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7th June 2016

Monthly Report On

SPICESJuly 2016

1

Monthly Price movement of Spices (% Change)

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10.27

4.56

8.83

5.86

8.97

1.50

8.64

5.49

0.00 2.00 4.00 6.00 8.00 10.00 12.00

Jeera

Turmeric

Cardamom

Coriander

Spot NCDEX

2

Fundamentals

�Turmeric futures (August) is likely to take support near 7700 levels, while the upside may get restricted & can face resistance near 8400 levels. In days to come, not much of an downside is seen as the supply side is tight & demand may flow in before the festivities.

�The current stocks is around 40 lakh bags (70kg each) and most of the current stock i.e. around 25-27 lakh bags likely to be consumed domestically or through exports, which means that around 15 lakh bags of turmeric will be left as ending stocks at the time of new crop, which usually arrives from February, this will be lowest in recent years.

�Further, there is scarcity of premium quality of turmeric in the spot market due to back-to-back years of drought in the country, mainly in turmeric producing regions.

�Exports demand for turmeric is reportedly good, but domestic demand is a bit slow. Arrivals is poor as well in the local markets as stockiest are not getting any returns on their stocks as they had earlier sourced turmeric around these level only.

�Spot turmeric prices at Erode markets are ruling flat though 75 per cent of the arrivals are getting sold. The good quality turmeric was sold for Rs.9,600 a quintal.

�At the Erode Turmeric Merchants Association, the finger turmeric traded at Rs.7,124-9,663 a quintal; the root variety Rs.7,034-8,451.

MARKET MOVEMENT AHEAD

Commodity: TURMERIC (August) Range: 7700-8400

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Fundamentals

�Jeera futures (August) is likely to remain stable in the range of 17000-19000 levels. The gap between the demand & supply, are citing an optimistic outlook.

�Domestic production is around 42 lakh bags (55kg each), down from 55-60 lakh bags last year. Opening stocks is pegged not more than 7-8 lakh bags, hence, the total availability for the season is estimated around 50 lakh bags.

�Demand in the spot market is average as compared to strong buying in previous weeks, which has given an indication that bulls are getting tired even in the spot markets.

�However, overall demand in the current season, which begins from March 1, 2016, appeared better than last year amid ideas of lower production and strong overseas buying.

�According to trade experts, the country has already shipped more than 50,000 tonnes of cumin seed to various destinations.

�Good demand from China coupled with availability of quality produce has pushed jeera (cumin) exports by almost 181 per cent during the first quarter of this fiscal.

�Add to that, geo-political tension restricted jeera supply from Turkey and Syria, thereby making India the single most preferred source of jeera supply in the world market.

�The traders and exporters are hopeful of better exports and expect that exports from India may cross 100,000 tonnes in 2016-17.

�Domestic demand was good as well as stockiest has sourced a major quantity in the anticipation of better appreciation ahead.

Commodity: JEERA (August) Range: 17000-19000

9 Days EMA 18 Days EMA 55 Days EMA

Volume

Open interest

9 Days EMA 18 Days EMA 55 Days EMA

Source: Reuters

Source: Reuters

�Some more profit booking can't be ruled out in spot and futures as current rates are too high to encourage buyers, however long term bullish trend is still intact and cumin seed has potential to test Rs 20,000 level.

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Fundamentals

�Cardamom futures (August) would probably trade with an upside bias in the range of 830-950 levels.

�This season there can crop loss, due to deficient rainfall and high temperature, is likely to be up to 20-25% and plant loss about 5-10% in Idukki district during the season 2016-17. The cardamom crop in the previous year is estimated to be around 20,000 tonnes.

�The withering of leaves and leaf sheaths was observed in a large number of cardamom plants. The long dry spell from December 2015 to the first fortnight of May this year had adversely affected the cardamom plantations in Idukki district as this period is critical for the development of the plant.

�A delayed harvest is likely to help the cardamom market stay firm and rally on export demand. Arrivals are likely to peak only after July as against the normal period of June, due to drought-like conditions in the first quarter of 2016.

�Harvesting will be delayed due to the weather factor; there will be good supply in the market during August-October.

�Spices Board has provided financial assistance to the tune of Rs.7.21 crore to more than 23,000 farmers from the Cardamom Development Fund Trust for cardamom farmers in Kerala reeling under fall in prices, high cost of labour and increased prices of fertilisers and pesticides.

Commodity: CARDAMOM (August) Range: 830-950

Fundamentals

�Coriander (August) is expected to consolidate in the

range of 6800-7260 levels with upside getting capped.

�Coriander is one the commodity is witnessing a bearish tone

during the current season due to better crop and selling by

Gujarat traders/farmers at lower level.

�Coriander availability in the country for the current season is

projected at 1.25 crore bags (45kg each), while consumption

is estimated to be around 90 lakh bags, including exports.

�Coriander upside is limited and may trade around current

range in the coming months. Farmers/stockiest are holding

their produce and reluctant to sell as current rates are not

attractive.

�Coriander traded at Rs 6300/100 Kg in Kota market and

steady tone in coriander prices were also stable in the

markets of Baran, Ramganj, Guna market amid slack

demand.

�Good quality Eagle quality coriander was offered at Rs 6300

while average Badami quality traded at Rs 6000/100kg.

Commodity: Coriander (August) Range: 6800-7260

9 Days EMA 18 Days EMA 55 Days EMA

Source: Reuters

9 Days EMA 18 Days EMA 55 Days EMA

Source: Reuters

4

Source: SMC Research

Forward curve of Turmeric futures

As per closing on 6th July 2016 Source: SMC Research

Forward curve of Jeera futures

As per closing on 6th July 2016

Source: SMC Research

Forward curve of Cardamom futures

As per closing on 6th July 2016

Forward cruve of Coriander futures

Forward curve of Spices

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Source: SMC ResearchAs per closing on 6th July 2016

840.40

900.40895.50

893.20886.80

800.00

810.00

820.00

830.00

840.00

850.00

860.00

870.00

880.00

890.00

900.00

910.00

Jul Aug Sep Oct Nov

7,164.00

7,224.00

7,284.00

7,344.00

7,404.00

7,000.00

7,050.00

7,100.00

7,150.00

7,200.00

7,250.00

7,300.00

7,350.00

7,400.00

7,450.00

Jul Aug Sep Oct Nov

17590.00

17915.00

18160.00

18290.00

18420.00

17000.00

17200.00

17400.00

17600.00

17800.00

18000.00

18200.00

18400.00

18600.00

Jul Aug Sep Oct Nov

8064.00

7946.00

7982.00

8018.00

8054.00

7880.00

7900.00

7920.00

7940.00

7960.00

7980.00

8000.00

8020.00

8040.00

8060.00

8080.00

Jul Aug Sep Oct Nov

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Source: SMC Research

Turmeric futures Seasonal Index(Based on Avg. price from 2009-2015)

Source: SMC Research

Jeera futures Seasonal Index(Based on Avg. price from 2009-2015)

Source: SMC Research

Cardamom futures Seasonal Index(Based on Avg. price from 2009-2015)

Coriander futures Seasonal Index(Based on Avg. price from 2009-2015)

Monthly seasonal price movement of Spices

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Source: SMC Research

0.85

0.90

0.95

1.00

1.05

1.10

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

0.80

0.85

0.90

0.95

1.00

1.05

1.10

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

0.60

0.70

0.80

0.90

1.00

1.10

1.20

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

0.80

0.85

0.90

0.95

1.00

1.05

1.10

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

6

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Extn.: 674