong buying by soyabean millers together with rising soyameal export also encouraged buying in both spot and future market. Fresh arrivals in Haryana and Rajasthan washed out the profit of guargum and guarseed futures. Prices were also discouraged by strong production estimates of guarseed in the current year.

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Despite tight supply position against strong demand pepper futures closed the week on negative note on profit booking. Turmeric rose on improved demand. Chilli was sideways with upside bias on mixed fundamentals while jeera and cardamom moved southward. Receding stocks in major mandies accompanied with strong export demand by traders and exporters gave terrific rise tothe mentha prices. Even in future market it breached the level of 950 on MCX. Mint exports inApril- August, 2010 surged by 2 percent to `723.95 lacs against 595.57 lacs reported last year inthe same period. Chana appeared shy to breach the resistance of 2300 and it closed down on profit booking at higher levels.

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Commodity Weekly Commentary 20th – 24th September 2010

Its seems that sky is the limit for bullion counter now a days, as prices surged high to their life time highs on domestic bourses. However, strong Indian rupee limit the upside movement in prices in both gold and silver. In international markets gold hit a record high above $1,280 per ounce last week, as currency market jitters and broader economic uncertainty enticed more investors towards the metal’s safe-haven credentials. The metal’s rise this year has been fueled largely by investor nervousness that stemmed from the fallout from the euro zone debt crisis and from economic data that has suggested global economic growth may be losing momentum.

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Base metals also surged high last week on weakness in dollar index and after reassuring comments from China’s central bank about its plans to keep monetary policy loose. In energy counter crude oil lost its esteem and traded down. Crude traded around $76 per barrel amid low U.S inventories, while Chicago pipeline leak continues weighing on prices as new Tropical Storm Karl threatens the Gulf of Mexican. The EIA report showed a drop in fuel demand by 1% to 19.5 MB. Gasoline also shed 694 thousand barrels to 224.5 MB. This comes at a time where imports have reached their lowest level in five months.

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Unlike metals, agro commodities fell like nine pin, even fall in dollar index could not supported them very much. It was not a good week for spices as sellers were more active than buyers in spot market. Future market reacted in the same fashion. Panic selling was continued in turmeric, jeera and chilli as well. Cardamom was also the victim of arrival pressure and closed down. Stockiest liquidation at higher levels dragged down chana futures on NCDEX as well. With declining prices of churi and korma, guarseed and guargum continuously traded southward.

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Wheat closed down on negative cues. Furthermore, traders preferred profit booking at higher levels in menthe futures. Strong crop projection of soya bean along with rise in crop projection of mustard seed crop in rabi season compelled oilseeds and edible oil futures to trade in negative zone. Higher domestic stocks, imports in the middle of arrivals in the domestic mandies further pressurized the oil seeds prices. As per expectation, the total crop size of soyabean in the current season is likely to be around 95 lakh tonnes, up 2% from last year.

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However there was a commodity which surprised the market with its nonstop three week upside on higher offtake amid tight supply and it was maize.

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COMMODITY WEEKLY COMMENTARY 13th – 17th September 2010

Silver along with gold once again shoot up last week as international prices tested $20 and $1255 respectively on COMEX division. Each time a rise in gold hits the headlines, it steals the limelight from silver. But this time silver has not only followed rallies in gold, but usually out performed, as can be seen in a fall in the gold/silver ratio. Prices went towards north last week as global stocks tumbled and the euro slipped on renewed fears about the health of the global economy.

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Base metals witnessed see saw movements as highly volatile currency market is rolling the prices in both direction. However, bias remained down side as fresh concerns about the health of the European banking sector fed a wave of risk reduction in the broader market and helped drag red metal (copper) prices away from four-month highs. Energy counter also remained under pressure as investor’s eye U.S economic strength and demand on fuel, while the dollar gains against a basket of foreign currencies amid the jittery sentiment. In other related news the dull hurricane season also limiting the upside in prices. The U.S. National Hurricane Center was monitoring three tropical systems in the Atlantic basin, one approaching the Caribbean Sea and two near Africa’s west coast. The NHC said cloudiness and showers over the Leeward Islands and northeastern Caribbean Sea were associated with Gaston’s remnants, but the system had just a 20 percent chance to become a tropical cyclone.

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Despite holiday’s shortened week, agro commodities witnessed active trading. After a noteworthy decline, oil seeds and edible oil counter was somehow able to cap the downside on the news of better soyameal export amid short covering in overseas market. Crude palm oil was also trading up. On the other hand upside was limited on the absence of fresh demand.

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Favourable weather and better outlook of crop shed the gain of wheat futures. Northward journey of maize futures supported by multi month’s higher prices in CBOT surprised the market players. Spices counter traded with downside bias moreover. Chilli, jeera, turmeric and cardamom were down on lower offtake in physical market. Turmeric futures were in complete grip of bears on lower demand in spot market. It touched multi week lows on NCDEX as well. It was only pepper in spices counter which propped up on fresh buying. Mixed sentiment in guar compelled guarseed to trade in slim spread whereas guargum was rangebound with upside bias.

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Chana continued to witness downtrend following lower demand in the domestic market.

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ZONEWISE AGROMET ADVISORIES

Monsoons are needed to nourish crops and supplywater for farming communities. The quantity of monsoons in India has increased in the last 50 years. This year the much awaited South-WestMonsoon has reached the Indian territorialwaters. Below written are presented some Zonewise Agromet Advisories by taking the major crops into consideration.

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NORTH WEST INDIA [J & K, H. P., UTTARAKHAND, PUNJAB, HARYANA, DELHI, UP, RAJASTHAN]

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•Weather conditions are favourable for sowing of summer green gram and black gram in Delhi, select varieties for – Green gram– Pusa Ratna, Pantmung 1, Samrat, SML-668, Pusa Vaisakhi, Pusa Vishal, Pusa 105, PDM-11, SML-32; for Black gram – Pusa 1,AjadUrd 2,NarenderUrd-1,T-9, P.D.U.-1.

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•Harvesting of the already matured mustard is advised in Haryana, Punjab, Uttar Pradesh, Uttarakhand, Rajasthan and Delhi & Immediate threshing after drying is advised.Attack of painted bugwill bemore if crop is kept in the field for long time after harvest. Farmers are advised to plough the field deep in hot summer to destroy the various stages of pest under heat.

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EAST INDIA[ JHARKHAND, BIHAR , ORISSA ,WEST BENGAL & SIKKIM ]

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•In view of prevailing dry weather condition during last few weeks and also during next fewdays alongwith persisting high temperature, farmers are advised to apply light and frequent irrigation to the standing rabi crops in Bihar and Jharkhand.

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•As therewas excess rainfall during last twoweeks in Sikkim, farmers are advised to postpone irrigation to large cardamom, potato andmaize.

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•Due to high humidity and increased temperature in the flowering and fruiting stages, chilli may be infested with blight and die. Black depressed small black, circular spots are appeared on the skin of fruits. Two spraying any one of the fungicides like Carbendazim 50WP @ 1g or Saaf @ 2g / litre of water at 10 days intervals,when the disease symptoms are appeared.

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NORTH EAST INDIA[ARUNACHALPRADESH,NMM&T,ASSAM,MEGHALAYA]

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•Utilizing the recent pre-monsoon showers and expected rain, undertake sowing of the crops likemaize, jute,mesta and summer vegetables.

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•Fieldmust be ploughed and get ready for planting of ginger and turmeric inAssam.

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•To prevent Black Heart Disease in potatoes in Assam, it should not be stored and transit at high temperature (above 320C). The storage rooms should be well ventilated and bags should not be piled up very high.

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SOUTH INDIA[TN,AP, KERALA, KARNATAKA, LAKSHADWEEP,ANDAMAN&NICOBAR ISLANDS]

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•Light rainfall is expected in Brahmavar region; hence farmers are advised to take precautions in drying of pulse crops like green gram, black gram, cow pea and cashewnut etc.

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•Farmers in Central Dry zone of Karnataka are advised to apply irrigation to areca nut and coconut and pepper as temperature is increasing and to avoid sun scorching.

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WEST INDIA[GOA,MAHARASHTRA,GUJARAT]

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•Due to increase in temperatures summer chilli is likely to be infested by thrips & mites inMaharashtra, sprayMethyl dimeton 25 EC@15ml or Dimethoate 30 EC2 16 ml + Sulphur 80 %@20 g in 10 litreswater.

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•As dry weather prevailed during last week over the State and dry weather is likely to prevail during next fewdays, apply protective irrigation to the standing crops of Maharashtra. In view of persisting high temperature in East Vidarbha, farmers are advised to apply light and frequent irrigation to the standing crops.

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CENTRAL INDIA [M.P.,CHHATTISGARH]

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•Weather conditions are favourable for proper germination of maize to be grown for green cobs in Chattisgarh Plain zone.Hence, the farmerswho have assured irrigation facility are advised to complete the sowing of summer maize at the earliest.

(source: Indian Meteorological Department)

CHILLI

Description

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Chilli is the dried ripe fruit. It is widely distributed in all tropical and sub-tropical countries including India.

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Production in india

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In India, Chilli is a kharif season crop and an important cash crop. It is grown in all parts of India covering about 7,33,800 hectares. The harvesting season starts in January and arrivals peaking in February-April. Sowing is held mainly during August-October. Several varieties of chillies are cultivated in India. Sanam, Bydagi, Wonder, Hot, Jwala and LC334 are the most popular amongst them.

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India is the largest producer and consumer of chilli in the world contributing nearly 50 percent of the global output. So any decline in output would have an immediate impact on prices. Climatic conditions are also the major variables which make chillies hotter.

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In peak season, nearly one billion bags of chillies (a bag contains 35-50 kg) worth Rupees 500 crore arrives in the Guntur market. Other major markets are Khammam and Warangal in Andhra Pradesh and Bellary and Raichur in Karnataka.

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According to the Spices Board, Consumption of chilli is increasing substantially as the branded powder sales growing at a compound annual growth rate of 11%.

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Over 30 percent of chillies produced in India are converted into powder.

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International Scenario

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In chillies, the major producing countries are India, China, Peru, Bangladesh, Hungary and a few others. Production of major countries is growing at a CAGR of 5.2 percent. World trade in chillies is put at 4 lakh tonnes. The Indian share in global production range from 50-60 percent, China and Peru are growing fast and Hungary shows a de-growth. However, India is the only one source for hot chillies.

Export Scenario

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India is a major exporter of chillies with major destinations of West Asia, Far East, USA, Sri Lanka and Bangladesh. India also exports chillies oleoresins in good quantities.

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In the first half of 2009-10, exports to Pakistan were nil as against 22,000 tonnes during the year-ago period. Indian chilli exports fell in the first half of the current financial year as China importing it from the Pakistan market. Chilli exports picked up from October and during January 2010, India exported around 17,500 tonnes valued Rs 120 crore as against 11,500 tonnes valued at Rs 69 crore. In long term, exports are likely to increase as the Chinese production is on the lower side.

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Current scenario

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The total stock position of chilli in Guntur mandi of Andhra Pradesh at 48 lakh bags against 25 lakh bags reported last year in the same period. The total production of chilli in the current year is also likely to be around 1.68 lakh bags against 1.25 lakh bags reported last year due to steady prices of chilli during the sowing period.

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Currently chilli prices are trading in pressure as arrivals increase. But good demand and cold chain facilities developed by affluent farmers are likely to help stabilise the chilli prices. Heavy arrivals also promote more exports on lower prices. The forward month contract is trading in contango (i.e prices of next month contract is higher than the most active traded current month contract.

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The active June contract chilli futures made a low of Rs.4520 per quintal from a high of Rs.5500 per quintal and declining by 21.68 %. Chilli future (June_NCDEX) has seen a drastic fall in regards to volume, from 2000 lots to 400 lots in these days, while the open interest has seen a continuous rise.

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Weekly Update 3rd- 7th May 2010

The week started on a positive note on the back of good global tidings. Markets worldwide have gained after Greece decided to tap into the EU- IMF loan, but the rally could not be sustained and fell like nine pins as heightened sovereign debt troubles in Europe sent global markets in a bit of a tizzy.

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On the global front, FOMC maintained the target range for the federal funds rate at 0 to 1/4 percent as the economy is still seeing high unemployment, modest income growth, employers reluctance to add to payrolls & bank lending contraction. It said that it would continue to monitor the economic outlook and financial developments and would employ its policy tools as necessary to promote economic recovery and price stability. Japan saw unemployment rate climbing to five percent indicating job rebound may moderate. Europe equity markets fell after Standard & Poor’s downgraded three Eurozone members.

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Investors withdrew money from the Europe equity funds & debt funds saw net inflow. Closer home too, markets witnessed volatility as traders rolled over their positions in the derivatives segment from the April 2010 series to the May 2010 series. On the flip side the Q4 March 2010 corporate earnings announced so far have been good with net profit of a total of 441 companies rose 28.70% to Rs 29125 crore on 36.40% rise in sales to Rs 249959 crore in the quarter ended March 2010 over the quarter ended March 2009. The IMF is optimistic about the growth of Indian Economy. It has estimated that India’s $1.2 trillion economy will expand 8.8% this year and 8.4% next year, higher than it projected in January. While RBI expects India’s economy to expand 8% in the year ending March 2011 (FY 2011) with an upward bias expecting normal monsoon this year and sustenance of good performance of the industrial and services sectors on the back of rising domestic and external demand. The IMD has predicted normal monsoons in 2010 at 98% of Long Period Average subject to an error of (+/- 5%). Besides the passing of the Finance Bill 2010 by FM on Thursday with some minor changes in tax proposals may boost sentiment as the government has pledged to the path of fiscal consolidation rather than political opportunism.

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Overall the world markets were quite volatile in the week gone by with wild swings on both sides. Shanghai and Hang Seng could not recover from the fall though other markets recovered. Base metals also took a sharp correction. The strength in the stock markets is there more in cash stocks rather than front line heavy weight index stocks. Nifty has support between 5200-5150 levels & Sensex between 17400-17300 levels.

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Recent moves in commodities are showing that they are moving in different directions. It is indicating the state of uncertainty, where commodities are moving on their own fundamentals. Safe haven buying may keep gold in upper range. While after a steep fall, base metals may try to trade in a range.

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Approaching summer demand amid availability of ample crude stocks can keep crude oil in a range. Some agro commodities viz., pepper, jeera, chilli, cardamom, mentha etc., may surge on good overseas as well as domestic demand.