NCDEX Chana Feb. futures traded positive yesterday and closed 0.50% higher on good demand from the stockists and traders on at relatively lower prices and expected lower output from the new crop.
As per the Govt data, Chana has been sown over 85.91 lakh hectares, which is 16 % less as on Feb 13, 2015 as compared to last year’s 102.25 lakh hac. Inadequate soil moisture levels seem to have affected the yield in the major chana producing states of Karnataka, Andhra Pradesh, Rajasthan and Maharashtra.
Chana Outlook : Chana futures expected to trade mixed to higher in the coming days due to low supplies as new crop likely to hit the local market in less than a month’s time. Overall sentiments look mixed for Chana amid expected lower output and duty-free imports allowed till Mar 2015.
Sugar Mar. futures closed positive yesterday and closed 1.16% higher largely due to fresh buying support on hopes that the Indian government would provide subsidy for raw sugar exports. There are huge stocks with the traders following persistent supply from the sugar mills against the regular demand.
Sugar production has reached 16.71 million tonnes as on Feb 15 for the 2014-15 season, as against 14.53 million tonnes in the year-ago, a rise of 15%.
India imported 57.1 thousand tons of sugar for the week ending 08th Feb, 2015 compared to 10.6 thousand tons in the previous week. While the sugar exports made by the country declined 12% from 35 thousand tons to 30.8 thousand tons for the same duration. ISMA projected the annual domestic demand of sugar at 26 million tonnes.
Food Ministry approves proposal to increase export subsidy on raw sugar to Rs 4,000/tonne but to execute, the proposal has to be approved by the Union Cabinet. However, the Cabinet Committee on Economic Affairs (CCEA) approved a proposal to allow states to fix the retail price of sugar sold through the Public Distribution System (PDS).
Sugar Outlook : Sugar futures may trade on a mixed to positive note on anticipation of announcing the export subsidy by the government but the ample supplies may pressurize the prices.
NCDEX Soybean Feb futures ended negative yesterday after two session of uptrend and closed 0.50% down. It is mainly due to subdued export demand of oil meal.
India’s oilmeal exports is expected to drop about 40 per cent in 2014/15 due to lower demand for soymeal as key buyers like Iran and Japan switch to cheaper supplies from South America.
In January 2015, Soymeal exports fell by more than 71 per cent to 104,426 tonnes against 364,443 tonnes in the same month a year ago.
Soybean Outlook : Soybean futures may trade on a mixed to positive note due to good buying support at lower prices but sluggish demand for oil meal might weigh on prices.
Mustard seed futures traded on a negative note yesterday and closed 1.02% down reversing the uptrend from last three sessions mainly on profit booking. There is expected drop in production of new season crop. India rapeseed production is projected at 6.9 million tons, down 6.5 lakh tons on lower area.
The acreage in the country so far is down by about 3.2% at about 63.8 lakh hectares (lh). The acreage in Rajasthan has dropped by 12.6% at 26.4 lh.
Mustard Outlook : Mustard seed may trade on a mixed note. Good buying interest and expectation of lower production may support the price.
Ref soy oil Feb futures traded on negative note yesterday and closed 0.97% down on ample supplies in the domestic market. Soybean oil Import has shown 131% growth in Jan 15 as compared to Dec 14.
In the month of Jan 15, there is an increase of 28 per cent import of Crude soybean oil to 224,430 tonnes as compared to last year’s 174,236 tonnes. It is mainly due to high prices of soybean and lesser realization for oil and soybean meal in export market, resulted in lower crushing and availability of domestic oil coupled with anticipated increase in import duty by the GOI.
According to latest report of US Department of Agriculture (USDA), the domestic consumption of soybean oil in India is likely to be at around 3.45 million tons against 3.30 million tons last year.
Recently, the customs duty on crude oil has been increased to 7.5 per cent from 2.5 per cent earlier, while the duty on refined edible oil has been raised to 15 per cent from 10 per cent, as per the notification issued by the Central Board of Excise and Customs.
MCX CPO Jan. futures traded on negative note yesterday and closed 1.20% down due to profit booking by the market participants. India’s palm oil imports in January dropped more than a fifth from a month earlier to 658,670 tonnes as refiners increased overseas purchases of sunflower and soyoil, as per SEA data.
Overall, demand from the European Union (EU) and US rose while India and China continued to decrease.
Palm oils make up 61% of the country’s total vegetable oil imports in January as per the SEA data released. India meets 60% of its annual vegetable oil demand of 17-18 million tonnes via imports.
Indonesian crude palm oil output is estimated to have fallen around 5 percent in January from December, hit by wet weather in key growing regions. Earlier, Indonesia’s government has proposed a three-fold increase in its biodiesel subsidies to 5,000 rupiah (40 U.S. cents) per litre from 1,500 rupiah, aimed at protecting the top producer’s fledgling biofuel industry against lower crude prices.
According to Trade Ministry, Indonesia the crude palm oil export tax for March is kept at zero, unchanged from February. Cargo surveyor, Intertek Testing Services (ITS) reported that exports of Malaysia’s palm oil products during February 1 to 10 decreased 16 per cent to 298,910 tonnes compared with 355,846 tonnes during January 1 to 10.
Thailand plans to import around 50,000 tonnes of crude palm oil from February due to a domestic shortage caused by drought according to the trade sources.
CPO Outlook : Soy Oil futures and CPO prices may trade on a mixed to positive note as prices may follow the international price trend.
Jeera Mar. futures hit the upper circuit on second successive trading session and closed 5.20% higher yesterday on good export demand. The fundamentals on Jeera is positive due to less production estimate amid less sowing area in the Gujarat, the main Jeera producing state.
Jeera Outlook : Jeera futures may trade on mixed to positive note, as there is good demand from exporters as well as retailers and stockists at market prices on anticipation of lesser arrivals in coming month on anticipation of lower production. However, arrival pressure may cap the price rise.
Turmeric Apr. futures traded on positive note yesterday hitting the upper circuit and closed 5.26% higher on good demand from the north India as supplies for the good quality turmeric reduces. There is news on crop damage from the Karnataka and Andhra Pradesh. There is good demand from retailers and traders at lower prices.
There are concerns over crop loss due to cyclone ‘Hudhud’ that hit Andhra Pradesh in Oct 2014. Demand for the commodity has been increasing rapidly from North India and from the medicinal and cosmetic industry.
Turmeric Outlook : Turmeric futures may trade on a mixed to positive note on good local demand for the good quality turmeric and profit booking on higher levels may restrict the gains.
Cotton complex traded on positive note yesterday on good demand from the millers and stockists. MCX Cotton Feb Futures closed 1.34% higher and NCDEX Kapas April’15 closed 1.47% lower. Cotton price edged higher expectation of fresh export demand from Vietnam and Indonesia.
The state-run Cotton Corp of India (CCI) started to sell cotton through electronic auctions into a weak market as it struggles to store purchases of over 60 lakh bales procured in the current crop season. Two successive years of the bumper harvest have contributed to the fall in the domestic prices below MSP.
India exported 1.37 lakh bales of cotton last week (02-08 Feb 2015), which was 1.23 lakh bales compared to previous week (26 Jan-01 Feb 2015), according to the data compiled by IBIS. Imports on the other hand stood 0.19 lakh bales, which was 0.05 lakh bales previous week.
Kapas Outlook : Cotton futures may trade mixed to positive on reduced production estimate by around 50 lakh bales and domestic market and CCI has now started to sell procured cotton in the domestic market. Selling on higher levels may be negative for the prices.