Cotton Sugar Soyben RM Seed Castor seed Turmeric Jeera NCoMM NCML COMMODITY MARKET MONITOR ANSWERS & LUCKY WINNER OF PREVIOUS WEEK S QUIZ NCoMM NCML COMMODITY MARKET MONITOR WEEKLY ONLINE QUIZ HOME Click on the link above to participate Participate in our weekly quiz and get a chance to win Amazon gift OUTLOOK in next report and rewarded. coupons. Winners will be announced Cotton Sugar Soybean RM Seed Sugar Tur Wheat Maize Castor seed Chana OTHER DATA Sowing progress Advance estimates Turmeric Paddy/Rice Guarseed Kharif and rabi MSP Jeera
Jan-14 Jul-14 Jan-15 Jun-15 Dec-15 Jun-16 Nov- 16 May- 17 Nov-17 Apr-18 SUGAR Kohlapur Muzzafar -nagar Delhi FUNDAMENTAL SUMMARY Record domestic sugar production to touch 32 mn tonnes against only 2.3 mn tonnes last year Subsidy of Rs 5.5 per qtl to cane farmers for the produce they sell to sugar mills by the government Proposal for imposition of 5% sugar cess Ongoing wedding and summer season demand MIEQ (Minimum Indicative Export Quota) of 2 mn tonnes mandated by government Export disparity due to low global sugar prices Scrapping off the 2% export duty on sugar by the government Doubling of import duty from 5% to 1% 7-5-218 3-5-218 %Change 273.35 2713.75 -.38 272 2716.55 -.54 2757.85 2792-1.22 The Indian sugar industry is currently going through a crisis due to high domestic production coupled with fall in sugar prices internationally. India s sugar production amounted to a record 31.3 mn tonnes till April 3. With 13 sugar mills still operating, majorly in Uttar Pradesh, the sugar production during the current season might end up touching 32 mn tonnes in the current season (Oct-Sep) as per ISMA. This is a substantial increase from last year s 2.3 mn tonnes produced. Till April 3, Sugar mills in Maharashtra produced 1.65 mn tonnes and barring 15 mills all others in the state had ended their operations. UP mills produced 11.2 mn tonnes of sugar till and 8 out of 119 sugar mills are continuing their crushing. Some of these mills are closing fast, whereas few are expected to continue crushing till the second week of May 218. In Karnataka, all the sugar mills have stopped their operations and they produced 3.63 mn tonnes during the current season. On May 2, the government today approved a subsidy of Rs 5.5 per quintal to cane farmers for the produce they sell to sugar mills to help millers clear cane arrears that have surged to about Rs 2, crore due to sharp fall in ex-mill sugar prices. ISMA has said sugar prices have been under severe pressure in the last 4-5 months. Compared to the cost of production, the ex-mill sugar prices are around Rs 8/kg lower & sugar mills are incurring substantial losses. India had abolished a surcharge on sugar, or cess, after the introduction of the nationwide GST last year, but the central government has proposed reintroducing 5% sugar cess in view of current glut. The government had last month mandated a MIEQ (Minimum Indicative Export Quota) of 2 mn tonnes sugar exports to move surplus stocks out of country but India is not able to export sugar due to export disparity as a result of depressed world sugar prices on global sugar surplus. The government had earlier doubled import duty on sugar to 1%, scrapped the 2% export duty on sugar and placed stockholding limits on sugar mills but could not counteract the trend of falling prices. The world s sugar traders are experiencing the biggest ever global surplus. The Green Pool Commodity Specialists expect the glut to reach 18.4 mn tonnes this season. Excess supplies forecast for next season will also be bigger than previously expected, and that could drive further declines in the price of sugar, which is trading near the lowest since 215. Sugar mills in Brazil s Centre/South crushed 22.214 mn tonnes of cane in the first half of April, up from 17.681 mn in the same period a year ago. Thailand s sugar production seen at 14.6 million tons this season, 1, tonnes higher than a previous forecast. 3,9 Sugar - M-grade : Muzaffarnagar 3,6 3,3 3, 2,7 2,4 2,1 Indian Express
Jun-15 Oct-15 Feb-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 Apr-18 TUR TUR FUNDAMENTAL SUMMARY Huge pile up of previous year s stocks Restricted private buying Expected notification on import restriction Export disparity Lower 217-18 production estimate Government extending procurement in Maharashtra Fall in tur acreage expected in 218-19 7-5-218 3-4-218 %Change Yavatmal 3975 3475 14.39 Amravati 385 3756 2.5 Akola 391 3725 4.97 The notification issued by the Directorate General of Foreign Trade (DGFT) on May 4 218 specifically mentions that the ban imposed on urad and moong dal in August 217 has been extended. The Government had fixed a cap on imports of pulses like tur, urad and moong up to 3 lakh tonnes in Aug 217. In the recent notification, the Government has not only continued the 3 lakh tonne cap for pulses, but also included the processed dals imported by the traders. Earlier, processed dals were not included in the allowed quota. Although no notification has been received for tur so far, we are expecting a similar extension for tur too. As per the second advance estimates released by the government, tur production 217-18 is pegged at 4.2 mn tonnes, down 17.45% from 4.87 mn tonnes in 216-18. The area under tur this year declined to 43.5 lakh hectares, from 53.2 lakh hectares last year. Despite lower production, Tur prices continue to be in a glut due to higher supplies and large previous year s stocks. Demand for Tur and Tur dal too has not been not up to the mark, however the wedding season may lift the demand a bit. The Centre has granted extension to the Maharashtra government for procurement of tur (arhar) under at MSP up to May 15 instead of the earlier deadline of 18 April. Private buying remains restricted as govt. agencies remained active to procure at MSP. Until April 18, the government procured 25.45 lakh quintals from the key producing regions of Maharashtra and met nearly 65% of its target which has been set at 44.67 lakh quintals from February 1. Tur procurement was stopped in some parts of the state because of lack of storage space due to previous year s stock. Over 95% of 67.34 lakh quintals of tur procured last year by Maharashtra government is yet to be processed to make dal out of it, which may lead to losses to the tune of Rs 1, crore. The average trading price of tur in most of the markets in the state was around Rs 4,25/qtl, below the MSP of Rs 5,4/qtl. Record purchases of tur by the government agencies in Karnataka, whichended last month too did not reverse the bearish price trend. In Gulbarga market Tur is being traded at Rs 375 to Rs 435 per qtl. Quotes for Myanmar pulses have decreased further diminishing export possibility in India in the first half of the year despite removal of export ban on pulses by India. Myanmar is offering Tur at $3 per tonne, basis Indian port, down by almost $3 per tonne in last two weeks. Lower realization from the crop this year is likely to encourage farmers to shift tur area to other lucrative crops like groundnut, chilli, turmeric & others. Tur area may decline by 15 to 2% in India in 218-19. Lemon tur FAQ-Myanmar origin : Mumbai 145 15 65 The harvested tur has a shelf life of 6 months to 1 year without being processed. 95% of tur procured before June 217 by Maharashtra government is lying unprocessed. The state had procured tur at Rs 5,5 /qtl, but today the market value of tur is not more than Rs 3,2/qtl. The total cost of the procurement was Rs 3,341.32 crore. 25
Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jul-17 Oct-17 Jan-18 Apr-18 WHEAT FUNDAMENTAL SUMMARY Slow procurement activities Higher production estimate for 218-19 Lower wheat exports Lower world wheat production Delhi Indore Kanpur 7-5-218 3-4-218 %Change 1756.25 173.8 1.47 1766.95 1754.7.7 1642.5 1647.5 -.3 Recent unseasonal rains and hailstorm in many parts of north India may slow down the wheat procurement as it has wet the grains lying on the ground. The farmers will now have to wait to dry the crop before selling it to the government. Moreover, standing wheat crop, which was late sown is reported damaged in many parts of Uttar Pradesh. According the latest report of Food Corporation of India (FCI), as on 4th May 218, wheat procurement has reached 287.78 lakh metric tonnes. Of the total quantity procured, around 119.37 lakh tonnes have been procured from Punjab, 8.63 lakh tonnes from Haryana, 21.83 lakh tonnes from Uttar Pradesh, 52.71 lakh tonnes have been procured from Madhya Pradesh, 1.39 in Rajasthan,.41 lakh tonnes from Uttarakhand,.14 lakh tonnes from Chandigarh and.3 lakh tonnes from Gujarat. In Rabi marketing season 218-19 government has set procurement target of 32 million MT. Buoyed by the forecast of a normal monsoon this year, the agriculture ministry has targeted 1 million tonnes of wheat production in 218-19. In 217-18 production of wheat is estimated at 97.11 million tonnes, according to the second advance estimates released by the ministry in February. However, most trade sources are currently estimating the crop in the range of 91-94 million MT for 217-18. According to APEDA, India wheat export is reported at 2.29 lakh MT for 217-18 which is 12.59 percent lower than the export of 2.62 lakh MT for 216-17. Export demand of Indian wheat is lower due to price disparity with other exporting countries. According to latest monthly report of IGC, world wheat production is projected at 739 million MT for 218-19 against 758 million tonnes forecast for 217-18, while the ending stocks are projected lower at 257 million tonnes against 263 million tonnes last year. Wheat: Standard mill quality : Delhi 25 23 21 19 17 15
Jul-17 Sep-17 Oct-17 Dec-17 Jan-18 Mar-18 May-18 CHANA TUR FUNDAMENTAL SUMMARY Demand on ban on future trading in chana Import duty Export incentive on chana Ongoing Chana procurement activity Higher arrivals in the mandi Higher production estimate Akola 7-5-218 3-4-218 %Change 345 3465.65 -.45 Bikaner 355 3463.2 2.51 Amravati 325 32 1.56 The All-India Dal Mills Association has demanded a ban on futures trading in chana due to falling prices in the domestic market. According to them, big cartel is running the market causing impractical price movement which is hampering the interests of small businessmen and farmers. Moreover, All-India Dal Mills Association are also demanding immediate ban on imports of chana to support the domestic prices. At present, the import duty on chana is 6 per cent. As of 7th May, imported Australian chana is being traded at Rs 35 per quintal in Mumbai market and Rs 3525 per quintal at Mundra port. According to the market participants, export incentive on chana should be increased to 1-15 percent and 25 lakh MT of chana should be exported to support the falling prices of Chana. At present the export incentive to chana is 7 per cent under the Merchandise Export from India Scheme (MEIS) for a period of three months till June 2, 218. To ease the process of export of chana, DGFT has removed mandatory roasted chana/ chana dal export in consumer pack of one kg. Now it can be shipped in bulk. According to the latest Nafed report, as on 7 th may Nafed had procured 6.6 Lakh MT of chana. Of the total quantity procured, around.5 lakh tonnes have been procured from Telangana, 1.27 lakh tonnes from Karnataka,.77 lakh tonnes from Andhra Pradesh,.48 lakh tonnes have been procured from Maharashtra, 1.42 in Rajasthan and 2.61 lakh tonnes from Madhya Pradesh and.11 in Gujarat. According to agmark, all India chana arrivals in the first week of May is 1.68 lakh MT which is higher than the last year arrival s of.84 lakh MT in the same time period last year. According to the second advance estimates released by the government, India s chana production estimate for 217-18 is 11.1 million MT which is 18.97 per cent higher than 216-17 fourth advance production estimates of 9.33 million MT. Higher production estimate is due to higher chana sowing acreage and favourable weather condition in major producing states. Gram - Rajasthani desi : Bikaner : 6 546 492 438 384 33
Apr-16 Jun-16 Sep-16 Dec-16 Mar-17 May-17 Aug-17 Nov-17 Feb-18 May-18 MAIZE FUNDAMENTAL SUMMARY As per the second advance estimates released by the government, the kharif maize output for 217-18 has been projected at 19.51 million tonnes, higher than 19.24 million tonnes in the previous 216-17 season. Rabi production was at 7.63 million tonnes. Higher Production estimates Higher arrivals Higher rabi area estimates The total kharif and rabi production is pegged at 27.14 milllion tonnes higher by 5% compared to 25.9 million tonnes last year. Arrivals for the month of April 218 was 331821.84 MT an increase of about 4% compared to the same period last year at 318612 MT. Lower world corn stocks for the previous year (217-18) Expected Imports coming in Arrivals for the summer crop in Bihar are in full swing now with arrivals ranging at around 8-1. Due to this the prices in that region have also nosedived by around 1% in this region. According to IGC the forecast for world corn prod in 218/19 was raised to 1.54 Bn Tonnes citing improved prospects in china & EU and the consumption was also raised to 1.99 Bn Tonnes from 1.94 tonnes in the previous forecast in March. Erode Gulab bagh Nizamabad 7-5-218 3-4-218 %Change 1375 1365.45.7 1166.9 123.9-3.7 124 126-1.59 IGC also cut the closing stocks at the end of 218-19 reflecting the idea of buoyant consumption which may help the prices in the future. According to UK Agro consult, Ukraine s export of maize for the 217/18 Marketing year (July-June) stands at 14.3 Million tonnes till the end of April. As of 29 th April, According to US progress Planting reports 17% Corn has been planted down by 15% compared to last year and down by 1% compared to the 5 year average. Maize-Feed/Industrial Grade : Gulab Bagh 17 155 14 125 11
Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 RICE/PADDY Hanumangarh (1121 Pusa) Muzaffarnagar (common) Aligarh (1121) RICE/PADDY FUNDAMENTAL SUMMARY Government procurement of Rice Higher stocks position at central pool Lower procurement in Chhattisgarh, Bihar, Madhya Pradesh and West Bengal Record rice production in 217-18 Iran to import rice till 22 nd July 7-5-218 27-4-218 %Change 33 33. 27 2665 1.31 3 32-6.25 According to the latest available data as on 26 th April, Rice procurement by FCI and its state agencies stood at 321.62 lakh tonnes as compared to 336.9 lakh tonnes last year same period. The target procurement in 217-18 (Oct-Sept) is 43 lakh tonnes. Punjab showed an increase of 118.33 lakh tonnes over last year 11.52 lakh tonnes, Haryana Rice procurement was 39.67 lakh tonnes compared to 35.7 lakh tonnes and in Andhra Pradesh procurement stood at 3.15 lakh tonnes as against 29.59 lakh tonnes last year. Chhattisgarh procured around 32.7 lakh tonnes. Madhya Pradesh and Odisha procurement has reached 1.96 and 25.16 lakh tonnes respectively. Procurement in West Bengal and other rice growing states is still underway and reached to.35 lakh tons. Rice procurement declined in states like Chhattisgarh, Bihar, Madhya Pradesh, Maharashtra, Odisha and West Bengal over last year. Rice stock at the central pool as on 1st April 218 stood at 248.73 lakh tonnes as against 23.81 lakh tonnes last year same period. As per the Second Advance Estimates for 217-18 the total Rice production for 217-18 estimated to increase at 111.1 million tonnes as against 19.7 million tonnes. Kharif Rice output estimated at 96.48 million tonnes as against 96.3 million tonnes in 216-17. Rabi season Rice production for 217-18 is estimated at 14.53 million tonnes as compared to 13.4 million tonnes in 216-17. The IGC forecasted Rice production in 218-19 at 493 million tonnes, up from 492 million tonnes in March and up from 486 million tonnes in 217-18. Rice consumption also is forecast higher, at 493 million tonnes, which compares with 491 million tonnes in March and 487 million tonnes in 217-18. As per trade sources, total rice export in the month of March was 13.3 lakh tonnes, in which basmati rice contribution is 33.5 per cent of total with quantity of 4.3 lakh tonnes and non-basmati contribution was 66.94 per cent with quantity of 8.72 lakh tonnes. Iran would continue to import Rice until 22 nd July and there will be no changes in the customs tariffs on the imports of the product due to current water crisis in the country. Iran normally allows imports of rice in late September when the local farmers have concluded cultivating the cereal grain and again limits the imports in late July. Paddy - 1121 pusa : Hanumangarh 36 32 28 24 2 16
May-16 Jul-16 Oct-16 Dec-16 Mar-17 Jun-17 Aug-17 Nov-17 Jan-18 Apr-18 GUAR SEED Subdued domestic and export demand Availability of sufficient stocks in domestic markets Normal monsoon forecast by IMD Higher production of Guar in Rajasthan Buying at lower levels Higher exports during 217-18 Bikaner Jodhpur Barmer GUAR FUNDAMENTAL SUMMARY 7-5-218 27-4-218 %Change 3775 38 -.65 385 387 -.51 374 39-4.1 trend continued both at spot and futures market tracking subdued domestic and export demand. According to Sri Ganganagar based traders, Guar seed stock in the country is abundant and with normal monsoon forecast there is more downside expected in the commodity. As per IMD 218 Monsoon forecast, monsoon rains are expected to be normal this year and are expected to be 97 per cent of the longperiod average (LPA) with model error of +/- of 5 per cent. Now stockists are mostly on the side-line and they are not in position to create any buying positions as they have procured heavily at higher level and incurring substantial losses on it. As per Jodhpur based traders, there is still around 1 crore bags stock in the country and most of them are likely to get carry forward next season starting from October 218. But the ending stock this season is expected to drop to multi-year low, however prices are unlikely to get major support as Rajasthan government has set higher production target of Guar for Kharif 217-18 season. According to market sources, Rajasthan is expected to produce 17.5 lakh tonnes Guar seed during the Kharif crop season 218-19 (Jul-Jun), up 4 per cent from 12.45 lakh tonnes a year ago due to forecast of normal monsoon. During 217-18, the state had produced 12.5 lakh tonne of Guar seed. As per latest update by DGCIS, India has exported around 494126 metric tonnes of guar gum in April-March (217-18) compared to 419952 metric tonnes in April-March (216-17). In terms of value, exports have increased by around 34.2 per cent. As per trade sources, India has exported around 29473 tonnes of guar gum in the month of March at an average FOB of $1893.32 per tonne. Exports in the month of March are marginally high by around.27 per cent compared to February. Furthermore, India has exported around 29394 tonnes of guar gum in February at an average FOB of $1868.71 per tonne. As per the 2 nd advance production estimates, Guar seed in Rajasthan is estimated at 15.44 lakh tonnes for 217-18 compared to 14.4 lakh tonnes in 216-17. 4,7 Guarseed : Bikaner 4,4 4,1 3,8 3,5 3,2 2,9
THE WEEK THAT WAS PRICE TRACKER FCI rice stock hits 5-year high at 25 million tonnes More restriction on urad, moong imports Dust storm devastates vegetable crops, harvested wheat Despite less rains, maximum kharif crop production last year: Devendra Fadnavis Seed shortage may not impact soyabean area Rapeseed powers oilmeal export earnings in 217-18; growth up 48% Sugar output hits a high at 31mt; ISMA says may rise further Subsidy of Rs 5.5 per quintal for sugarcane farmers approved To purchase the India Commodity Year Book 218, contact us at research@ncml.com Commodity Latest Fortnight ago MINIMUM SUPPORT PRICE (Rs/Qtl.) Commodity 216-17 217-18 KHARIF Month ago Year ago 7-May-18 23-Apr-18 9-Apr-18 8-May-17 Wheat 1766.95 1723.45 1687.5 159.5 Chana 355 3578.95 3736.9 53 Rice/Paddy 33 33 34 31 Guar 3775 415 44 37 Sugar 272 273.35 295 392.15 Tur 391 4 42 38 Maize 124 1255 124 1524 Paddy Common 147 155 paddy grade A 151 159 Jowar Hybrid 1625 17 Jowar Maldandi 165 1725 Bajra 133 1425 Ragi 1725 19 Maize 1365 1425 Tur 55 545* Moong 5225 5575* Urad 5 54* Groundnut 422 445* Sunflower seed 395 41 # Soyabean black 2775 35 Sesamum 5 53 # Nigerseed 3825 45 # Link for commodity-wise and market-wise prices and arrivals: http://agmarknet.gov.in/priceandarriv als/commoditywisedailyreport2.aspx Official Production Estimates Second advance estimates 217-18 & previous years estimates : Second Advance Estimates 217-18 Cotton(Medium Staple) 368 42 Cotton(Long Staple) 416 432 RABI Commodity 216-17 217-18 Wheat 1625 1735 Barley 1325 141 Gram 4* 44 Masur (Lentil) 395* 425 Rapeseed/Mustard 37* 4 Safflower 37* 41 Wheat 1625 1735 *includes bonus of Rs 2 per quintal # includes bonus of Rs 1 per quintal
Advisory Team Basant Vaid Head: TCIG basant.v@ncml.com Sreedhar Nandam Vice President: SCM sreedhar.n@ncml.com Research Team Suresh Solanki Assistant Manager: TCIG suresh.s@ncml.com Kamna Malhotra Economist: TCIG kamna.m@ncml.com Akash Jaiswal Research Analyst: TCIG akash.j@ncml.com Ansh Aggarwal Senior Officer: Trade Support ansh.a@ncml.com For any research queries, contact us at research@ncml.com Disclaimer: This consultancy report has been prepared by National Collateral Management Services Limited (NCML) for the sole benefit of the addressee. Neither the report nor any part of the report shall be provided to third parties without the written consent of NCML. Any third party in possession of the report may not rely on its conclusions without the written consent of NCML. NCML has exercised reasonable care and skill in preparation of this consultancy report but has not independently verified information provided by others. No other warranty, express or implied, is made in relation to this report. Therefore, NCML assumes no liability for any loss resulting from errors, omissions or misrepresentations made by others. Any recommendations, opinions and findings stated in this report are based on circumstances and facts as they existed at the time of preparation of this report. Any change in circumstances and facts on which this report is based may adversely affect any recommendations, opinions or findings contained in this report. National Collateral Management Services Limited (NCML) 217