Posts Tagged ‘domestic’

Coffee Board Cuts Output Estimates

The Coffee Board of India slashed India’s 2009-10 (October-September) output projection by approximately 5.5% to 289,600 tonnes. Reduced estimation is mainly due to crop damage by heavy rains in major growing states.

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“The reduction in crop output is seen largely in Karnataka, while regions in Andhra Pradesh, Kerala and Tamil Nadu showed a nominal drop,” Coffee Board Chairman GV Krishna Rau said.

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He said heavy rains in Karnataka during October-November led to adverse crop conditions like berry dropping and wet feet in certain growing areas. Karnataka alone accounts for a fall of 15,775 tonnes of the estimated 16,700 tonnes decline in coffee output.

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In Other major Commodities Update, there is news of pepper futures fell sharply on bearish sentiments that pulled down the prices of all contracts.

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Pepper Future Report Fall

On Monday, pepper futures fell sharply on bearish sentiments that pulled down the prices of all contracts.

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Bearish sentiment that new crop would arrive any time in the market and there is no domestic demand to absorb it was being spread widely.

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Besides, 1,200 tonnes of pepper’s validity will expire on Feb 5 and hence it will be liquidated in January and that will come for delivery next month, thus goes the misinformation, market sources said.

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December contract on NCDEX dropped by Rs 367 to close at Rs 14,055 a quintal. January and February fell by Rs 376 and Rs 382, respectively to close at Rs 14,332 and Rs 14,560 a quintal.

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Total turnover increased by 3,064 tonnes to 6,925 tonnes. Total open interest moved up by 391 tonnes to 13,113. December open interest fell by 499 tonnes while that of January increased by 755 tonnes and February up by 92 tonnes.

Sweetness Of Sugar – Part 1 :)

Hello Friends here we come up with our another write up on “Commodity Corner Series” 🙂

Sweetness of Sugar

Sweetness of Sugar

We would touch upon aspects like seasonality,cyclic nature and analysis of price trend of Sugar.

The Commodity

Sugar is the most plentiful economic sweetener and India’s second largest agro-processing industry.

There are more than 600 installed sugar mills in the country.

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The Seasonality & Cyclic Nature

The crushing season in the country generally starts from October and reaches its peak in January before March end or April of the next year.

It has been seen that during this period, supply arrives in the market and resultantly prices starts falling.

The cyclic pattern of the sugar industry lasts for 3-5 years.

Currently, the domestic sugar market is entering into a severe shortage phase due to sharp decline in production.

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Analysis Of Price Trend

Tracking short term movements as well as the longer term trends seen in and over the last years, one can analyse and assess its prices.

Since 2006, Sugar has been widely talked displaying a continuous bullish rally both in domestic & international market.

In domestic markets, Sugar prices remained bearish in the most part of the year 2007.

Prices surged by almost 30% in the first half of 2008 & regained its sweetness with supportive factors like lower production estimates and rise in export demand.

From July 2008 sugar prices have been maintaining its bullish trend.

In January, 2009 sugar prices reached record high levels.

With an eye on the rising prices, the Central Government announced measures with aim to control sugar prices.

In the month of May, 2009 world sugar prices have surged to a near-three year high, on the back of speculative buying by
funds betting on supply shortfalls in India and Pakistan.

Since October (the beginning of the 2008-09 sugar season), prices in spot and futures market have witnessed a bull run due to lower production estimates for the season.

Market has already breached the long term bearish trend line and presently trading in an interim bullish trend channel.

Speculators, and especially large traders, have really embraced the long side of the Sugar market.

The commodity has one of the best fundamental pictures right now and it is getting a good deal of solid buying.
The sugar market is overbought but it seems that it still has room to move higher in the longterm bull market than imagined.

It has been one of the better performers of the commodities market.

The price of Sugar has more than tripled in about 3 years.

Though, Sugar seems set to lose some of its sweetness for consumers in the time to come.

Sugar prices recently touched a 28-year high of 25.39 cents per pound on September 30, 2009.

This is likely to climb up going forward, because imports by countries such as China, Russia, Mexico and India are set to rise. These countries are consuming more, but producing less of the commodity.

Sugar futures tended to do well in these years.
An investor could have increased his return variability in these years without sacrificing any of his return.

Stay Tuned for more on Sugar Market in commodity corner 😉

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