Epic Research Daily Agri Commodity Report Of 5 June 2018

Exports of Rice, the largest commodity in India's agri basket, rose 12% in volumes to 9.89 lakh tonnes in April on good demand for the nonbasmati Rice, according to the provisional statement from the Agricultural and Processed Foods Export Development Authority (APEDA). The country exported 619665 tonnes of non-basmati Rice worth $262 million in April, rose 25.5% as compared to 493441 tonnes ($199 million) in the same month last year. Exports of basmati Rice totalled 370183 tonnes in April, down nearly 5% as compared to 389542 tonnes in the same month last year. Though, the revenue from basmati Rice exports rose 9.3% year-onyear to $410 million during the month, according to APEDA data.

World Cotton consumption is estimated to rise to 26.7 million tonnes in 2018/19, while world Cotton production is estimated at 25.7 million tonnes, the International Cotton Advisory Committee (ICAC) said in its latest report. Production in China is projected to decrease to 5.6 million tonnes in 2018/19 based on reduced planting area, while consumption is forecasted to increase to 8.4 million tonnes. US production is projected to decrease to 4.2 million tonnes with exports projected to increase 3% to 3.3 million tonnes in 2018/19. Reduced yields in 2017/18 in India are contributing to lowered planted area for 2018/19 with exports projected at 840,000 tonnes representing a 24% decrease from the previous season. Production in Brazil for the 2017/18 season is estimated to be 1.9 million tonnes, a 26% increase from 2016/17, with 900,000 tonnes projected for export.

India has made unmatched progress in Coconut cultivation in the last four years and now it has become the leading country in coconut production and productivity. Productivity increased to 11516 fruits per hectare in 2017-18 as compared to 10122 in 2013-14. Between 2014 and 2018, 13,117 hectare was brought under new plantation as compared to 9,561 hectare during 2010-2014.

Economic News

Tea industry in West Bengal is heading towards major uncertainty as over 7 lakh tea workers plan to launch an aggressive protest, including calls for an idefinite strike, demanding an immediate resolution of unsettled wages by June 25. Despite numerous meetings, seminars and symposiums, negotiation have failed to come up with an amicable solution for the prolonged dispute over wages since the past four years. “Now pushed to the brink, we will give ultimatum to the government on June 9 and look for alternative steps from June 14. If positive outcome does not come by the 25th, we will go forward with an aggressive movement. It may also include the calling of an indefinite strike, if needed,” said Saman Pathak Centre of Indian Trade Unions, West Bengal state Working Committee member and a major functionary in the movement.

With the global trends in sugar prices being subdued, the Government’s announcement of 2 million MT of sugar exports under the Minimum Indicative Export Quota (MIEQ) scheme in March 2018 is yet to commence fully. Subsequent announcement of production subsidy of Rs 55/MT announced in May 2018 too has not resulted in raising sugar exports. As per an ICRA note, the oversupply scenario therefore continues to prevail in the domestic market, resulting in sugar prices touching a low of Rs. 27,500/MT in may.Sabyasachi Majumdar, Senior Vice President & Group Head, ICRA Ratings, “Domestic sugar production for SY2018 is set to cross 31 million MT from 20.3 million MT in the previous year. This has been driven principally by a recovery in production in Maharashtra, North Karnataka and Uttar Pradesh (UP). We expect domestic sugar consumption to increase to around 25.0 million MT in SY2018 from 24.5 million MT in SY2017. As per our estimates, even after meeting the target of exporting 2 million MT, the domestic market would still have around 2.5 – 3.0 million MT of excess sugar stocks than the normative stock for the next season.

Trading Recommendations

SELL CORIANDER JUN BELOW 4188 TARGET 41668/4148/4128 SL 4202
SELL TURMERIC JUN BELOW 7000 TARGET 6980/6960/6940 SL 7020
SELL GUARGUM5 JUN BELOW 7350 TARGET 7330/7310/7290 SL 7370

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