Daily Commodity Roundup as on -...

Daily Commodity Roundup as on Monday, November 06, 2017

Date : Monday, November 06, 2017 URL : www.systematixshares.com Page No : 1

16.85CRUDE $

55.69

-0.02 0.2 2.11

INTE

RN

ATI

ON

AL

MA

RK

ET U

PD

ATE GOLD $

1269.29SILVER $

USDJPY114.362

0.07 0.01 0.33EURUSD

1.1613GBPUSD

1.30764

LME NICKEL

12825

0.84 0.34 0.9LME

COPPER6939 LME

ZINC3229

$ INDEX94.93

-0.02 0.28 0.22LME

ALUMINIUM

2185 LME LEAD

2475

DJIA23539

0.34 0.28 0.10SENSEX

33686NIFTY

10453


NIKKEI22515

-0.11 0.13 -0.11USDINR

64.74 S&P INDEX

2579

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MCX Gold Dec 2017Gold fell as consensus-beating U.S. economic data pushed the dollar higher, outweighing the impact of a lackluster jobs report.

Gold fell as consensus-beating U.S. economic data pushed the dollarhigher, outweighing the impact of a lackluster jobs report. The dollargained on a strong reading of U.S. factory orders and the services sector,reversing earlier losses after an underwhelming October jobs report. Theinterest rate outlook for the coming year is largely unchanged byPresident Donald Trump's appointment of Jeremy Powell as Fed chairmansaid it signaled a continuation of Janet Yellen's cautious monetarypolicies. Minneapolis Federal Reserve Bank President Neel Kashkari saidthat there is no sign of rising inflation and that the U.S. central bankshould hold off on raising interest rates until that changes. Demand forphysical gold was lacklustre in top consumers India and China, while thelure of the metal remained stable in Singapore, but India’s peak weddingseason is expected to usher in renewed interest for bullion in comingweeks. Dealers in India were charging a premium of up to $3 an ounceover official domestic prices, unchanged from last week. In October, Indiatightened gold import norms for jewellery exporters by restricting themfrom importing the yellow metal only for export purposes and not forselling in the domestic market. Meanwhile, in China, the market for theprecious metal remained quiet, with premiums of $5 to $9 an ounce beingcharged over benchmark rates, as against the $6.50 to $10 range in theprevious week. Premiums in Hong Kong remained more or lessunchanged from last week, in the 60 cents to $1.20 range. Technicallynow Gold is getting support at 1262.65 and below same could see a testof 1255.80 level, And resistance is now likely to be seen at 1276.30, amove above could see prices testing 1287.10.

OPEN HIGH LOW CLOSE % CHANGE OPEN INTEREST

29253

SUPPORT 3

29434 29357 29223 29012 28935 28801

29280 29069 29088 -0.53 6310

RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2


Trading Ideas :Gold trading range for the day is 28935-29357.The dollar gained on a strong reading of U.S. factory orders and the services sector, reversing earlier losses after an underwhelming October jobs report.Demand for physical gold was lacklustre in top consumers India and China, while the lure of the metal remained stable in Singapore.Dealers in India were charging a premium of up to $3 an ounce over official domestic prices, unchanged from last week.

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MCX Silver Dec 2017Silver dropped amid dollar strength as a weaker-than expected jobs report failed to derail investor expectations for a year-end rate.

Silver on MCX settled down -1.43% at 39048 amid dollar strength as aweaker-than expected jobs report failed to derail investor expectationsfor a year-end rate while a surge in the services sector lifted sentimenton riskier assets. Prices remained on track to post a three-week losingstreak amid ongoing risk-on sentiment as service sector growth offsetdata pointing to labor market weakness. ISM nonmanufacturing data forOctober showed an uptick to 60.1, beating expectations of 58.5. That wasthe highest reading for the service sector index since 2005. The upbeatnonmanufacturing report raised investor expectations of bullish U.S.economic growth, spurring a rebound on the dollar, which pressuredprices to sink to session lows. The U.S. economy added 261,000 jobs inOctober, the Department of Labor said, that missed estimates for310,000 new jobs. The jobless rate remained steady at 4.2% whileaverage hourly earnings was sluggish with growth roughly flat for themonth. Minneapolis Federal Reserve Bank President Neel Kashkari saidthat there is no sign of rising inflation and that the U.S. central bankshould hold off on raising interest rates until that changes. “There’s anervousness that if all of the sudden the labor market tightens morequickly than we’re anticipating...that all of a sudden inflation is muchhigher than we were expecting and we would then have to raise ratesaggressively,” Kashkari said at a housing and finance event inWashington. Technically market is under fresh selling as market haswitnessed gain in open interest by 11.23% to settled at 16000 whileprices down -566 rupees, now Silver is getting support at 38756 andbelow same could see a test of 38464 level, And resistance is now likelyto be seen at 39560, a move above could see prices testing 40072.


39669 39780

40364 40072 39560 38756 38464 37952

38976 39048 -1.43 16000

RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2 SUPPORT 3


Trading Ideas :Silver trading range for the day is 38464-40072.Prices remained under pressure amid ongoing risk-on sentiment as service sector growth offset data pointing to labor market weakness.The upbeat nonmanufacturing report raised investor expectations of bullish U.S. economic growth, spurring a rebound on the dollar.Fed’s Kashkari said that there is no sign of rising inflation and that the U.S. central bank should hold off on raising interest rates until that changes.

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MCX Crudeoil Nov 2017Crude oil prices settled higher on the back of data showing signs of U.S. production tightening as US oil rig counts fell to a nearly six-month low.

Crudeoil on MCX settled up 1.68% at 3579 following a late-session surgeon the back of data showing signs of U.S. production tightening as US oilrig counts fell to a nearly six-month low. Crude oil settled at two-yearhighs amid a spike in sentiment on oil prices after the number of oil rigsoperating in the US fell by eight to 729, declining for the fourth week infive, according to data from energy services firm Baker Hughes. That wasthe first time since May 26 that oil rig counts fell below 730, fuelingexpectations that market rebalancing is well underway as data earlier thisweek showed OPEC members continued to cut output. Saudi Arabiacontinued to cut oil output as inventories declined significantly in October,Saudi Energy Minister Khalid Al-Falih said, describing compliance with theOPEC-led accord to curb output as "excellent." Russian also adhered tothe cuts stipulated in the output-cut agreement despite increasing outputto 10.93 million bpd in October from 10.91 million bpd in September,official data showed. In May, OPEC producers agreed to extendproduction cuts for a period of nine months until March, but stuck toproduction cuts of 1.2 million bpd agreed in November last year. The rallyin crude oil prices comes as investor optimism on an extension of theOPEC-led agreement following recent comments from both OPEC and non-OPEC officials ahead of the OPEC meeting in Vienna on Nov. 30.Technically market is under fresh buying as market has witnessed gain inopen interest by 17.61% to settled at 19257 while prices up 59 rupees,now Crudeoil is getting support at 3537 and below same could see a testof 3496 level, And resistance is now likely to be seen at 3604, a moveabove could see prices testing 3630.


3540 3589

3671 3630 3604 3537 3496 3470

3522 3579 1.68 19257

RESIST 3 RESIST 2 RESIST 1 SUPPORT 1 SUPPORT 2 SUPPORT 3


Trading Ideas :Crudeoil trading range for the day is 3496-3630.The number of oil rigs operating in the US fell by eight to 729, declining for the fourth week in fiveRussia said the deal, due to expire in March, could be extended but a decision was not imminent.China’s roughly 9 million bpd of imports have surpassed those of the United States to top the world’s crude importer list.

####

MCX Copper Nov 2017Copper pulled back after a rally spurred by prospects for surging demand from electric vehicles.

Copper on MCX settled down -0.48% at 445.8 after a rally spurred byprospects for surging demand from electric vehicles. Prices also extendedlosses after the dollar index firmed on the back of strong U.S. economicdata. A proposal to scrap U.S. subsidies for electric vehicles (EVs) helpedto dampen investor excitement during the LME Week industry event inLondon over the potential for strong demand from the EV growth storyfor metals such as copper and nickel. Also weighing on prices was theproposal by U.S. House Republicans to eliminate the $7,500 tax credit forelectric vehicles at the end of the year. Weekly data showed copperinventories in warehouses monitored by the Shanghai Futures Exchangeclimbed 18 percent, indicating supplies were adequate. Copperconcentrates is an important bulk resource goods imported at WeiahiPort. During first three quarters this year, Weihai port imports container-based copper concentrates of about 26,400 tonnes, whose value reachesabout $52.84 million, rising 22.8% and 168.8% respectively on yearlybasis. Credit Suisse says, in 2018 the average copper price is estimatedto reach to $2.65 per pound, higher than previous prediction of $2.05 perpound. The bank also states in the report, saying the copper price willperform even better in 2019 and 2020. China’s official manufacturing PMIwas lower than previous figure and expected in October. The PMI was51.6 in October, versus September’s 52.4 and 52.1 expected. Technicallymarket is under fresh selling as market has witnessed gain in openinterest by 6.05% to settled at 12885 while prices down -2.15 rupees,now Copper is getting support at 443.3 and below same could see a testof 440.7 level, And resistance is now likely to be seen at 449.5, a moveabove could see prices testing 453.1.


447.00

SUPPORT 3

455.7 453.1 449.5 443.3 440.7 437.1

450.50 444.30 445.80 -0.48 12885


Trading Ideas :Copper trading range for the day is 440.7-453.1.Prices also extended losses after the dollar index firmed on the back of strong U.S. economic data.Weekly data showed copper inventories in warehouses monitored by the Shanghai Futures Exchange climbed 18 percent, indicating supplies were adequate.Warehouse stock for Copper at LME was at 270400mt that is down by -3450mt.


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MCX Zinc Nov 2017Zinc prices ended with losses as pressure seen due to rise in Chinese inventories.

Zinc on MCX settled down -1.11% at 208.9 as pressure seen due to risein Chinese inventories. Weekly data showed zinc inventories inwarehouses monitored by the Shanghai Futures Exchange jumped 22percent indicating supplies were adequate. Global demand for refined zincmetal will exceed supply by 398,000 in 2017, while a deficit of 223,000tonnes is expected next year, the International Lead and Zinc StudyGroup (ILZSG) said. Demand for refined zinc metal is forecast to increaseby 0.7 percent to 13.93 million tonnes in 2017 and then by 2.5 percent to14.28 million tonnes in 2018, the group said. South Korea seeks to buy1,000 tonnes of zinc for January arrival via a tender, state-run PublicProcurement Service said. Glencore lowered its production forecast forcopper, zinc and coal on Monday, citing operational difficulties,maintenance and end-of-mine-life declines. Meanwhile the key question iswhen Glencore will bring back its production, given that zinc prices haverisen almost 90 per cent since its announcement. The miner-cum-traderis likely to implement a phased introduction of supply into the market, soas not to crash prices. China's central bank injected medium-term loansinto the financial system, in order to stabilize money supply. The People'sBank of China said it offered CNY 404 billion of one-year funds under theMedium-term Lending Facility. The interest rates for the MLF remainedunchanged at 3.20 percent. Technically market is under long liquidationas market has witnessed drop in open interest by -8.37% to settled at7299 while prices down -2.35 rupees, now Zinc is getting support at207.6 and below same could see a test of 206.3 level, And resistance isnow likely to be seen at 211.1, a move above could see prices testing213.3.


211.9

SUPPORT 3

214.6 213.3 211.1 207.6 206.3 204.1

212.1 208.5 208.9 -1.11 7299


Trading Ideas :Zinc trading range for the day is 206.3-213.3.Weekly data showed zinc inventories in warehouses monitored by the Shanghai Futures Exchange jumped 22 percent indicating supplies were adequate.Global demand for refined zinc metal will exceed supply by 398,000 in 2017, while a deficit of 223,000 tonnes is expected next year.Warehouse stock for Zinc at LME was at 249250mt that is down by -1650mt.


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MCX Nickel Nov 2017Nickel prices renewed their advance on expectations of bullish demand from the electric vehicle (EV) battery sector.

Nickel on MCX settled up 1.42% at 820.1 as prices renewed theiradvance, putting the metal on course for a gain of nearly 10 percent inthe week and 27 percent year-to-date on expectations of bullish demandfrom the electric vehicle (EV) battery sector. LME three-month nickelgained 1 percent to end at $12,725 a tonne, ending the week 10 percenthigher. The contract hit its highest in more than two years at $13,030 onWednesday. In 2020, the nickel consumption is expected to rise from5,000 tonnes in 2016 to 30,000 tonnes in 2020. Meanwhile, manycountries abroad has announced schedule of elimination of fuel cars. Thenickel consumption used for electric cars battery is expected to reach100,000 tonnes in 2020. Philippine is expected to export about 4.66million wet tonnes nickel ore in October, dropping dramatically comparedwith September. The order shows from Nov.4th to 7th, Shanxi Provincewill suffer from a heavily polluted weather process. The order asked allcities to launch alert beyond orange level during that time and escalateemergency response level and take urgent emission reduction measuresas per the pollution level at any time. The order requires all cities toimplement those measures strictly, saying all industrial plants shallstagger production during heating season and transportation andconstruction sites shall stop operation, which aims to firmly reduce airpollutant emission. Technically market is under short covering as markethas witnessed drop in open interest by -2.83% to settled at 9519 whileprices up 11.5 rupees, now Nickel is getting support at 808 and belowsame could see a test of 796 level, And resistance is now likely to be seenat 829.5, a move above could see prices testing 839.


813.1

SUPPORT 3

851.0 839.0 829.5 808.0 796.0 786.5

827 805.5 820.1 1.42 9519


Trading Ideas :Nickel trading range for the day is 796-839.Philippine is expected to export about 4.66 million wet tonnes nickel ore in October, dropping dramatically compared with September.In 2020, the nickel consumption is expected to rise from 5,000 tonnes in 2016 to 30,000 tonnes in 2020.Warehouse stock for Nickel at LME was at 384054mt that is up by 2484mt.


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NCDEX Jeera Dec 2017Jeera prices settled flat amid subdued demand from the physical players due to weak exports.

Jeera on NCDEX settled flat amid subdued demand from the physicalplayers due to weak exports. As per sources, current year Jeera sowingarea likely to go up in Gujarat and Rajasthan due to higher pricesthroughout the year. Jeera sowing started in Gujarat (Saurashtra, Kutch)and Rajasthan major growing regions. However, sowing progressreported slow due to higher temperature. Higher temperature normallyaffect the germination. Expected sowing area likely to go up by 20- 25%in Gujarat current year. The arrivals have been higher during October thisyear at 3,760 tonnes compared to 2,130 tonnes last year same periodaccording to data. However, in the second half of Oct the arrivals havebeen reduced significantly to 963 tons Vs 2,795 tons in the first half. Asper government data, Jeera exports during first four month of FY 2017/18(Apr-Jul) is 49,205 tonnes, down 11% compared to last year exportsvolume for the same period. India's jeera exports in Jul down 12% onyear to 7,498 tn. Cumin seed acreage increasing by about 8-10 per centin Gujarat and the bordering districts of Rajasthan in 2017-18, followingattractive prices that the seed spice fetched farmers last year. Estimatesindicated jeera production for 2016-17 at around 4.85 lakh tonnes withthe area under jeera at 7.60 lakh hectares. In Unjha, a key spot marketin Gujarat, jeera edged down by -54.6 Rupees to end at 18968.75Rupees per 100 kg.Technically market is under fresh selling as markethas witnessed gain in open interest by 2.96% to settled at 9606 whileprices remain unchange0 rupees, now Jeera is getting support at 18920and below same could see a test of 18825 level, And resistance is nowlikely to be seen at 19090, a move above could see prices testing 19165.


18965

SUPPORT 3

19660 19470 19345 19030 18840 18715

19280 18965 19220 1.08 10197


Trading Ideas :Jeera trading range for the day is 18840-19470.As per sources, current year Jeera sowing area likely to go up in Gujarat and Rajasthan due to higher prices throughout the year. NCDEX accredited warehouses jeera stocks dropped by 96 tonnes to 6823 tonnes.In Unjha, a key spot market in Gujrat, jeera edged down by -18.75 rupees to end at 18950 rupee per 100 kg.


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NCDEX Turmeric Dec 2017Turmeric prices gained on short covering amid expectation of good demand form the bulk buyers.

Turmeric on NCDEX settled up 0.59% at 7178 on short covering amidexpectation of good demand form the bulk buyers. Market is expectinghigher production in the new season. The arrivals have been lower duringfirst 25 days of October at 5,642 tonnes compared to 8,472 tonnes lastyear same period according to data. The export of turmeric is down by16.4% to 41,517 tonnes for the first 4 month of FY 2017/18 compared tolast years’ exports. For 2017/18, turmeric sowing in Telangana, thisseason down 1.5% to 44,956 hectares as compared to last year acreageof 45,633 hectares. Market participants are expecting good production inthe coming season due to rains in turmeric sowing areas. Turmeric outputmay rise at 1-1.1 million tons in 2017-18 season compared to last year.In 2016-17, turmeric output is pegged at 1.13 million tons bygovernment in the third advance estimate, higher from 943,000 tons in2015-16. Moreover, despite of marginally lower sowing this year turmericproduction is expected to rise on favourable rainfall. Buyers purchasedpoor quantity of turmeric due to want of demand. At the Erode TurmericMerchants Association sales yard, finger turmeric sold at Rs. 5,841 to Rs.8,131 a quintal and root variety at Rs. 5,529 to Rs. 7,594 a quintal.Technically market is under fresh buying as market has witnessed gain inopen interest by 13.01% to settled at 5560 while prices up 42 rupees,now Turmeric is getting support at 7145 and below same could see a testof 7111 level, And resistance is now likely to be seen at 7205, a moveabove could see prices testing 7231.


7158

SUPPORT 3

7266 7232 7206 7146 7112 7086

7198 7138 7178 0.59 5560


Trading Ideas :Turmeric trading range for the day is 7112-7232.The arrivals have been lower during first 25 days of October at 5,642 tonnes compared to 8,472 tonnes last year same period according to data.NCDEX accredited warehouses turmeric stocks dropped by 229 tonnes to 2099 tonnes.In Nizamabad, a major spot market in AP, the price ended at 0 Rupees remains unchanged at0 Rupees.


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MCX Menthaoil Nov 2017Mentha oil gained due to pick up in demand from consuming industries in the domestic spot market.

Menthaoil on MCX settled up 3.37% at 1467.3 due to pick up in demandfrom consuming industries in the domestic spot market. Furthermore,tight stocks position following restricted arrivals from major producingbelts of Chandausi in Uttar Pradesh also supported mentha oil pricesuptrend. As winter season is approaching there is expectation of increasein export demand which is supporting prices to trade upside. As persources, tight stock position which has been followed by fall in arrivalsfrom the major producing belts of Chandausi in Uttar Pradesh has givensupport to the uptrend in prices. Speculators have widened their positionsbecause of pick-up in demand from consuming industries in the spotmarket against restricted supplies. Stock positions of mentha in MCXaccredited warehouses were around 9292 drums which is 24 drums lessin comparison to the previous day, while in process were 372 drums,which is 48 drums more against the previous day. As per the reports theglobal demand of essential oil will increase in the coming years. This willboost mentha oil demand, mainly from medicines, health products,cosmetics as well as food and beverages. From export front, the demandfor mentha oil will emerge from the European Union, the UK, Japan, theUK, China and Singapore. Also the limited supply from the majorproducing regions of Uttar Pradesh is giving support to mentha oil prices.Technically market is under short covering as market has witnessed dropin open interest by -8.64% to settled at 2877 while prices up 47.9rupees, now Menthaoil is getting support at 1434.2 and below same couldsee a test of 1401.1 level, And resistance is now likely to be seen at1487.2, a move above could see prices testing 1507.1.


1421.00

SUPPORT 3

1540.2 1507.1 1487.2 1434.2 1401.1 1381.2

1474.00 1421.00 1467.30 3.37 2877


Trading Ideas :Menthaoil trading range for the day is 1401.1-1507.1.Mentha oil spot at Sambhal closed at 1588.50 per 1kg. Spot prices was remain unchangeby Rs.0.00/-.Furthermore, tight stocks position following restricted arrivals from major producing belts of Chandausi in Uttar Pradesh also supported mentha oil prices.As winter season is approaching there is expectation of increase in export demand which is supporting prices to trade upside.


TIME ZONE Forecast

CommodiME STOCK StockCOPPER -3450 270400

ALUMINIU -2900 1181300

NICKEL 2484 384054

LEAD -300 148475

ZINC -1650 249250

4901 18310 19220 3690 7178 3982 554.2 2893

DAILY MARKET TRADING LEVEL

COMMODITIES NCDEX CHANA Dec 2017

NCDEX Pepper Dec 2017

NCDEX Jeera Dec 2017

NCDEX Guarseed10 Dec 2017

NCDEX Turmeric Dec 2017

NCDEX Rmseed Dec 2017 MCX CPO Nov 2017 NCDEX Soyabean

Dec 2017

NCDEX Ref.Soya oil

Dec 2017705.3CLOSE

P. POINT 4876 18330 19155 3671 7172 39894949 18420 19345 3724 7206 4009

RESISTANCE5070 18620 19660 3812 7266 4055

553.7 2905 707

7214997 18530 19470 3759 7232 4035 561.5 2963 717

565.7 2986

557.9 2928 711

3583 7112 3943 545.9 2847 6974828 18220 19030 3636 7146 3963 550.1 2870

691Cng in OI -2.94 -0.37 6.15 4.58 13.01 3.20 -15.01 8.12 1.21

SUPPORT4707 18020 18715 3548 7086 3917 542.3 2812

7014755 18130 18840

Fresh Selling

LME DAILY STOCK POSITION ECONOMICAL DATADATA Previous

12:30pm EUR German Factory Orders m/m -0.01 0.036

TREND Short Covering Short Covering Fresh Buying Fresh Buying Fresh Buying Fresh Selling Long Liquidation Fresh Selling

1:45pm EUR Spanish Services PMI 55.7 56.7

2:15pm EUR Italian Services PMI 53.1 53.2

2:20pm EUR French Final Services PMI 57.4 57.4

2:25pm EUR German Final Services PMI 55.2 55.2

2:30pm EUR Final Services PMI 54.9 54.9

3:00pm EUR Sentix Investor Confidence 31.2 29.7

3:30pm EUR PPI m/m 0.004 0.003

All Day EUR Eurogroup Meetings 0 0

0 0 0 0 0


‐3450

‐2900

2484

‐300

‐1650

‐4000

‐3000

‐2000

‐1000

0

1000

2000

3000

COPPER ALUMINIUM NICKEL LEAD ZINC

LME STOCK

NEWS YOU CAN USE

Activity picked up slightly in China’s services sector in October but growth remained modest and much weaker than historical trends, a private survey showed. Thefindings, along with other private and official business readings earlier in the week, are likely to reinforce views that the world’s second-largest economy saw a moresubdued start to the fourth quarter after racing ahead earlier in the year. The Caixin/Markit services purchasing managers’ index (PMI) rose to 51.2 in October, upslightly from September’s 21-month low but suggesting only a subdued expansion in activity and new orders. A reading above 50 indicates growth, and any lowersignals deterioration on a monthly basis. The index had hit a three-month high in August. An official gauge of the non-manufacturing sector showed slower but stillrelatively solid growth in October. China’s leaders are counting on growth in services and consumption to rebalance their economic growth model from its heavyreliance on investment and exports. The services sector accounts for over half of the economy, with rising wages giving Chinese consumers more spending power thatis being felt at home and abroad. Unlike the official data, the Caixin survey tends to focus more on small and mid-sized companies, which have tended to be undergreater strain than their larger, state-supported peers.

The Bank of England raised its key rate for the first time in a decade despite Brexit hurting the economy, as inflation sticks to upward trend on a weaker pound. The Monetary PolicyCommittee, headed by Governor Mark Carney, decided to lift the benchmark rate by 25 basis points to 0.50 percent. This was the first rate hike since July 2007. The MPC voted 7-2 to raisethe interest rate. Policymakers voted unanimously to maintain the quantitative easing at GBP 435 billion. The latest policy action has removed the emergency support announced in August2016 in the wake of the Brexit vote. "There remain considerable risks to the outlook, which include the response of households, businesses and financial markets to developments related tothe process of EU withdrawal," the bank said. The bank also noted that inflation was above its 2 percent target, because of the sharp fall in the pound triggered by the EU referendum.Looking ahead, markets have priced in two more rate hikes for the three-year horizon ending 2020, the bank's quarterly Inflation Report, showed. Policymakers omitted a portion fromprevious statements that rates may need to be raised more than financial markets expect. The monetary policy continues to provide significant support to jobs and activity in the currentexceptional circumstances, the bank said. Among nine MPC members, Jon Cunliffe and Dave Ramsden voted to keep the rate unchanged at 0.25 percent.

The Commission for Agricultural Costs and Prices (CACP) has recommended Rs 20 per quintal hike in the fair and remunerative price of sugarcane at Rs 275 per quintalfor next season, a government official said. The fair and remunerative price (FRP), the minimum price sugar mills have to pay to farmers, has been fixed at Rs 255 perquintal for the 2017-18 season that starts from this month. "For the next 2018-19 season, the CACP has proposed Rs 275 per quintal FRP for sugarcane factoring (in)cost of production, transportation and crop insurance premium and other expenses," the official told PTI. A report in this regard was recently submitted to the foodministry by the CACP, a statutory body that advises the government on the pricing policy for major farm produce. The FRP price is linked to a basic recovery rate of 9.5per cent, subject to a premium of Rs 2.68 per quintal for every 0.1 per cent point increase in recovery rate. Usually, the government accepts the CACPrecommendations. The proposed increase is also likely to result in states like Uttar Pradesh that do not follow the centrally-announced FRP raising their own advisoryprices. Major sugarcane producing states such as Uttar Pradesh, Punjab and Haryana fix their own sugarcane price called 'state advisory prices' (SAPs), which areusually higher than the Centre's FRP.


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