Spices complex remained firm on Saturday after three days of continuous downfall as traders rolled over their short position in anticipation of further price spurt during the forthcoming festival season.
Cardamom prices on the Multi Commodity Exchange (MCX) hit the upper circuit to trade at Rs 975 a kg on Saturday on strong fundamentals. The demand of the flavoured spice has surged ahead of the festival season both from the domestic as well overseas markets. The delay in rainfalls across major growing areas, followed by drought in some areas, affecting, thereby, the crop during the current harvesting season.
According to Ajay Kedia, managing director of Kedia Commodity, a Mumbai - based broking firm, traders rolled over their open position on Saturday in anticipation of high prices during this festival season. The three days of fall in spices complex, therefore, arrested.
|HEATING UP (Rs /quintal)|
|& Price/kg Source: Exchanges|
During 2011-12, cardamom production went up 25 per cent to 12,975 tonnes against 10,380 tonnes in the previous year. Kerala accounted for a major share in the total production at 10,222 tonnes. Karnataka and Tamil Nadu stood at the second and third positions with 1,911 tonnes and 842 tonnes, respectively. The year 2011-12 witnessed all-time high exports of 4,650 tonnes valued at Rs 363.2 crore, compared with 1,175 tonnes, valued at Rs 132.2 crore in the previous year. This helped increase the value realisation by Rs 231.1 crore, despite a fall in the unit value realisation by 30.6 per cent at Rs 781.1 a kg. Export from India was higher since Guatemala has not recovered from the damages that cardamom plantations suffered. Major importers of Indian cardamom are Saudi Arabia, United Arab Emirates, Kuwait and Egypt.
"Drought in major producing regions in Kerala has not only delayed cardamom crop for 2012-13, but also lowered it. Extended dry spell and drought have caused wilting of plants and hence productivity has suffered," United Planters' Association of South India (Upasi) said in its latest report.
Jeera's November contract gained Rs 457.5 and settled at Rs 14945 per quintal as short covering was seen from lower levels spurred by waning carryover stocks against strong demand of exporters.
Kedia further said demand was strong from both local and overseas buyers and was expected to stay firm in the short term. But any sharp downside is unlikely as festive buying is seen supporting. The total jeera stocks are currently estimated at around 400,000-500,000 bags (1 bag = 100 kg), down almost 300,000 bags from the last year in the same year. On the demand side, the export demand of jeera remained strong in local mandies due to weak supplies from Syria and Turkey. The total arrivals remained unchanged at 5,000 bags today, while demand was seen for around 9,000 bags against 12,000 bags that were reported last day.
Jeera is a winter crop sown from October, and farmers depend on rains to moisten the land for sowing. However, prospects of better sowing due to favourable weather conditions restricted any sharp gains. Jeera prices have been on a corrective mode since many months and recently prices seem to have taken a pause from weakness. Prices are making higher lows, gradually though as seasonal demand provides the undercurrent for recovery. In Unjha, a key spot market in Gujarat, jeera gained Rs 207.3 to end at Rs 14782.3 per 100 kg.
In other spices complex, pepper November contract dropped Rs 160 and settled at Rs 43,590 a quintal due to subdued overseas sales and as the new crop trumped initial expectation due to revived rains. Chilli and coriander also gained in tandem following the trend.