Epic Research Daily Agri Commodity Report Of 9 May 2018

Indian Tea industry has recorded the highest ever production as well as exports in FY18. The total Tea production was 1325.05 million kgs, an increase of 74.56 million kgs as compared to 2016-17. In percentage terms the increase is around 6%. The total quantity of Tea exported during the financial year 2017-18 stood at 256.57 million kgs. In percentage wise the increase is arround 12.71% to 28.94 million kgs during 2017-18 as compared to the corresponding period last year. The foreign exchange realized from exports of Indian Tea was $ 785.92 million, the revenue earned from exports saw a rise of $ 95.19 million (13.78%).

A draft policy issued by the Food Safety and Standards Authority of India (FSSAI) that mandates displaying a red colour coding on front-of-thepack labels on packaged food products with high fat, sugar or salt levels has made the country’s Sugar sector turn red. For the country’s Sugar millers who are already reeling under the impact of falling prices and a piling inventory, this move could come as a major blow since it would imply that consumption of Sugar is harmful for health.

Rice stocks with Food Corporation of India’s (FCI’s) central pool reached 25 million tonnes at end-April, the highest since 2013. As of Monday, the total of Rice with it and its other nominated agencies was 32.96 million tonnes, a third from Punjab (11.83 million tonnes). Wheat procurement is at 29.67 million tonnes, with plans to buy another two to three million tonnes. “Although the Rice stock is relatively high, it is not at an alarming level. We require 32 million tonnes of Rice and 36 million tonnes of Wheat in our central pool for one year of distribution need, through the Public Distribution System (PDS).

Economic News

The overall outlook for sugar remained weak even when the government's cane subsidy might marginally improve operational profitability of the mills, Icra said in a report. "With the reduced cane costs, the total contribution margin is likely to increase by around Rs 500 per tonne of sugar produced, which translates into a one-and-a-half per cent margin at the operating level," Icra Ratings Senior Vice President and Group Head Sabyasachi Majumdar said. However, he said, in inspite of the expected marginal improvement in operating profitability, the overall profitability outlook for the sugar sector remained weak for FY19. "On the positive side, however, the production subsidy aims to expedite the pace of exports, which in turn is expected to relieve the pressure from domestic sugar stocks and raise domestic sugar realisations to an extent, thereby offsetting losses from sugar exports," he added.

The Cotton Association of India (CAI) has retained its April estimate of the cotton crop for the season 2017-18, at 360 lakh bales of 170 kgs each, but has revised state output figures. The CAI has revised the state outputs, and for Maharashtra and Karnataka the production are estimated to be higher by 2 lakh bales and 50,000 bales, respectively, CAI said in a release issued here. While the production in Telangana and Andhra Pradesh are now estimated lower by 1.50 lakh bales and 1 lakh bales, respectively. In Gujarat the total output was estimated at 105 lakh bales this season compared to 89 lakh bales last year. The total cotton production was 337.25 lakh bales in 2016-17 season. The cotton marketing season begins from October 1. The Statistics Committee of the Association has projected total supply up to April 30, at 347 lakh bales, that included arrivals of 311 lakh bales up to April 30, and imports which was estimated at 6 lakh bales up to the end of last month.

Trading Recommendations

SELL CORIANDER MAY BELOW 4700 TARGET 4670/4630/4580 SL 4750
BUY TMC MAY ABOVE 7070 TARGET 7100/7130/7160 SL 7030
SELL GUARGUM5 MAY BELOW 8200 TARGET 8170/8130/8080 SL 8250

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This release was published on openPR.