Epic Research Daily Agri Commodity Report Of 1 June 2018

Indonesia's exports of Palm Oil and Palm Kernel Oil, excluding lauric oil, olechemical and biodiesel, dropped 13.6% to 2.22 million tonnes in April from a year earlier, the Indonesian Palm Oil Association (GAPKI) said. Including lauric oil, olechemical and biodiesel, April's exports stood at 2.39 million tonnes. "This is an unusual phenomenon, because usually prior to Ramadan, palm oil demand from India increases, but not in this year," GAPKI said in a statement, pointing to higher import duty in India.

India likely to witness another bumper Sugarcane production in the coming season going by the increase in Sugarcane acreage during the current kharif. As per the sowing data released by the Agriculture Ministry last week, as on May 24 Sugarcane is planted around 48.7 lakh hectares (lh) across the country as against 47.88 lh in the corresponding week last year. As of now, the planting is completed in 97 per cent of the normal area. While sowing alone is not an indication of what the output would be, yet another bumper cane production may put the sugar industry, already reeling under low sugar prices under further strain.

As Maharashtra marketing department was under pressure to tackle the Tur crisis, due to which the state government has cleared a proposal on the sale of pulses procured in 2016-17 under the market intervention scheme. National Agriculture Cooperative Marketing Federation (NAFED) has stopped procurement of Tur in the state from May 15. The crisis put even more pressure on the state government to procure Tur from farmers. The state government procured a bumper Tur in 2016-17. Almost 10 lakh quintals of Tur was procured last year and Maharashtra produced the highest ever tur that year. So, the state’s godowns were already full with Tur. Hence, the state marketing department was facing a problem in procuring new Tur.

Economic News

The government is considering creating a three million tonne sugar buffer stock to help millers clear about Rs 22,000 crore dues to cane growers, Food Minister Ram Vilas Paswan said today. Sugar mills' financial health has worsened due to sharp fall in prices of the sweetener in the wake of a record production of 31.6 million tonne (MT) so far in the 2017-18 season (OctoberSeptember). "We are still considering a proposal to create a buffer stock of 3 million tonne. We are taking views from other departments," Paswan told reporters. A draft cabinet note on the proposal has been moved for interministerial consultation after NCP chief and former agriculture minister Sharad Pawar shot off a letter to Prime Minister Narendra Modi seeking urgent intervention to deal with huge sugar glut in the market. Besides setting up of the buffer stock, the food ministry in the draft cabinet note has proposed fixing minimum ex-mill sale price at around Rs 30 per kg, reintroducing the monthly release mechanism and imposing stock limits on mills by fixing quota for each mill, sources said.

Technically Cotton market is under long liquidation as market has witnessed drop in open interest by 5.98% to settled at 7643 while prices down 190 rupees. Now MCX Cotton is getting support at 21770 and below same could see a test of 21370 level, And resistance is now likely to be seen at 22600, a move above could see prices testing 23030. Cotton on MCX settled down by -0.85% at 22170 on profit booking after prices rose tracking firm physical demand amid improving exports. Till last week, India kharif cotton acreage is 782,000 ha vs 11.2 lakh ha yr ago. India's cotton exports are seen rising around 21% on year to 75 lakh bales (1 bale = 170 kg), backed by depreciation in the rupee and higher international prices of the commodity. According to data from the farm ministry, country had sown cotton across 781,600 ha as on last week for the kharif season, down 30.5% on year.

Trading Recommendations

SELL CORIANDER MAY BELOW 4280 TARGET 4250/4210/4160 SL 4330
BUY TURMERIC MAY ABOVE 7140 TARGET 7170/7210/7260 SL 7090
SELL GUARGUM5 MAY BELOW 7470 TARGET 7440/7400/7350 SL 7520

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