With harvesting in India and Vietnam over, pepper prices have continued to rally, as limited domestic supply coupled with export demand propelled prices higher. Vietnam had exported approximately 30% of their produce. As per market sources, production in India is expected near 48,000 tonne and considering the consistent rise in domestic consumption and a booming population, more than 90% of the production will be consumed locally.
Couple of good economic data had revived expectations of US and European demand, but fresh triggers have been lacking lately.
However, more aggressive participation is expected during Indonesian and Brazilian harvest period. Indonesian crop is expected to reach from June onwards followed with Brazilian crop in the preceding months.
Further, even as broad prospects of pepper looks quite bullish, prices looks to be exhausted after recent runs, with international competitiveness also easing to higher prices, and may prompt an easing of prices.
Jeera’s (cummin seeds) outlook have been largely weak lately, but had supported the prices from further decline. As per the latest projection by trade sources the total production of jeera in the current season is likely to be around 21 lakh bags (1 bag is 60 kg) which is three lakh bags less than the earlier projection. Meanwhile, production in the previous year was reported to be 29 lakh bags. Better crop output is expected in Syria and Turkey and fresh arrivals is expected from May to June period, and could depress domestic prices even further.
Turmeric prices have been rising in the last week on improvement in demand and decline in arrivals. Production is expected on the higher side due to increased acreage of cultivation due to good monsoon. Production in 2011 is expected around 65-70 lakh bags compared with 45 lakh bags in the last year. As per spices board, the exports had declined by 9% compared with last year figures.
Though there has been a recent spurt albeit brief spurt, Cardamom prices have been nose-diving lately as favourable weather conditions had raised the expectation of better as well as early crop. According to trade estimates production in India is slightly higher than 11,000 tonne. As per the estimates of spices board, the production in Guatemala is expected near 20,000 tonne. Total arrivals during the current season from August 1 to May 1,2011, is understood to be 9,351 tonne, which is 3% than last year arrivals.
Chilli futures have been trading with a feeble negative bias pressured by arrivals. Reports of Domestic Market Intelligence Cell (DEMIC) asking farmers to hold the stock and sell towards May-June to take advantage of better pricing have had little effect on prices so far. As per market sources, production in 2010-11 is expected near one million tonne which is 16% lesser than last year production. Attention of farmers to highly rewarding crop like turmeric and cotton and erratic weather condition during the sowing period had considerably reduced the area under cultivation.
Coriander futures have been edging lower recently as arrivals dampened sentiments. Total carry forward stocks have been estimated 25-30 lakh bags. As per trade sources, production is expected to be around of 60-65 lakh bags due to lower acreage of cultivation. Erratic weather condition during the sowing period had decreased the acreage under cultivation. Arrivals usually starts from mid of February and extent till May end, by which prices are expected to firm up and rally higher.
* The author is chief analyst, Geojit Comtrade
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