Spices move up

SPICES, except pepper, witnessed good upside on the commodity exchanges through out this week. Jeera, turmeric and chilli moved up due to some demand in the spot market and late sowing in the case of jeera that led to short covering.

Jeera November contract on NCDEX moved up by 4.55% since last week closing at Rs 11,465 per quintal due to delayed sowing reports though demand was weak. Approximately 75% of jeera sowing is normally completed before diwali in Gujarat but due to low moisture content of the soil it has been delayed. According to Alimuhammad Lakdawala of Anand Rathi Commodities going forward there can be some upside but the gains will be capped due to slack demand.

Turmeric also moved by over 4% since last week and the December contract on NCDEX closed at Rs 3,665 per quintal after making a high of Rs 3,689. This was due to short covering as there was some buying in the spot markets where prices moved up by 3% closing at Rs 3,705. Some orders were also registered from the overseas markets. There has been reports of buying by stockists from the North India. According to a report by Angel Commodities, stocks with the stockists in the local market are low due to low production this year. This will support the prices once the demand from overseas market is placed in good quantity. “If prices trade above Rs 3,660 per quintal they may touch Rs 3,800 levels in the coming weeks,” says the report.

In chilli the December contract closed up 2.47% at Rs 5,343 per quintal after making a high of Rs 5,401. The futures market is at a discount to the spot market and the prices were up due to short covering and low stocks at the exchange warehouses. In spot market chilli closed marginally up at Rs 5,532 per quintal at the Guntur market. Faiyaz Hudani from Kotak Commodities said that volumes in chilli are very low and prices will be range bound having a resistance at levels of Rs 5,350-Rs 5,400 per quintal.

Pepper prices traded weak closing down 2.28% at Rs 11,336 per quintal since previous week due to sell-off, short covering and limited trade in the spot market. Buyers have sidelined themselves looking at the volatility in the futures market.