Spices Update

Jeera and Turmeric Update

17th November, 2016

Spices Update Jeera (Cumin) Price Performance - Monthly

• In 2016, jeera prices have been in uptrend until

July in futures market due to good demand from

the stockists and improving exports.

• Traders and stockists have received higher

domestic demand for jeera due to good quality

production this year after two years of lower

production and quality issues due to bad

weather during harvest months.

2

• In 2013-14 and 2014-15, bad weather and unseasonal rains have limit the production in

Rajasthan and Gujarat. However, in 2015-16 jeera production forecasted higher by the

government organizations and trade bodies.

• The prices of cumin seed in 2016 touched all time highs in July due to increasing domestic

demand, good quality produce and higher demand for exports.

• The domestic prices of cumin seed mainly depends on the forecast of area and production,

weather during crop development, carry over stocks and export demand.

• Market is expecting a bumper crop during 2016-17 season due to good sowing progress.

13000

14000

15000

16000

17000

18000

19000

20000

Jan-1

6

Feb-1

6

Mar-1

6

Ap

r-16

May-1

6

Jun

-16

Jul-1

6

Au

g-16

Sep-1

6

Oct-1

6

No

v-16

Source: Reuters

Monthly Average Closing Price- Jeera (Rs/Quintal)- NCDEX

Spices Update Producing states and Production Estimates - Jeera

3

In 2015-16, country produce highest ever jeera recorded in the country as per

Department of Agriculture, Cooperation and Farmers Welfare (Horticulture Division). In

its 3rd advance estimate, total production of Cumin (Jeera) seed is projected at 3.74 lt, up

by 18% compared to previous year production.

In 2016-17, the production will be depending on the acreage, which according to market

sources may be at the same levels as last year.

Rajasthan and Gujarat are the top jeera

producing states in the country which account

for 80% of crop.

The Jeera crop is expected to be good in 2016/17

due to higher prices realization by the farmers

during last year. Moreover, most parts of North-

West India have received normal to excess

rainfall during the monsoon months will support

good yield and higher acerage.

1.32

2.20 2.48

3.41 3.17

3.74

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

20

10

-11

20

11

-12

20

12

-13

20

13

-14

20

14

-15

20

15

-16

Jeera Production (Lakh Tonnes)

Source: Spice Board

Spices Update

4

Jeera Arrivals Declining

0

20000

40000

60000

80000

100000

Apr May Jun Jul Aug Sep Oct Total

Monthly Arrival Comparision of Jeera in 2016-17 and 2015-16

FY16-17 FY15-16 Source: Agmarknet

As per the Agmarknet data, total arrival of Jeera in

Gujarat and Rajasthan during first seven months in FY

2016/17 is down by about 13.8% compared to last

year for the same period.

In current year, the arrivals are closed to 73,967

tonnes compared to 85,785 during last year.

The arrival of jeera in the physical market is declining

after peaking during April, May and June as per the

seasonal trend.

In Gujarat, arrivals recorded about 27.7% lower at 1.3

lt during the current year compared to last season

while Rajasthan recorded almost the same arrival

volume at 1.3 lt.

The arrival volume in Rajasthan drastically reduced in

2015 & 2016 compared to 2014 arrivals due to lower

production.

0

100000

200000

300000

400000

500000

Y-2014 Y-2015 Y-2016

Gujarat & Rajasthan - Total Arrivals (tonnes) (Apr-Oct 2016)

Source: Agmarknet

Spices Update

5

Export picking up in 2016/17: Jeera In FY 2016/17, till August, India exported about

63,797 tonnes which higher by 63% compared to

last year export of 39,120 tonnes, as per the data

released by Department of Commerce.

In the first five months of FY 2016/17, jeera exports

has achieved about 64% of last year’s export

volume due to good export demand that means the

exports will surpass last year figures.

In 2014/15, country achieved highest ever export

volume, but dropped in 2015/16 due to lower

availability and higher prices of jeera in the

domestic market.

The top five-export destination for jeera are

Vietnam, USA, UAE, Brazil and Egypt. Vietnam is the

largest importer, which imports more than 41 % of

total jeera exported by the country last year.

0

30000

60000

90000

120000

150000

180000

20

11

-12

20

12

-13

20

13

-14

20

14

-15

20

15

-16

20

16

-17

*

Cumin Exports ( Tonnes) from India

Source: Spice Board * Dept of Commerce (Apr-Aug)

4,000

9,000

14,000

19,000

24,000

Jan Feb Mar Apr May Jun Jul Aug

Export comparision (tonnes ) - 2015 & 2016 -Jeera

Y2015 Y2016 Source: Dept of Commerce

Spices Update

6

Technical Outlook: Jeera

• NCDEX Jeera is trading in a down trend from last couple of months after making a lift time high of 20,020 levels in July 2016.

• Prices are trading below its 5 month Exponential moving average (EMA) which indicates short term trend to shifted towards down side.

• However, prices trading above its 20, 50, 100 (Monthly basis) EMA, which shows that trend is positive for long term perspective.

• As per technical indicators 14 Months RSI is hovering between 50 -60 marks with negative tone and MACD is also showing Negative divergence in the prices.

We expect Jeera prices to find support at 16,000/15,800 levels and Trading consistently below 16,000 levels would lead towards the strong support at 15,000 level. Resistance is now observed at 18,000 / 18,300 levels and trading above 18,300 levels would lead towards the strong resistance at 19,000 levels.

Spices Update

7

Fundamental Price outlook - Jeera

7

• The sowing of Jeera has started in the country in the

states of Gujarat and Rajasthan which is expected to

be good compared to last year due to good monsoon

and higher price realization by farmers.

• The price of jeera started to get firm in November

after trending down during previous three months

due to diminishing carry over stocks.

9550

10550

11550

12550

13550

14550

15550

16550

17550

18550

19550

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Monthly Avg. Price of jeera for last 3 years- NCDEX (Rs per Quintal)

Y 2014 Y 2015 Y 2016 Source- NCDEX

• During the current calendar year (2016), jeera prices were higher compared to last two year

as exports as well as the quality have been encouraging this season despite higher prices.

• The stock position in NCDEX warehouse is at lower level compared to last year stocks which

indicate that the traders have not deposited jeera but holding as it fetched good price.

• We expect NCDEX Jeera prices (CMP: Rs.17,450/Quintal) for December delivery to ease a

bit towards Rs. 16,000/15,800 levels if the exports demand fade away in anticipation of

better crop next season. But on dwindling supplies and good export demand the price

may surged to Rs 19,000 levels during the off-season.

Spices Update

8

Turmeric Price Performance - Monthly

6800

7300

7800

8300

8800

9300

9800

Jan-1

6

Feb-1

6

Mar-1

6

Ap

r-16

May-1

6

Jun

-16

Jul-1

6

Au

g-16

Sep-1

6

Oct-1

6

No

v-16

Source: NCDEX

Monthly Avg closing Prices of Turmeric (Rs per Quintal) - 2016 • In 2016, Turmeric prices on futures market was

under pressure and trending down due to higher

availability of new season stocks.

• The prices were also lower as north Indian

buyers were inactive in the market claiming that

upcountry trading centers were holding good

stocks from previous purchases.

• Despite the monthly fall, the prices have been on higher side in 2016 compared to last two

year amid on lower acreage for second consecutive season and good export demand. The

price were under pressure due to inferior quality arrivals coupled with expectation of good

sowing progress during the Jun- Jul period after two years of drought.

• The domestic prices of turmeric seed mainly depends on the forecast of area and

production, weather forecast during crop development, carry over stocks and export

demand.

• Market is expecting a bumper crop during 2016/17 season due to higher acreage and good

climatic conditions.

Spices Update

9

Producing states and Production Estimates - Turmeric

In 2015-16, Department of Agriculture, Cooperation and Farmers Welfare (Horticulture

Division) in its 3rd advance estimate, pegged the total production of Turmeric at 9.57 lt,

while Spice board estimated about 8.43 lt. The production of turmeric during the last two

previous years were lower due to drought situation and lower acreage.

The new season crop in 2016-17, will hit the markets in the next month and the quality &

production is expected to be good on forecast of good weather during the harvesting

season.

Turmeric is widely grown in the southern

peninsular region of India. The main turmeric

growing States are Tamilnadu, Telangana and

Odisha, which occupies about 60% area followed

by Andhra Pradesh, West Bengal and Karnataka

occupying 23% of total turmeric area.

India have received normal to excess rainfall

during the monsoon season which may help

increase of production by 25-30 % in 2016-17.

9.87

10.93

8.46 8.43

11

6

7

8

9

10

11

12

1.4

1.5

1.6

1.7

1.8

1.9

2.0

2.1

2.2

2012-13 2013-14 2014-15 2015-16* 2016-17**

Prod (lakh tonnes)- RHS Area (lakh Hac) - LHS

Source: Spice Board * Estimates ** Forecast

India Turmeric - Area (Lakh Hac) & Production (Lakh Tonnes)

Spices Update

10

Expecting higher Turmeric Arrivals in new season too

The new crop for 2016/17 season will start to hit

the market in December. The arrival season peak

during March, April and May.

In calendar year 2016, as per the Agmarknet data,

total arrival of Turmeric during first ten months, ups

about 57% compared to last year arrivals for the

same period.

In current year, the arrivals are closed to 2 lakh

tonnes till October compared to 1.27 lt last year.

Maharashtra and Telangana recorded the highest

arrivals among the other turmeric sowing states.

The arrivals of turmeric in the physical market may

surpass arrival figures of 2012 as the prices have

improved in recent months.

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Monthly arrivals (tonnes) - 2016 & 2015

Year-2016 Year-2015 Source: Agmarknet

1,00,000 1,20,000 1,40,000 1,60,000 1,80,000 2,00,000 2,20,000 2,40,000

Y20

12

Y20

13

Y20

14

Y20

15

Y20

16

*

Yearly Arrivals in a Calender Year - tonnes

Source: Agmarknet *Jan-Oct

Spices Update

11 11

Export higher in 2016/17: Turmeric

India exported about 51,147 tonnes in 2016/17 till

August which is higher by 32% compared to last

year export of 38,761 tonnes, as per the data

released by Department of Commerce.

In the first five months, turmeric exports has

achieved about 60% of last year’s export volume

due to good export demand from Iran and the USA.

In 2015-16, India exports about 85,411 tonnes of

turmeric, which is lower by 5.9 % lower compared

to previous year.

The top five-export destination during current

financial year is Iran, UAE, USA, Bangladesh and

Malaysia. Iran is the largest importer, which imports

about 15 % of total turmeric exported by the

country last year.

0

20000

40000

60000

80000

100000

Ap

r-M

ar

Ap

r-A

ug

Ap

r-M

ar

Ap

r-A

ug

Ap

r-M

ar

Ap

r-A

ug

Ap

r-M

ar

Ap

r-A

ug

FY13-14 FY14-15 FY15-16 FY16-17*

Yearly Exports of Turmeric - tonnes

4,000

6,000

8,000

10,000

12,000

14,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Turmeric Export comparision (tonnes ) - 2015 Vs 2016

Y2015 Y2016 Source: Dept of Commerce

Spices Update

12

Technical Outlook: Turmeric

• NCDEX Turmeric is trading in a down trend since the start of 2016 after making a high of 10690 levels in Dec 2015. Price trend is following “Lower top and lower bottom” is basically a bearish sign and observed that chart formed many bearish candlestick patterns.

• Exponential moving average (EMA) prices are trading below its 5 and 20 Monthly EMA indicates short term down trend. However, prices trading above its 50 and 100 (Monthly basis) EMA, which shows that trend is positive for long term perspective.

• As per technical indicators 14 months RSI is falling and MACD is showing negative divergence which is negative for the prices.

We expect Turmeric prices to find support at 6,300 – 6,000 levels and trading consistently below 6,000 levels would lead towards the strong support at 5,500 level. The resistance is seen at 7,800 – 8,000 levels and trading consistently above 8,000 levels would lead towards the strong resistance at 8,800 levels.

Spices Update Fundamental Price outlook - Turmeric

13

• The harvest of turmeric is nearing and market is

expecting a good harvest this time due to near

perfect climatic conditions in the turmeric sowing

states in the country.

• During the current calendar year (2016), turmeric

prices were higher compared to last two year due to

higher demand and good export volume till the

month of August.

• However, the prices started to decline below the last year prices after reports of good

sowing acreage and normal monsoon.

• We expect NCDEX Dec’16 Turmeric prices (CMP: Rs. 7,032/Quintal) to ease a bit towards

Rs. 6,300/6,000 levels on anticipation of higher arrivals of turmeric in one month time.

The exports and the domestic demand may support prices just before harvesting during

the off-season.

6000

6500

7000

7500

8000

8500

9000

9500

10000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Yearly Price comparison of turmeric - Rs /Quintal - NCDEX

Y2015 Y2014 Y2016 Source- NCDEX

Spices Update

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14

Ritesh Kumar Sahu

Analyst- Agri Commodities

riteshkumar.sahu@angelbroking.com

022 3935 8165

Anuj Gupta

Head Technical Research (Commodities and

Currencies)

anuj.gupta@angelbroking.com

(011) 4916 5954