THE spices counter on agri bourse NCDEX has been witnessing a bout of profit-booking over the past fortnight. Jeera, turmeric and pepper were overbought and due for correction, said analysts. They expect jeera and turmeric to see a further downside pressure from current levels and pepper to be rangebound.
Prices of these commodities shot up on account of supply constraints and export demand. However, the appreciation of rupee against the dollar has weakened export demand in the case of jeera (exporters will also face competion from Syria and Turkey) and pepper, while the arrival of south-west monsoon in Tamil Nadu has dented trader sentiment in turmeric.
The front month contract in turmeric has declined by nearly 10% since May 18 to Rs 4,975 a quintal (100 kg) on Thursday. Similarly, jeera has fallen by over 9% since May 21 to Rs 10,529 per quintal and pepper has lost value by 4% over the fortnight to Rs 12,413 per 100 kg.
The decline in bullish sentiment in these commodities is evident from the reduction in open interest (OI) along with a fall in prices. The OI for June contract of turmeric is down by 45% since May 18 to Rs 20,580. Similarly, the OI of jeera and pepper are down by approximately 26% to Rs 6,294 and Rs 4,060, respectively, since May 21 and May 22.
"Turmeric should further fall by another Rs 500 as monsoon has already hit Tamil Nadu which will uplift sowing sentiments," said Harish Galipelli, the research head at Karvy Comtrade. According to analysts, the imposition of special margin on turmeric by FMC on April 25 also dented sentiment.
Mehul Agrawal from Sharekhan Commodities, too, is bearish on turmeric for medium term as he expects sowing (June/July) to increase due to high prices. But a local Duggirala-based trader said that there is still scope for an increase of Rs 60 per 100 kg due to low stocks. In jeera, prices are expected to be under pressure and according to Ali Muhhamad Lakdawala from Anand Rathi Commodities, Syria and Turkey are expected to have a good crop which may hit exports from India as Syria crop is preferred in the international market. Pepper has been volatile and prices are expected to trade in a range, according to Mr Galipelli, as there are no major triggers.
Locally, the supply is tight and internationally prices are firm. Vietnam is not aggressively releasing its stocks and is exporting more coffee because of better price realisation. Crop from Indonesia, which will arrive in June, is also expected to be low and the country has already exhausted its old stocks. A prominent Kochi-based pepper exporter feels that prices should move up.. "Local supplies are tight and Vietnam has already exported 55,000 tonne, so they are in no hurry and are gradually increasing the prices," he said.
nidhi.sharma1@timesgroup.com
Prices of these commodities shot up on account of supply constraints and export demand. However, the appreciation of rupee against the dollar has weakened export demand in the case of jeera (exporters will also face competion from Syria and Turkey) and pepper, while the arrival of south-west monsoon in Tamil Nadu has dented trader sentiment in turmeric.
The front month contract in turmeric has declined by nearly 10% since May 18 to Rs 4,975 a quintal (100 kg) on Thursday. Similarly, jeera has fallen by over 9% since May 21 to Rs 10,529 per quintal and pepper has lost value by 4% over the fortnight to Rs 12,413 per 100 kg.
The decline in bullish sentiment in these commodities is evident from the reduction in open interest (OI) along with a fall in prices. The OI for June contract of turmeric is down by 45% since May 18 to Rs 20,580. Similarly, the OI of jeera and pepper are down by approximately 26% to Rs 6,294 and Rs 4,060, respectively, since May 21 and May 22.
"Turmeric should further fall by another Rs 500 as monsoon has already hit Tamil Nadu which will uplift sowing sentiments," said Harish Galipelli, the research head at Karvy Comtrade. According to analysts, the imposition of special margin on turmeric by FMC on April 25 also dented sentiment.
Mehul Agrawal from Sharekhan Commodities, too, is bearish on turmeric for medium term as he expects sowing (June/July) to increase due to high prices. But a local Duggirala-based trader said that there is still scope for an increase of Rs 60 per 100 kg due to low stocks. In jeera, prices are expected to be under pressure and according to Ali Muhhamad Lakdawala from Anand Rathi Commodities, Syria and Turkey are expected to have a good crop which may hit exports from India as Syria crop is preferred in the international market. Pepper has been volatile and prices are expected to trade in a range, according to Mr Galipelli, as there are no major triggers.
Locally, the supply is tight and internationally prices are firm. Vietnam is not aggressively releasing its stocks and is exporting more coffee because of better price realisation. Crop from Indonesia, which will arrive in June, is also expected to be low and the country has already exhausted its old stocks. A prominent Kochi-based pepper exporter feels that prices should move up.. "Local supplies are tight and Vietnam has already exported 55,000 tonne, so they are in no hurry and are gradually increasing the prices," he said.
nidhi.sharma1@timesgroup.com
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