SPICES
Spices counter witness a mix trend during the previous month. Markets opened on a weaker note on the back of weak demand prevailing in the spot front and weak overseas demand but nearing the month end prices showed a good bounce back as monsoon got delayed.

Jeera
Jeera prices slumped initially during the start of the month primarily on the back of weak demand prevailing in the spot front, weak export demand and taking cues from international markets (Syria & Turkey) as clear weather increased the countries crop prospects. Harvest in Syria started in June and due to good weather conditions crop prospects is expected to be excellent compared to last year. And in month of July Turkey crop will be harvested and even that it is expected to be on a higher side as compared to last year. With good crop prospects in both Syria & Turkey will definitely result in weak exports demand from India. And this was evident in the export numbers for the period April-May'09 wherein jeera exports was reported to be at 9,750tones from 11,185tones during the previous year. Furthermore, even domestic demand was reported to weak and this pressurized the prices. However, nearing month end rains were reported to be delayed and for that reason good upside was witness in agri commodity prices and this landed support to jeera prices.

Turmeric
Turmeric prices were pressurized initially due to weak demand in domestic markets and expectation of early arrival of monsoon. But later on rose sharply as rains were delayed and lower stocks in physical markets. Furthermore, prices were also supported on the back of export demand during the period April-May'09. During the period mentioned, turmeric exports were reported to be at 10,500tones from 9,010tones. Hence, on the back of good export numbers and delayed monsoon lead to upsurge in turmeric prices. 

Chilli
Even Chilli prices showed weaker trend on the back of rise in arrivals and weak demand. Domestic demand was reported to be limited and for that reason prices were pressurized as arrival kept mounting on daily basis. Furthermore, as we had mentioned last month, crop prospects in international market was reported to be better and this would result in lower international demand coming to India. This was evident in the export numbers during April-May 2009 was reported to be at 26,000tones as against 50,275tones. The decline in export of Chilli is mainly due to the absence of Pakistan from the market. Last year they had imported 20,000tones of Chilli during April-May 2008.But nearing month end prices got supported on the back of weak monsoon prospects.

Pepper
And in case of Pepper prices witnessed weakness, but downslide was limited compared to other spices counter. This was primarily on the back of prevailing tight supply situation in the spot front and taking cues from international markets (Vietnam). The major supporting factor for the prices was limited availability in physical markets as traders did not want to part with their stocks on expectation of higher prices. Other major factor supporting the price was limited selling by Vietnamese farmers. In Vietnam limited selling was witnessed for pepper as farmers wanted to sell their coffee stocks before Indonesian coffee crop hits the markets. As a result coffee prices touched near three year's low. Prices fell from 26000DONG to 22000DONG at present. Whereas, in cse of pepper prices rose to 36.6000DONG from 32,000DONG on the back of limited selling and good export demand due to tight situation. Even Malaysian pepper prices showed upsurge from 7,600MR to 8,100MR on the back of tight situation in global market. Taking cues from the same Indian pepper prices showed upside along with delayed monsoon which can impact flowering of new crop.

For the coming month Jeera prices is expected to trade on a weaker note on the back of better crop prospects from Syria & Turkey which will result in weak export demand from India. And this we have elaborated in our long-term report "Cuminseed in Perspective2009". Pepper prices expected to trade on a range bound mode due to limited supply and international markets especially Vietnam and Malaysia has been supportive due to limited selling. But Indian prices could be pressurized if there is influx of pepper from other origins (Indonesia, Vietnam and Sri Lanka). In case of Turmeric prices can get some support due to tight supply situation in the spot front, but if monsoon getting back to normalcy than prices can be pressurized. And in case of Chilli prices will show weakness on the back of weak domestic as well as export demand.

Alimuhammad Lakdawala
Analyst
AnandRathi Commodities
Contact No:+919820566627