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![Page 1: 1 Spices Of Fortune All India Spices Conference 7 th Oct 2006, Bangalore A presentation by the IL&FS Commodities Division Chillies.](https://reader031.fdocuments.in/reader031/viewer/2022032606/56649e9d5503460f94b9e92f/html5/thumbnails/1.jpg)
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Spices Of FortuneAll India Spices Conference
7th Oct 2006, Bangalore
www.investsmartindia.com
A presentation by the IL&FS Commodities Division
Chillies
![Page 2: 1 Spices Of Fortune All India Spices Conference 7 th Oct 2006, Bangalore A presentation by the IL&FS Commodities Division Chillies.](https://reader031.fdocuments.in/reader031/viewer/2022032606/56649e9d5503460f94b9e92f/html5/thumbnails/2.jpg)
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?????
6500/qtl !!!
@
Chillies
www.investsmartindia.com
A presentation by the IL&FS Commodities Division
Who has stolen my chillies ?
![Page 3: 1 Spices Of Fortune All India Spices Conference 7 th Oct 2006, Bangalore A presentation by the IL&FS Commodities Division Chillies.](https://reader031.fdocuments.in/reader031/viewer/2022032606/56649e9d5503460f94b9e92f/html5/thumbnails/3.jpg)
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Agenda of the presentation
1. Overview
2. Supply-n-Demand
3. Challenges Ahead
4. Chilli on Exchange
5. Exchange Advantages
6. Price Outlook
![Page 4: 1 Spices Of Fortune All India Spices Conference 7 th Oct 2006, Bangalore A presentation by the IL&FS Commodities Division Chillies.](https://reader031.fdocuments.in/reader031/viewer/2022032606/56649e9d5503460f94b9e92f/html5/thumbnails/4.jpg)
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Agenda
India
Major Producer, consumer & exporter in the world
Chilli accounts for 20-30% of total Indian spices exports valuing approx 400-500 crore
Practically all the states in India grows chilli resulting in arrivals round the year.
Andhra Pradesh is a leading producer of commercial grade of chilli
Overview
![Page 5: 1 Spices Of Fortune All India Spices Conference 7 th Oct 2006, Bangalore A presentation by the IL&FS Commodities Division Chillies.](https://reader031.fdocuments.in/reader031/viewer/2022032606/56649e9d5503460f94b9e92f/html5/thumbnails/5.jpg)
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Agenda Indian Supply –n-Demand
State Wise contribution of Chilli
27%
19%5%12%
9%
2%
8%
18%AP
Karnataka
MP
Maharashtra
Orissa
UP
TN
Others
![Page 6: 1 Spices Of Fortune All India Spices Conference 7 th Oct 2006, Bangalore A presentation by the IL&FS Commodities Division Chillies.](https://reader031.fdocuments.in/reader031/viewer/2022032606/56649e9d5503460f94b9e92f/html5/thumbnails/6.jpg)
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Agenda
Global
India contributes for around 25% of world chilli production
Other major producer are China, Pakistan, Morocco, Mexico, Spain and Turkey
Chilli contributes for 22% of world spices trade in terms of volume.
Globally China is emerging as major threat for India
Asian countries consumes chillies directly while USA and EU imports mainly for its oleoresin requirement
Overview
![Page 7: 1 Spices Of Fortune All India Spices Conference 7 th Oct 2006, Bangalore A presentation by the IL&FS Commodities Division Chillies.](https://reader031.fdocuments.in/reader031/viewer/2022032606/56649e9d5503460f94b9e92f/html5/thumbnails/7.jpg)
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Agenda Overview
World Spices Export (%)
Ginger4%
Turmeric5%
Tree Spices14%
Seed Spices17%
Chilli22%
Cardamom3%
Vanilla1%
Pepper34%
![Page 8: 1 Spices Of Fortune All India Spices Conference 7 th Oct 2006, Bangalore A presentation by the IL&FS Commodities Division Chillies.](https://reader031.fdocuments.in/reader031/viewer/2022032606/56649e9d5503460f94b9e92f/html5/thumbnails/8.jpg)
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Agenda of the presentation
1. Overview
2. Supply-N-Demand
3. Challenges Ahead
4. Chilli on Exchange
5. Exchange Advantages
6. Price Outlook
![Page 9: 1 Spices Of Fortune All India Spices Conference 7 th Oct 2006, Bangalore A presentation by the IL&FS Commodities Division Chillies.](https://reader031.fdocuments.in/reader031/viewer/2022032606/56649e9d5503460f94b9e92f/html5/thumbnails/9.jpg)
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Acreage and Production
Agenda Supply – N- Demand
Year Area Production
2001-02 8.8 10.6
2002-03 8.5 8.8
2003-04 9.9 11.0
2004-05 E 9.5 10.0
2005-06 E 9.5 10-10.5
Acreage and Production of Chilli
0
2
4
6
8
10
12
2001-02 2002-03 2003-04 2004-05 E 2005-06 E
Area
Production
Stagnant or Declining Acreage and Production
![Page 10: 1 Spices Of Fortune All India Spices Conference 7 th Oct 2006, Bangalore A presentation by the IL&FS Commodities Division Chillies.](https://reader031.fdocuments.in/reader031/viewer/2022032606/56649e9d5503460f94b9e92f/html5/thumbnails/10.jpg)
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Exports
Share of Chilli in Indian spices export is around 20-40% in volumes
India export its chilli mainly to Srilanka, Bangladesh, Korea, Malaysia,Singapore, Japan, UK, Germany, France and USA
Agenda Supply – N- Demand
Nepal3%
Others28%
Usa26%
Sri Lanka24%
Bangladesh13%
Malaysia6%
Share of major items in Indian spices export(Qty)
Chilli42%
Pepper4%
Cumin4%
oils & oleoresin3%
Mint product2%Turmeric
13%
Curry powder2%
Coriander10%
Other seeds11%
Other Spices6%
Ginger3%
![Page 11: 1 Spices Of Fortune All India Spices Conference 7 th Oct 2006, Bangalore A presentation by the IL&FS Commodities Division Chillies.](https://reader031.fdocuments.in/reader031/viewer/2022032606/56649e9d5503460f94b9e92f/html5/thumbnails/11.jpg)
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Exports - India
Agenda Supply – N- Demand
Year Quantity
(tons)
Value (Rs. Lakh)
1999-00 63,591 25471.55
2000-01 62,448 22973.30
2001-02 69,998 25244.02
2002-03 81,022 31514.68
2003-04 86,575 36687.81
2004-05 E 138000 49900.50
2005-06 E 113250 40350.00
Export -Volume and Value
020,00040,00060,00080,000
100,000120,000140,000160,000
0
10000
20000
30000
40000
50000
60000Qnty (tons)
Value (Rs. Lakh)
![Page 12: 1 Spices Of Fortune All India Spices Conference 7 th Oct 2006, Bangalore A presentation by the IL&FS Commodities Division Chillies.](https://reader031.fdocuments.in/reader031/viewer/2022032606/56649e9d5503460f94b9e92f/html5/thumbnails/12.jpg)
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Exports
Agenda Supply – N- Demand
Country wise Percentage share of exports
• India (25%)
• China (24%)
• Spain (17%)
• Mexico (8%)
• Pakistan (7.2%)
• Morocco (7%)
• Turkey (4.5%)
India26%
China26%Pakistan
8%
Morocco 8%
Turkey5%
Spain 18%
Mexico9%
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Balance Sheet 2005-06
Agenda Supply – N- Demand
Sheet2005-06
(Lakh Tonne)
Beginning Stock 1.1
Production 10
Total Supply 11.1
Exports 1.0
Domestic Consumption 10.1
Total Demand10.0
Price Sensitive
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Agenda of the presentation
1. Overview
2. Supply-n-Demand
3. Challenges Ahead
4. Chilli on Exchange
5. Exchange Advantages
6. Price Outlook
![Page 15: 1 Spices Of Fortune All India Spices Conference 7 th Oct 2006, Bangalore A presentation by the IL&FS Commodities Division Chillies.](https://reader031.fdocuments.in/reader031/viewer/2022032606/56649e9d5503460f94b9e92f/html5/thumbnails/15.jpg)
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• Adverse climatic conditions
- Floods, drought, unseasonal rains etc
• Increasing consumption
- Growing population need
• Emerging competitors
- China – Future threat to Indian exports
• Lack of sufficient carry over stocks
- Due to increase in consumption
• Malpractices and Speculation
- On the basis of growing opportunities
• Numerous varieties within same region
Agenda Challenges Ahead
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Agenda of the presentation
1. Overview
2. Supply-n-Demand
3. Challenges Ahead
4. Chilli on Exchange
5. Exchange Advantages
6. Price Outlook
![Page 17: 1 Spices Of Fortune All India Spices Conference 7 th Oct 2006, Bangalore A presentation by the IL&FS Commodities Division Chillies.](https://reader031.fdocuments.in/reader031/viewer/2022032606/56649e9d5503460f94b9e92f/html5/thumbnails/17.jpg)
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• Chilli first got remarkable participation on NCDEX futures exchange
• Sanam best Guntur delivered was the first contract launched but
was withdrawn on operational issues
• LCA 335 variety contract introduced - March expiry & onwards
• Contract trading lot is of 5MT (1 Re change = Rs.50)
• Margin requirement = 15-25% (Case dependent)
• Contract is of 3 months expiry
• Client wise limit is applicable and is 5000 MT (Near month 1000 MT
only)
Agenda Chilli on Exchange
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Agenda Chilli on Exchange
Contract months
Average Volume (MT)
Average Open
Interest
Average Traded Value (Rs. In lacs)
March 3431.42 5756.78 1114.29
April 4838.11 5905.5 1778.9
June 4686.9 6445.1 2313.9
July 4059.7 6245.9 2056.1
Aug 5075.6 8906.9 2599.3
Sep 5430.6 6467.1 2961.4
Oct (4 oct) 9640.8 9951.7 5851.7
Nov (4 Oct) 4372.4 5336.4 2765.9
Dec (4 oct) 4355.7 9016.3 2801.4
NCDEX Chilli – Average Volume, OI,
Value
![Page 19: 1 Spices Of Fortune All India Spices Conference 7 th Oct 2006, Bangalore A presentation by the IL&FS Commodities Division Chillies.](https://reader031.fdocuments.in/reader031/viewer/2022032606/56649e9d5503460f94b9e92f/html5/thumbnails/19.jpg)
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Agenda Chilli on Exchange
ExpiryMon
thQty(MT)
Settlement prices/tonnes
Total Value lakhs
April 10 36020 3.6
June 885 44630 394.97
July 2690 48390 1301.69
Aug 1690 54810 926.28
Sep 2340 517701211.41
Exchange Deliveries & Settlement
![Page 20: 1 Spices Of Fortune All India Spices Conference 7 th Oct 2006, Bangalore A presentation by the IL&FS Commodities Division Chillies.](https://reader031.fdocuments.in/reader031/viewer/2022032606/56649e9d5503460f94b9e92f/html5/thumbnails/20.jpg)
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Agenda of the presentation
1. Overview
2. Supply-n-Demand
3. Challenges Ahead
4. Chilli on Exchange
5. Exchange Advantages
6. Price Outlook
![Page 21: 1 Spices Of Fortune All India Spices Conference 7 th Oct 2006, Bangalore A presentation by the IL&FS Commodities Division Chillies.](https://reader031.fdocuments.in/reader031/viewer/2022032606/56649e9d5503460f94b9e92f/html5/thumbnails/21.jpg)
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Price discovery
India’s branding on world trade
Hedge availability to corporates and individual traders
Arbitrage opportunities – Investment demand
Directional trades or speculation
Jobbing and Punting
Agenda Exchange Advantage
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Agenda of the presentation
1. Overview
2. Supply-n-Demand
3. Challenges Ahead
4. Chilli on Exchange
5. Exchange Advantages
6. Price Outlook
![Page 23: 1 Spices Of Fortune All India Spices Conference 7 th Oct 2006, Bangalore A presentation by the IL&FS Commodities Division Chillies.](https://reader031.fdocuments.in/reader031/viewer/2022032606/56649e9d5503460f94b9e92f/html5/thumbnails/23.jpg)
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Forecasting model
• Fundamental Analysis- SND, Policies, Weather situation etc
• Derivative Analysis- Study of volume, Open Interest and Spreads
• Technical Analysis- Chart based study and forecasting of prices
Agenda Price Outlook
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Agenda Price Outlook
Technical Analysis
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Agenda Price Outlook
Weekly
6600.00
6400.00
6200.00
6000.00
5800.00
5600.00
5400.00
5200.00
5000.00
4800.00
4600.00
4400.00
4200.00
4000.00
3800.00
3600.00
3400.00
3200.00
3000.00
Resistance acting as support
100
61.8
50
38.2
0
40.3°
Chilli LCA 334 NCDEX=5805.00 trend retrace label2
Sep 1, 2006May 1, 2006Jan 1, 2006
•Primary trendline intact with support taken recently at 5600.
•Corroborative evidence of bullishness from the fact that the levels of 5600 - 5800 acted as a strong resistance during early days of May 2006 and has changed from. resistance to support, preventing further decline.
• Second rally started in August from 4600, making a top of 6600. The 50% Fibonacci retracement of this rally reckons to 5600, which exactly coincides, with our support level.
•The bull market is in place and the required correction has also come to an end. Any advance above 6100 levels should be considered as a buying opportunity for medium and long-term investors.
•However intermediate consolidation phase cannot be ignored if it remains below 6100 in the near future. However the probability of prices resuming the uptrend is high.
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Agenda Price Outlook
Trading Strategy
Buy December Contract on Dips of around 6000
Medium to longer term Target – 6700 -7000
Exit or play short trades on breakout below 6000 - Dec Contract
Six Month Range = 5500-7500
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Thank You !
www.investsmartindia.com
IL&FS Investsmart Commodities Limited
K.N.Rahaman
Manager – Commodities Research
022-67160 851-56