UPDATE OF INVESTMENT

DOWN LAOD

Pulses Down 4.3%, Chana and Tur each Down by 16%

2nd Advance Estimates of Production of Pulses for 2014-15, Total Pulses Down 4.3%, Chana and Tur each Down by 16%

In 2014-15, the Production of pulses estimated at 18.43 million tonnes is lower by 4.36% from 19.5 million tonnes produced in 2013-14. nnbsp; India is likely to harvest 16% lower chana in 2014-15 from last year on lower planted area (down 16% Y-O-Y). nnbsp; Meanwhile, the decline in tur production due to erratic rainfall conditions during the monsoon season-2014. nnbsp; The 2nd Advance Estimates of production of major crops for 2014-15 and Final Estimates for 2013-14 have been released by the Department of Agriculture namp; Cooperation on 18th February, 2015. nnbsp; As per 2nd Advance Estimates, the production of major pulses during 2014-15 are as under: nnbsp; nnbsp;

RMSeed

Rise in domestic demand for Mustard Oil ahead of the Festive season along with firmness in other Oil complex kept trend Bullish for RMSeed. Prospects of improved productivity had kept short term trend down. But with rates at very low levels, traders expect some recovery in the near term as demand picks up.

 Latest WASDE reports indicate India rapeseed production projected at 6.9 million tons, down 650 thousand tons on lower area

 Demand rose for Mustard Oil amidst falling stocks ahead of the Festival season. Cool weather in growing states keep production prospects good though reports of damage to crop in some areas in Rajasthan from the recent rains supported the market sentiments. 

As per Ministry of Agriculture, Rajasthan area coverage in Rabi season 2014-15 till 24 December was 26.40 lakh ha vs 29.73 lakh ha in 2013-14. The government has set a target of 29 lakh for this year. The fall in area was due to high temperature in Oct and lack of rains. Farmer are reportedly shifting to Barley and Wheat. Crops also faced germination problem due to the high Temperature.

 Haryana area coverage in Rabi 2014-15 till 24 December was reportedly 5.25 lakh ha while it was 5.47 lakh ha in 2013-14 during this time. The reason is again the high temperature during Oct. MP area coverage in Rabi 2014-15 till 24 December was 6.46 lakh ha while it was 7.87 in 2013-14. Due to good rains in Oct and fields being unused, early sowing was possible there. UP area coverage in Rabi 2014-15 till 24 December was 11.42 lakh ha while it was 10.37 lakh ha in 2013-14 during this period. As fields this year were unused in kharif season, so farmers had sown Mustard early in UP. 

Mustard area coverage in All over India is 63.79 lakh Ha during Rabi 2014-15 and 67.00 lakh ha in 2013- 14, area coverage during Rabi 2014 -15 is lower.

As per latest reports from Oil World, the output of mustard in Europe is expected to decline near 15% to 205 lakh tons, the lowest level in past 30 years, while it was 240 lakh tons last year. There is outbreak of insects on the mustard cops in Europe, as per the Oil World report, which may reduce the yield.

Soybean

Soybean traded firm as good domestic demand amidst slight firmness in International markets pulled up prices moderately. Traders expect prices have fallen a lot and some short term recovery not ruled out this week. 

Latest WASDE reports indicate global oilseed production for 2014/15 is projected at a record 532.1 million tons, down slightly from last month. Global soybean production is raised 0.7 million tons to a record 315.1 million. Prospects for the Argentina soybean crop have improved with ample moisture and mild temperatures. As a result, the crop is projected at a record 56.0 million tons, up 1.0 million. Soybean production is also raised for China, Russia, and Ukraine. Soybean production for Brazil is projected at 94.5 million tons, down 1.0 million on lower yields reflecting the impact of limited rainfall in eastern growing areas.  

WASDE Report OILSEEDS: U.S. soybean supplies are increased 10 million bushels to 4,086 million on higher projected imports. Exports for 2014/15 are projected at 1,790 million bushels, up 20 million. Soybean crush is raised 15 million bushels to 1,795 million on increased domestic soybean meal disappearance. Soybean oil production gains from additional crush are mostly offset with a lower extraction rate. With increased production and reduced exports, soybean oil ending stocks are projected at 1.505 billion pounds, up 75 million. Soybean ending stocks are projected at 385 million bushels, down 25 million from last month.

 As per IGC, soybean output may rise by 40 lakh tons this year. It has estimated 31.20 crore tons output globally in 2014-15. Previously, the IGC had estimated 30.8 crore tons in its projection released in November.  IGC has estimated 117 lakh tons of soybeans in India for 2014-15, while it was 120 lakh tons last year. However, some organizations differ the estimate. As per the Soybean Processors Association of India report released in November, soybean output may be around 105 lakh tons, while Central Organization for Oil Industry and Trade (COIT) has predicted 91 lakh tons. The COIT has estimated 13 lakh tons less output in Maharashtra as compared to last year. As per COIT, soybean output was 38 lakh tons in the state last year, while it has been recorded only 25 lakh tons as of now.

China, the largest consumer has reportedly scraped orders of soybeans around 1.20 lakh tons during the US marketing seasons started with September 1, showing signs of weak demand. 

Ref Soy Oil up dates

Improved domestic demand kept supporting the prices at these lower levels as a moderately Bullish trend from these levels is not ruled out for Ref Soy Oil in the coming weeks. Festive season domestic demand is expected to provide support to the rates that have fallen a lot over last few weeks.

 As per Rabi Crops data released by Directorate of Economics and Statistics, Ministry of Agriculture, as on 13th Feb, sowing area under total oilseeds is at 80.92 lakh hectares as compared to 90.20 lakh hectares last year.

As per SOPA, India's soy meal shipments during January, 2015 was 1.04 lac tons as compared to 3.64 lac tons in January, 2014 showing a decrease by 71.48% over the same period of last year.  On a financial year basis, the export during April'2014 to January'2015 is 5.35 lac tons as compared to 24.25 lac tons in the same period of previous year showing a decrease of 77.92%. During current Oil year, (October – September), total exports during October 2014 to January, 2015 are 4.38 Lac tones as against 15.49 Lac tones last year, showing a decrease by 71.69%. Iran, France and Indonesia remained the top 3 buyers of Indian soy meal in January 2015.

Exports of Malaysian palm oil products for January fell 14.6 percent to 1,109,188 tonnes from 1,298,461 tonnes shipped during December - cargo surveyor Societe Generale de Surveillance. India imported 162,900 tons during January v/s 359,767 tons last month.

The recent hike in Import Duty on Crude Edible Oil and refined edible oil would have a medium term Bullish impact on prices—as per sources. Import Duty on Crude Edible Oil hiked from 2.5% to 7.5% and on Refined Edible Oil hiked to 15% from 10%. 

Guargum Updates

Markets seem to recover from these lower levels as traders anticipate prices at very strong support levels and further fall in prices may not be sustainable. Exports have started rising in mandis (aided somewhat by a moderate pick up in Crude Oil prices). 

Lack of strong uptrend for Crude Oil rates has been limiting the export demand. With Guar being used for oil drilling purpose, export demand from US is expected to rise on a rise in Crude Oil prices. Failure of Crude Oil rates rising is affecting Guar prices.

As per reports, Guar gum exports during ongoing fiscal year 2014-15 is expected to decline 25% to 4 lakh to 4.5 lakh tons because there is weak demand for guar gum in the International market due to slump in crude prices . India's guar gum export was near 6 lakh tons during the last year

High stocks, weakness in Crude oil price resulting in low export demand, poor quality arrivals had kept pressurizing prices. Poor quality stocks with farmers too resulted in prices falling. But reports indicate farmers may not be willing to sell at these lower present levels.

 As per Rajasthan Agri Department's 2nd advance projection, during 2014-15, production of guar is expected nearly 27.95 lakh ton in the state while earlier expectation was of 14-15 lakh ton. It is to be noted that during 2013, around 50 lakh hectare area was sown which produced 28.61 lakh tonnes guar.

 As per reports from APEDA, in 2013- 14, India exported more than 6 lakh MT Guargum vs nearly 4 lakh MT in the previous year due to a significant fall in rates. However this also ensured a fall in Export realization which fell by 45% in Re terms.

Turmeric

 Rates short up for Turmeric as falling arrivals of the new crop amidst pick up in Festive season demand from North India and rising exports kept trend firm and supported the prices at these very low levels. Arrival pressure of the new crop had been so far keeping pressure on the prices. But with arrivals slowly coming down, the prices could find some support over next few weeks.

 Short term trend likely to be very volatile but a fall in sowing area and delayed arrival of the new crop due to delayed Monsoon last year keeps overall market sentiments firm. Reports of damage to standing crop in TN, AP and Maharashtra also attributed to the prices getting strong support here. 

 A fall in sowing area in TN and Karnataka due to cyclone in October amidst delayed Monsoon could affect production adversely, as per market sources. Even as area in AP goes up, overall production is expected to come down—lending medium term support to prices

 As harvesting of the new crop picks up in coming weeks., this could prevent prices from shooting up a lot as arrivals rise. However, with demand from North India and Export demand expected to rise in coming weeks, the downtrend can be limited—as per market sources

 The demand is expected to pick up in coming days—lending some support to the prices. Traders anticipate prices are at very low levels and further downtrend may be limited. Last year production was low due to crop damage reports from AP and TN but stock levels from earlier years are high.

As per reports from Spice Board of India, the estimated exports of Turmeric during April-September 2014 was pegged at 43000 MT, up by 10% same period previous year in quantity and 15% in value terms, same period in 2013.  

jeera up dates

Jeera kept hitting Upper Circuit levels as export demand increased in the mandis amidst falling arrivals of the new crop. A firm Dollar vs Re kept uptrend intact. 25-30% fall in sowing area too contributed to the upside movement as traders anticipate medium to long term Bullish trend to continue.

 The rains in growing states of Gujarat and Rajasthan last month is expected to improve the crop productivity to some extent. But overall lower sowing area and expected fall in production would however keep long term Bullish sentiments intact as exports rise in mandis. 

As per latest Govt reports, in Gujarat, normal area is approximately 388,000 ha. Till 5.1.2015, only 2.64 lakh ha have sown as compared to 4.54 lakh ha last year. Sowing area during current year likely to go down in Gujarat and Rajasthan due to lower price as compared to Coriander. Area may shift to Coriander and Fenugreek seed. Cumin output is expected to fall steeply in Gujarat this year. Output was 3.46 lakh tons in the state last year but may fall this year as acreage is slashed by 42%. However, yield is expected to improve after the rainfall that the state received recently. Still, there is less probability of the output to cross 2 lakh tons. 

 Latest report from Spice Board of India indicates pickup in exports during April-Sept 2014 period at 87500 tonnes (up from 70243 in April-Sept 2013) – a rise of 25% in Quantity and 2% in value. Targeted Export for 2014-15 period is 1,00,000 tonnes. With Indian produce being of superior quality, they fetch a premium w.r.t. International market. Adverse reports from International producers would be beneficial for the Indian markets in the long term.

 The exports have already shot up 40% during the 1st half of the quarter. It is expected to remain high in coming months too – which could create a Bullish sentiment in the long term for the commodity. Finally a fall in area as reported amidst adverse weather conditions in growing areas could help keep market sentiments firm in the medium term. 

Mentha Oil UPDATES

Mentha Oil traded sideways as no strong report emerged from the mandis. Markets are however likely to remain firm as sowing progresses. Rains at this time would be beneficial for the crop sowing. So that needs to be tracked. Demand from pharmaceutical Industries and rise in exports could support the prices at the lower levels. High stocks are keeping uptrend limited.  

Reports of current prices being on the lower side along with expected pick up in export and winter season domestic demand in coming weeks could ensure prices find some strong support here. 

Higher production and higher stock levels have been keeping sentiments weak for sometime. Domestic pharmaceutical Industries demand are likely to rise in coming weeks

Banning of Gutka in some states continues having negative impact on Mentha Oil demand. Production this year expected higher at more than 60000 tonnes vs ~50000 tonnes last year

Latest reports from Spice Board indicate that for the period AprilDecember last year, exports for Mint value-added products like Oil, Menthol and its crystals rose 94% in volumes at 17,850 tonnes and 39% in value at Rs 2202 Cr w.r.t. same period the previous year.

Chana UPDATES

Trend continued to remain Bullish or Chana as improved domestic demand amidst lower crop expectations kept trend firm for the counter. Traders are not ruling out some more uptrend in coming days as Festive season demand expected to remain high. 

As per Rabi Crops data released by Directorate of Economics and Statistics, Ministry of Agriculture, area coverage under total Pulses is at 145.92 lakh ha till Feb 13, while the last year's sowing area coverage was 162.21 lakh ha. Chana has been sown over 85.91 lakh ha, which is less 15% as compared to last year's 102.25 lakh ha. 

However, lower sowing reports and expectations of a pick up in demand at the lower levels are likely to support the prices in coming weeks. Extending Dutyfree import for Pulses till March 31 may prevent strong uptrend. But a fall in Rabi sowing area for Rabi Pulses and lower International production prospects could support prices in medium to long term. 

As per USDA, expected pulses production in US is up by 8% to 2,232,630 metric tonne during 2014 from last year. Reports from Canada indicate chickpea production there expected to fall to 0.14 million MT in 2014-15—down from 0.18 million MT in 2013-14due to lower yield. Reports from Australia indicate a 22.5% fall in Pulses production and more than 30% fall in Chick Peas production in 2014- 15 vs that in 2013-14. 

Report from AP Agri Dept indicates Rabi Pulses sowing down 4% from 8.45 lakh ha as on 28.01.2014 to 8.12 lakh ha as on 28.01.2015. As per Maharashtra Agri Dept, sowing till Feb 6 is down 18%. According to Gujarat Agriculture department, rabi chana acreage till Feb 2,2015 is down by 31% compared to the last year's area. The 2nd advance estimate by Rajasthan state agriculture department projected 12.24 lakh tons of chana this year, while it had touched 16.40 lakh tons last year. Chana acreage is lagging by 22% there. As per the data, sowing area has covered 14.9 lakh ha in the state so far, while it was recorded 19.23 lakh ha last year.