Epic Research Daily Agri Commodity Report Of 25 May 2018

Shortage of workers at cold storages, due to local body elections, triggered a 17 percent increase in Potato prices in West Bengal. Prices in the wholesale market went up to Rs 200 a quintal in the past one week. The Jyoti Potato variety, which was being sold at around Rs 15 a kg in the retail market even about ten days ago, is currently ruling at around Rs 19-20; while the more premium variety Chandramukhi Potato is fetching close to Rs 24-25 (Rs 18-20 ). The wholesale price of the tuber (average Jyoti variety) is ruling at around Rs 1,400 a quintal. The State produced nearly 95 lakh tonne of Potato this year, down by about 14 percent as compared with 110 lakh tonne last year. Close to 66-67 lakh tonne of potatoes have found their way into 470-odd cold storages across the State.

Goan agriculture department is ready with new variety of Paddy for trial this kharif season. Seeds of the Goa Dhan varieties of Paddy will be distributed among farmers this monsoon besides the annual drill of giving out vegetable and Pulses seeds. In April last year ICAR-Central Coastal Agricultural Research Institute (CCARI) had developed salt-tolerant Rice varieties Goa Dhan I and Goa Dhan II. The agriculture department will be giving out 300 to 350 tonnes of Paddy seeds to farmers for the kharif season. Roughly, 1.7 lakh tonnes of paddy are harvested in Goa per year.

Global Cotton consumption is forecast at a record level of just over 125 million bales. If realized, this would be the seventh consecutive year of growth as global textile consumption continues to recovery from recessionary contractions. In China, Cotton consumption is forecast to expand 4% and reach 41.5 million bales in 2018-19, the largest since 2010- 11, as investment in the textile industry continues and mills have access to local supplies from the national reserve. China’s mill use in 2018-19 may be further supported by a slower pace of yarn imports compared with recent years.

Economic News

India is the second largest textile manufacturing and exporting country in the world next only to China has been facing challenges on the logistics cost front, especially transport of cotton from cotton growing states to cotton consuming states. The steep increase in diesel price has increased the lorry transportation cost. Though India is the largest cotton producing country and net exporter of cotton in the world, the domestic cotton textile industry could not derive competitive advantage due to the steep increase in cotton transportation cost. At the same time, countries like China and Vietnam could transport the cotton at a much cheaper cost in the international cotton trade. During the peak cotton season the lorry freight per bale between Gujarat ginning factory (the largest cotton producing state in the country) and spinning mills in Tamil Nadu (that account 47% of the spinning capacity in the country and producing less than 5% of its annual cotton requirement) was ruling upto Rs.1,000 per bale.

India on Wednesday raised the import duty from 20% to 30% on wheat with immediate effect. This is to protect domestic growers from sourcing cheaper produce from overseas markets. The move comes at a time when wheat procurement in the domestic market by the government and private agencies is at peak. This measure is expected to help stem imports of wheat from Ukraine, Russia and Australia. As per the government’s third advance estimate, the country is set to produce a record 98.61 million tonnes of wheat in 2017-18 crop year. Cheap imports in this scenario could hit Indian farmers hard. In 2017-18, India imported 1.48 million tonnes of wheat compared with 5.75 million tonnes of wheat in 2016-17. Traders said no imports have taken place since April this year, but the industry is following a wait-and-watch policy.

Trading Recommendations

SELL CORIANDER MAY BELOW 4580 TARGET 4550/4510/4460 SL 4630
BUY TURMERIC MAY ABOVE 7200 TARGET 7230/7270/7320 SL 7150
BUY TURMERIC MAY ABOVE 7200 TARGET 7230/7270/7320 SL 7150

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