Posts Tagged ‘turmeric’

Ace Derivatives & Commodity Exchange

Ace Derivatives & Commodity Exchange with over five decades of impeccable experience in commodity trading, has recently transformed itself and established an online multi-commodity platform with a pan-India presence. Kotak Group is the anchor investor in ACE Commodity Exchange with a 51 per cent stake, while Haryana”s Hafed has a 15 per cent interest and banks like Bank of Baroda, Union Bank and
Corporation Bank have an over 14 per cent stake. The remaining equity is held by Ahmedabad Commodity Exchange members.

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Products offered

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Ace offers futures trading the following commodity groups:

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Bullions: Gold, Silver

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Energy: Crude oil, Natural Gas

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Agri

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•Castor Seed (Ex-Warehouse Ahmedabad)

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•Mustard Seed (Ex-Warehouse Jaipur-inclusive of all taxes but exclusive of Sales tax/ VAT)

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•Soybean Ex-Warehouse Indore -inclusive of all taxes but exclusive of Sales tax/VAT)

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•Refined Soy Oil (Ex-Tank Indore-Inclusive of all Taxes and Levies)

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•Pulses

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•Chana

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•Spices

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•Turmeric

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The Kotak-anchored exchange started futures trading in soybean, soyoil, rape/mustard seed, chana and castor seed. With the launch, the first set of contracts will be available for trade for delivery on November 20, December 20 and January 20.

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The lot size of trading is fixed at 10 tonnes of each contract. According to the exchange data, the castor seed contract for December-expiry opened at `3,442 a quintal, chana at `2,440 a quintal, soyabean at `2,244 a quintal, mustard seed at `573 for every 20 kg and refined soy oil at`545.90 for every 10 kg.

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Trade Timings:

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Agri: 10:00 a.m. to 05:00 p.m. (Monday to Friday)

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10:00 a.m. to 2:00 p.m. (Saturday)

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Bullion/Metals: 10:00 a.m. to 11.30 p.m. (Monday to Friday)

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10:00 a.m. to 2:00 p.m. (Saturday)

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Risk Management

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The Exchange assumes the counter party risk by guaranteeing trade settlement. The Risk Management framework of the Exchange ensures timely settlement.

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More hands working on…..

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Haryana State Cooperative Supply and Marketing Federation (Hafed) is planning to set up spot exchanges of the recently launched Ace Derivatives and Commodity Exchange (ACE) in mandis soon. The association of Hafed with the ACE will help it in playing the role of an aggregator and a risk manager on behalf of thousands of farmers, who will be motivated to become participants of the ACE in the coming decade.

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In addition to its convenient trading platform, Ace provides a robust clearing & settlement infrastructure that supports the complete process of trade intermediation – including registration of trades, settlement of contracts and mitigation of counter party risk; giving traders the peace of mind in times of increased market volatility.

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Turmeric………Golden Spice

Turmeric is a very important spice in India from ancient times. India is the biggest producer with account of nearly 90% of the world’s total production and consume 80%of it. Turmeric, basically a tropical plant of ginger family is the rhizome or underground stem Global Trade and production The main producing countries of turmeric are India, Pakistan, Bangladesh, Sri Lanka,Taiwan, China, Burma (Myanmar) and Indonesia.

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The total yearly consumption of Turmeric all around the globe is approximately 38 Lakh bags to 40 Lakh bags.India is largest exporter (approximately 90%) of Turmeric. Taiwan, Thailand and other Southeast Asian countries are other exporter. United Arab Emirates (UAE) is the major importer accounting for 24.06 % of the total exports followed by United States of America (USA) with 12.93 %. Japan, Sri Lanka, Iran, United Kingdom and Middle Eastern countries are other major Importers of Turmeric.Production of Turmeric in India Generally, India produces almost 7 to 9 lakh ton per annum.

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The important varieties produced in India are: ‘Alleppey Finger’ (Kerala) and ‘Erode and Salem turmeric’ (Tamil Nadu), ‘Rajapore ‘and’ Sangli turmeric’ (Maharashtra)and ‘Nizamabad Bulb'(Andhra Pradesh).As per latest Statistics last year India has 185320 hectares under turmeric cultivation with a total production of 7.01 lakh tonnes. Andhra Pradesh topped both in area and production. Andhra Pradesh contributes nearly 31 per cent of the area under turmeric.Acreage under turmeric in the State has increased to 0.65 lakh hectares as on October 13th this year.

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Tamil Nadu is second largest producer state. In Tamil Nadu, the area under turmeric is expected to increase 9 per cent to 0.43 lakh hectares.India exports about 10% e.g. 40,000 to 50,000 tons of turmeric per annum. Turmeric isthe third-largest spice exported from India. In terms of quantity and value, it accounts about 12% and 5% respectively. USA, Malaysia and china are major importer of Indian turmeric.Turmeric exportswere lower in theApril-August 2010 quarter with a slip of 13%in volume to 22,500 tonnes compared to 25,500 tonnes in same period of last year.

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Prices seasonality

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Turmeric prices will be hovering lower between January and June.This could be mainly attributed to supply pressure due to new crop arrivals. From June onwards prices will start moving up as the market approaches lean season. Prices peak during October and December month of every year. As per seasonal trend,words of caution may enter into turmeric prices, as the trade may remain in a broader range with some bulk buying & festive season demand. Generally, the new crop hits the market during February-March. But this year it is expected to arrive a little early. Farmers will bring the crop early due to high returns earned last year. Therefore, increased arrivals at spot market will put pressure on the prices next year.

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Turmeric update

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•Turmeric production in 2010-11 is expected to improve by 43-45 per cent to 65-70lakh bags compared with 48 lakh bags in 2009-10.

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•Turmeric production in Andhra Pradesh in 2010/11 is expected to jump by 40 percent to 368,000 tonnes compared to 263,000 tonnes, the state horticulture department data showed.

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•Farmers considerably increased the area under the spice as prices were remunerative

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•The total stocks of turmeric are currently at 11 lakh bags against 7 lakh bags reported last in the same period.

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•The price of turmeric soared to an all time high of `15,500 a quintal in the Erode market.

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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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News Round Up 2nd -6th August 2010

•India’s food ministry proposes to sell 2.74 million metric tonnes of food grain over the next six months from federal stocks in a bid to free-up warehouse space.

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•The government has allowed export of 3,00,000 tonnes of rice and wheat through diplomatic channels to Bangladesh and Nepal.

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•Soyabean Processors Association of India expects soybean production in the country at 85 lakh tonnes (lt), which is far below last year’s 95 lt.

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•Turmeric area in Andhra Pradesh stood at 0.53 lakh hectare against 0.41 lakh hectare, nearly 101 % of the normal area covered.

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•Water level in India’s main reservoirs was at 19 per cent of capacity on July 22, 2 per cent higher than the previous week’s level, government data showed.

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•Wholesale Price Index For food articles 9.67% on week ending 17 July against 12.47% previous week.

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•Commodity futures market regulator FMC may consider the creation of an appellate tribunal akin to that in stock markets for the resolution of disputes between clients and brokers.

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•Supply from the OPEC (except Iraq) has averaged 26.95 million barrels per day (bpd) this month, up from 26.75 million bpd in June, according to the survey of oil firms, OPEC officials and analysts.

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Commodity Weekly Commentary 2nd – 6th August

Bullion counter hammered down last week as prices fell like nine pins after investors wind up their long positions in gold and silver. Gold slid nearly $100.0 from the historic record highs, recorded June 21 at $1265.30 an ounce, affected by traders reducing their stakes and investments in the SPDR Gold Trust, the world’s largest exchange-trade fund.

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The absence of fundamentals from Europe, led traders to turn to the US for signs of global recovery, but the disappointment came from US durable goods report which slumped in the month of June by 1.0 percent, compared with a revised -0.8%. Base metal pack extended their previous week gains as global inventory draw down and gains in the euro boosted the metals despite a surprise decline in U.S. orders for long-lasting
goods.

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Western world unwrought aluminium stocks fell to 1.192 million tonnes in June from a revised 1.306 million tonnes in May, industry data showed. Moreover, gains in equity market also supported the prices as investors anticipate robust demand in near future. In energy counter crude oil prices wiped out its previous week gains and just fell from the level of $80 after the U.S Energy department reported a surge in inventories in the US. However, crude oil prices managed tom conquer some part of the lost territory mainly on the back of the softer US dollar index.

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However, natural gas futures ended higher last week, backed by firmer cash prices and a government report
showing another light weekly inventory build despite ongoing concerns about too much supply.

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As regards agro commodity, the week gone by majorly known for profit booking at higher levels in many commodities. Traders preferred profit booking in most of the spices as they became overbought in the market. Cardamom futures caught the attention of traders as they traded in lower circuits throughout the week, supported by weak spot market.

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After trading in positive territory for many weeks, finally jeera, turmeric and pepper saw pause in the rally as stockiest released some stocks at higher levels. Good monsoon and improved sowing in producing area dragged down guar counter in both spot and future market.

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What surprised the market was the upside move oil seeds. R M seed, refined soya oil and crude palm oil witnessed nonstop four week rally on confident move in CBOT amid fall in dollar index.

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Maize futures ignored the positive sentiments of CBOT and moved down on profit booking. Additionally, soyabean saw good short covering. Good export demand supported mentha futures to recover from its week low. Weak sentiments in spot market continuously hammered the potato futures.

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Weekly Update 29th March – 02nd April

The domestic markets had a mixed week; it started weak following RBI hiking the repo and reverse repo by 25 basis points each and growing concerns from the 16-nation Euro zone—first over conflicting signals from the currency bloc on resolving Greece’s debt problems and second over Fitch Ratings lowering Portugal’s sovereign credit outlook.

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But, concluded the week on green zone buoyed by continued liquidity inflow and earnings optimism; both the indices Sensex & Nifty, saw the highest closing levels in more than two years. FIIs bought stocks worth Rs 12125.81 crore this month till 25 March 2010.

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On the whole, over the last few months the confidence of global & domestic investors has resulted in an excellent run up in the domestic markets. Closer home, further rate hike together with hike in CRR is expected in order to anchor inflationary expectation in the next RBI meet which is scheduled on 20th April.

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Increasing capacity utilisation and rising commodity and energy prices are exerting pressure on overall inflation. Taken together, these factors heighten the risks of supply-side pressures translating into a generalised inflationary process. Food inflation in India dipped marginally falling to a five-month low.

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Inflation for the Food Articles group dropped to 16.22% in the week ended March 16, as compared to 16.3% in the previous week. While it is largely anticipated that this time around the increase in interest rates would not be a spoil sport for the markets as the signs of recovery in the growth are promising. Data on Industrial production & more specifically the acceleration in the growth of the capital goods sector points to the revival of investment activity.

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Expectations of the good corporate results as indicated by buoyant advance tax figures & the forecast for the southwest monsoon for 2010 is likely to play a catalyst role for the next direction of the market. On the global economic front; in a bid to restore confidence in their common currency, all 16 euro zone leaders have reportedly agreed to provide joint financial assistance to the debt-laden Greece in tandem with the IMF.

In the US front, Unemployment increased in 27 states in February and dropped in seven, a sign the labor market needs to pick up across more regions to spur consumer spending and sustain the economic recovery.

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Trend of world stock markets is up though China is showing some weakness along with some weakness in commodities. US dollar index rise above 81 has brought uncertainty in world markets and the Euro zone problem in Greece is giving uncertainty to Euro. One should trade carefully in such markets. Nifty has support between 5150-5050 and Sensex between 17200-16800 levels..

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Commodities are moving on their own fundamentals. Recent blow up in dollar index could not give much impact on the commodity prices as it was expected earlier in market. However, with the recent rise in dollar index, upside in commodities seems to be limited. Commodities are now expected to trade in a range after a volatile week. Expected improvement in employment data from US is likely to cap the downside. Agro commodities can perform mix. Spices, especially turmeric and pepper may trade in a range after an upside rally. Same trend may go with chana futures as well whereas guar may firm further.

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Stay Tuned for More Updates :)