Indian Red Spice (Chilli)

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This PPT help to undersatnd indian spice trade to all commodity trading firms.

Transcript of Indian Red Spice (Chilli)

  • CHILLI SUDHANSHU PANDEY DATE:30/04/2008
  • Introduction
    • Chilli belongs to the genus capsicum which is native of tropical America. It was introduced into India by the Portuguese during the 16 th century.chilli is also known as capsicum, Red Chilli and paprika depending upon the species, variety and the manner in which it is used.
  • Crop Cycle
    • Cultivation Pattern: Chillies are herbaceous annuals grown in tropical and sub tropical climates.chillies are grown throughout the year in India.
    • The crop is sown from July onwards and the sowing season extends till September.
    • Chillies need well drained soils and are mostly cultivated as a transplanted crop.
    • Crop duration is 150 to 180 days depending on the variety season , climate, fertility and water management.
    • Crop can be grown in the regions with rainfall between600-1250mm.
    • Arrival start from January and extend till May. The peak arrival period is from February till April.
  • Indian Scenario
    • Chillies are cultivated mainly in the states of Andhra Pradesh,Orissa,Maharashtra,West Bengal,Karnataka,rajasthan and Tamilnadu.Andhra Pradesh is the foremost accounting for 50% of the production in the country.
    • Indias chilli production stood at arround 12lakh tonnes while the global out put was 27.7lakh tonnes.
  • Global Scenario
    • Chilli is the second largest traded spice in the world with a 22% contribution in the world spice trade.
    • India contributes 25%of the Global chilli exports.
    • Others major producers and exporters are China,Spain, Mexico,Pakistan,Morocco and Turkey.
    • Major importers of indian chillies are Srilanka, Bangladesh,U.K.,Germany,France and U.S.A.
  • Major Trading Centers in India Pollachi,Ramanad,Madurai,Trichi, Thani,Dindigul,Virudunagar,Sttur. Tamil Nadu Gharwad,Mysore,Hassan,Banglore, Bellary,Ranibennur,Hubli,Byadgi. Karnataka Nasik,Ahemed Nagar,Sholapur, Aurangabad,Nanded,Amaravathi, Lasalgaon Maharashtra Guntur,warangal,Hyderabad,Gudda-pah,Vijaywada,Rajamundri,Nellore. Andhra Pradesh Trading Centers States
  • State Wise Contribution Of Chilli
  • Acreage and Production Acreage and Production Stagnant or Declining Acreage and Production Note : From 2001-02 to 2005-2006 Area in Lakh Hectares; Production in Lakh Tonnes. Source : Spices Board, Ministry of Commerce & Industry & Ministry of Agriculture, Govt. of India. Year Area Production 2001-02 8.80 10.69 2002-03 8.28 8.96 2003-04 7.74 12.35 2004-05 7.37 11.85 2005-06 6.54 10.14
  • Chilli Major Producers World Wide
  • 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 Export Scenario
  • Chilli- Major Consumers Worldwide
    • Country wise Percentage share of exports
    • India (26%)
    • China (26%)
    • Spain (18%)
    • Mexico (9%)
    • Pakistan (8%)
    • Morocco (8%)
    • Turkey (5%)
  • Rising Difference Between Production & Consumption of Chillis
  • Producers Price Movement of Leading Exporting Nations of Dry Chilli Pepper
  • Chilli- World Exports Share
  • Chilli World Imports Share
  • Statewise Production Share trend of CHillis in India
  • Gantur Monthly (average) price movemant of Chillis in six year period 2002 -03 to 2007-08 (Up to Jan 2008)
  • Gantur: Price trend of chillies form April 2002 to January 2008
  • Area and production of major spices in India, 2000-2006
  • Statewise area and production of chilli in Inida, 2000-2006
  • Futures Contract Specifications Warangal (up to the radius of 50 Kms from the municipal limits) Location Premium/Discount as notified by the Exchange from time to time. Additional delivery centre Guntur (up to the radius of 50 Kms from the municipal limits) Delivery center +/- 2% Quantity variation Guntur Sannam with a premium of Rs. 150 per Quintal Also Deliverable *Tolerance up to 0.5% of the above limits only in the outbound deliveries will be allowed Pods without stalks should not be more than 8%* Acceptable up to 7% with 1:1 discount Damaged and discolored pods - Basis 6% * Loose seeds should not be more than 2% Broken Chillies should not be more than 7%* Foreign matter should not be more than 2% Moisture should not be more than 12.5*% b) Chillies less than 5 cms will be allowed to a maximum of 5% by weight a) Not less than 5 cms Length Colour - Bright Red LCA 334 Quality specification Re. 1 Tick size Rs. per Quintal Quotation/ Base value 5 MT Delivery unit 5 MT Unit of trading Chilli (Paala) traded as LCA 334 ex warehouse Guntur inclusive of all taxes and Market Cess Basis NCDEX Trading System Trading system CHLL334GTR Ticker symbol Chilli Name of commodity Futures Contract Specifications Type of contract
  • Special margin of 5% of the value of the contract will be levied whenever the rise or fall in price exceeds 20% of the 90-day prior settlement price. The margin will be payable by the buyer or the seller depending on whether price rises or falls respectively. The margins shall remain in force so long as the price stays beyond the 20% limit and will be withdrawn as soon as the price is within the 20% band. Special margins Client: Maximum of 500 MT Member: Maximum of 1,500 MT The following limits would be applicable from 28 days prior to expiry date of a contract For near month contracts: For bona fide hedgers, the Exchange will, on a case to case basis, decide the hedge limits. Please refer to Circular No. NCDEX/TRADING-100/2005/219 dated October 20,2005. The above limits will not apply to bona fide hedgers. Client: Maximum of 1,500 MT for all contracts Member: Maximum of 4,500 MT for all contracts or 15% of market open position whichever is higher. Position limits Daily price limit will be 2%. If the price touches 2%, trading will continue with 2% limit for the 15 minutes period from the time 2% limit was reached. Thereafter, price limit would be extended by another (+)/ (-) 2%. No trade would be permitted during the day beyond the price limit of (+)/(-)4% from the previous day's closing price Daily price fluctuation limit As per Annexure A No. of active contracts On the expiry of the contract, all the outstanding position would have to be settled by physical delivery Closing of contract Trading in any contract month will open on the 10th day of the month. If 10th happens to be a non-trading day, contracts would open on the next trading day Opening of contracts Compulsory Delivery Delivery Logic The penalty structure for failure to meet delivery obligations will be as per circular no. NCDEX/TRADING-091/2007/235 dated October 4, 2007. Upon expiry of the contract all outstanding positions will result in delivery. Delivery specification If 20th happens to be a holiday, a Saturday or a Sunday then the due date shall be the immediately preceding trading day (other than a Saturday) of the Exchange 20th day of the delivery month Due date/Expiry date
  • Contract Launch Calendar Dec-08 Jun-08 No Launch May-08 Oct-08 Apr-08 Aug-08 Mar-08 Jun-08 Feb-08 No Launch Jan-08 No Launch Dec-07 Apr-08 Nov-07 Mar-08 Oct-07 Feb-08 Sep-07
  • Validity Details of Chilli Contract in NCDEX 0 0 0 1 1 December 0 0 0 2 2 November 0 0 0 3 3 October 0 1 1 3 4 September 0 2 1 3 5 August 0 3 1 3 6 July 0 3 1 3 6 June Warangal 0 3 1 3 6 May Guntur, Location * 0 3 1 3 6 April 5 MT Delivery Unit 0 0 0 4 4 March 5 MT Trading Unit 0 0 0 4 4 February 0 0 0 0 Total Validity 0 January Chilli
  • Trading System
    • Minimum 2 & Maximum 12 Contracts.
    • Presently running 3 alternet month contracts.
    • Total open intrest 6375 MT (All Months).
    • Total demated sotck 900 MT
    • Total margin 6.22% of contract value.
    • Current price 5122 quintal.
    • Tick size .10 paisa.
    • In 1 rs movement 50rs +/- .
  • Sudhanshu Pandey
    • THANK YOU