JUNE 23 2016
MARKET TREND
CASSIA VERA
The market is showing a slight price increase as the fasting month of Ramadan is half along the way.
Every year in the fasting month, the farmer's productivity becomes low and less product becomes available. We might see this trend until end of July as most workers are going back to their home villages for Eid ul-Fitr and returning to work after 2 weeks.
NUTMEG
Demand for this product is stable in the European zone as we are seeing stable prices at origins also. China has bought aggressive for the past weeks and now slowing down, due to school and summer holidays. Their demand is going stable now also.
MACE Mace Papua - the supply is still very low for this product, but demand keeps constant with increasing tendency. As stated before price have gone up and will keep rising until new crop will come into markets. In the remaining moths until August - September - the planned time of the Second Papua Mace Crop (the smallest crop of the yearly two crops) - we see a constant rise in prices. Mace Siau - low demand for this product has driven the price low. India shows little to zero interest for this Siau origin Mace and prices have corrected themselves accordingly.
CLOVES
As the Cigarette factories are showing low demand for cloves before Eid ul-Fitr we might see a slight decrease in prices. Quality is stable from the farmers and we are seeing constant quantities coming in. Other origins are showing same lower trend in prices for Cloves - so we think we might see a downwards trend until end July.
SESAME
Due to the announcement of Korean Tender for 12,000 Mt of Natural Sesame Seeds, we expect the prices to go up.
Brief Details:
Premium Natural Sesame – Quantity 5,000 Mt Regular Natural Sesame – Quantity 7,000 Mt Last Date of Bid: 27th June Result Declaration: 28th June
Experts strongly feels that this tender might be awarded 100% to India due to ,competitive offers of natural sesame compared to Africa. However, price level of Indian origin Sesame seeds are still holding its positions. The Quantity which is coming to market is very low however on either end there is no significant export demand due to higher prices of Indian sesame seeds compare to world market.
Future market will depend on following reasons: 1) Korean Tender Result 2) Indian Winter Crop Sowing (July/August) - Low/Access/Timing of Rain, Quantity of Sowing 3) China Demand & China new sesame crop Sowing Data.
SESAME
From local survey, we have few data for winter crop sowing area in Gujarat. It seems that farmers might have switched to Pulses & Lentils crop due to higher return, as we have seen growth in its sowing. It’s too early to predict the final sowing area & quantity, as it will be keep changing.
PRODUCT
AVERAGE OF LAST 3 YEAR
20TH JUNE 2015
20TH JUNE 2016
Sesame
13,91,000 Hectares
5,600 Hectares
0 Hectares
NORBIXIN & CARMIN
The norbixin price has a slight trend to increase. It depends on the Peruvian harvest (recently end of July) which seems not to be good, so it can increase even more.
The carmine price is stable at the moment and as of August it can decrease a bit but this also depends on the availability of stocks or not.
SOY
US soybean planting is 96% complete as on 19 June 2016 which is up from 89% during corresponding period last year and also above from 5 year average of 93%. Soy bean flakes price in China has increased 150 RMB/mt.
PALM OIL
Malaysia's so-called B10 programme aims to raise the minimum biocontent of biodiesel to 10 percent for the transport sector, mopping up more palm oil for blending purposes and increasing domestic demand. The world's second largest palm oil producer after Indonesia has also said it would raise the bio-fuel content for the industrial sector to 7 percent. Palm prices had fallen in early trade after the Sun newspaper reported that the B10 programme would be suspended until further notice, a trader said. Benchmark palm oil futures for September delivery on the Bursa Malaysia Derivatives Exchange fell 2.1 percent to 2,400 ringgit ($591) per tonne on Monday. It hit an intraday low of 2,397 ringgit, its weakest level in over five months. Palm oil futures rose on Friday after nine consecutive days of losses. Traded volumes stood at 47,297 lots of 25 tonnes each at the close of trade on Monday, versus the 2015 daily average of 44,600 lots. A stronger ringgit also impacted futures prices. A rising ringgit against the dollar makes palm more expensive for holders of foreign currencies as the vegetable oil is traded in ringgit. The ringgit rose 0.9 percent to hit 4.0620 per dollar around on Monday evening. It earlier hit 4.0640 per dollar, its strongest levels since June 10, as the weekend by-election wins by Malaysia's ruling party boosted ringgit sentiment.
PALM OIL Weak export data also did little to support markets. Cargo surveyor data on Monday showed that exports of palm oil from June 1-20 fell 8-10 percent from the same time period a month ago, as demand from mainly Muslim markets weakened leading up to the Eid festival. Palm oil shipments usually rise during the month leading up to Ramadan, which began on June 6 this year, before tapering off towards Eid. The Muslim holy festival entails day-long fasting followed by communal feasting, incurring higher palm oil demand for cooking purposes. In competing vegetable oils, the Chicago Board of Trade soyoil contract for July fell 1.1 percent, while the September soybean oil contract on the Dalian Commodity Exchange rose 0.9 percent. The offer price for crude palm kernel oil was at 5,373.75 ringgit per tonne <PKO-MYSTH-M1> late in the session, according to price assessments by Thomson Reuters.
GUAR
Sowing of guar has been delayed by two weeks due to late monsoon. Furthermore sowing has not even started in Gujarat and Rajasthan. According to forecast by IMD monsoon will arrive next week in Gujarat as well as Rajasthan
PEPPER
Pepper price at origins remained stable, in dollar terms , it was relatively stable due to weakening of local currency. At this price level, raw material is available on the market, however, farmers are not very hurry to release much stock because this year crop finished and more than two third (2/3) of the total crop size was shipped. In India, local price of black pepper increased almost daily from INR 68,200 per 100 Kg at the beginning of the week to INR 68,900 at the week's close.
According to Vietnamese Customs, pepper quantity exported from Jan to May 2016 is as follows:
Jan: 9,786 tons Feb: 10,299 tons Mar: 24,201 tons Apr: 25,038 tons May: 21,351 tons Total: 90,675 tons
This number is official number and not includes cross border trade with China.
MILK
European prices have been increasing for over a month. Prices continue to be supported by falling milk supply with German volumes at the end of May some 0.2% down on the previous week. After a 7.2% first-quarter rise in production, April to December volumes are forecast to be down 0.4% on last year, instilling a sense of urgency in the market for buyers to secure prices while they are low out.
Total milk supply in 2016 is forecast to be less than last year, and the additional 2m tonnes of milk projected for the EU will have been delivered by now. The supply rally in the Netherlands can be explained by the upcoming phosphate limits, which are forcing farmers to try to secure as many phosphate rights as possible, as EU farmers did with milk volumes in the runup to quotas 30yrs ago. About half the additional milk in the EU is being absorbed within the single market, by its 500m consumers. SMP intervention will only play a role until mid-2016, after which stocks will be emptied.
Oceania SMP prices have also increased with traders speculating that the end of European fixed price intervention has finally allowed them to gain ground. A 4% rise in first-quarter NZ SMP exports has boosted prices by keeping inventories manageable. The forecast for China is for 2016 milk production to increase 1.2%, partly an effect of increased cattle imports from Oceania since 2014.
PIMENTO The Mexican pimento harvest will be completed in November and they mexican suppliers are already quoting for new crop at same levels as last year. Local traders had built up stock , therefore many traders are sitting on large stock. It is apparent that weak demand has been lasting quite long and that speculators are trying to liquidate their stock by lowering their price tag.
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The price has been started to increase slowly. We think it will keep increase slowly in following month as its price has really already touched the bottom line
GARLIC
New crop fresh garlic was available after the mid of May. From that time till now the market of dehydrated garlic product has no big change. It seems that price will not vary a lot in the near future.
The recent market fluctuates in such a way: once the market price goes up buyer will not accept it, which makes demand smaller and then price decreases a lot. Because the manufacturer needs to get cash back from business. Cost is very high. Not all of them can afford great amount of circulating fund. Consequently, once price decreases buyer begins to buy, which will push price increases a little. But whatever decrease or increase it is not much! It only varies from USD100/MT to USD150/MT.
Now cost is very high. No manufacturer would like to store large quantity of materials as usual because of tight cash flow pressure. Most of manufacturers make production schedule based on contract. So the production output is not so great as before. That is to say the 2016 crop dehydrated garlic product will be less. Speaking of the market tendency after the end of August it is hard to say now. Usually all the fresh garlic will be stored into refrigerator warehouse from the end of August or the beginning of Sept, which will affect the dehydrated garlic market. However, please pay attention to that price will not fall down a lot in the near future.
CHILLY
1. The prices have gone down a bit. 2. there are approx only 35.000 bags of IPM chillies are left of which there are various grades like 25.000 SHU to 100.000 SHU. 3. the new crop will only start in next April and till that time stocks is very limited. 4. The stock of big players like ITC, Synthite and Olam also has limited stocks and hence they might buy. 5. With onset of new regulation of EU for chillies , most customers will prefer Pesticide guaranteed material and hence price will start rising.
Apart from this the conventional chillies market will go down as the cold stored material is high in amount. Also the new crop for conventional from MP and Gujarat will start by mid October. MP and Gujarat does not produce IPM goods.
Due to this all the European Customers will go for IPM and there will be a shortage and all non EU customers will buy conventional so surplus material of conventional kept for EU will also come in market and hence price will go down for that.