Increasing Exports Production Cheer Sector

There is some joyfulness in the cuppa as the Indian tea industry is on a comeback mode with output and exports increasing despite competition from several countries such as Vietnam and Bangladesh. Data obtainable from the Tea Board show that exports increased by about 18 million kg (mkg) to 124.04 mkg till August this year, compared with the corresponding period last year. Overseas demand is on the increase and prices are firming up owing to good quality teas, besides shortage of teas in the world market. Pakistan, Egypt, Iran and Iraq and West Asian countries take up the permanent slot in the export list. On the output front, the country produced 123.1 mkg during August 2008 as against 116.3 mkg during the corresponding period last year.

For the January-August 2008 period, output has been pegged at 599.7 mkg tea against last year's 576.1 mkg. During August this year, south Indian production declined to 14.1 mkg (15.6 mkg), while north Indian production rose to 109 mkg (100.7 mkg). However, the period from January to August this year witnessed south Indian production increase to 155.1 mkg (140.7 mkg) while north Indian production was at 444.6 mkg (435.4 mkg).

Coonoor Tea Association Volumes Remain High

Volume offered for sale at the Coonoor Tea Trade Association (CTTA) auctions remains to be high with the catalogues of brokers adding to 13.07 lakh kg for Sale No: 42 to be conducted on Oct 16 and Oct 17. The balance includes teas remaining unsold in previous auctions. Of the 13.07 lakh kg on offer, 9.12 lakh kg belong to the leaf grades and 3.95 lakh kg belong to dust grades. The proportion of orthodox teas remains to be low in both the leaf and dust grades.

Rubber Sees Better Trend

Domestic rubber displayed a better trend on Oct 14. Sheet rubber RSS 4 increased to Rs 86 from Rs 81 a kg on Oct 13. Rubber prices have plumped to much lower levels. Spot prices were (Rs/kg): RSS-4: 86 (81); RSS-5: 82 (79); ungraded: 78 (74); ISNR 20: 81 (78) and latex 60 per cent: 70 (70).

Chilli Futures Touches Upper Circuit

Chilli futures remained to gain strength touching the upper circuit for the second consecutive day. Strong demand in the Guntur spot market on Oct 14 pushed up chilli futures by 3 per cent to Rs 5,673 a quintal. Maize touched the upper circuit of 2.98 per cent at Rs 846 a quintal on good purchasing interest at lower levels besides rise in spot prices amidst thin arrivals.

Turmeric increased 1.98 per cent to Rs 3,562 a quintal on the back of short covering after recent down side movement. Soybean increased 1.06 per cent to Rs 1,667 a quintal on short covering. Jeera and pepper declined slightly by 0.21 per cent and 0.17 per cent to Rs 10,251 a quintal and Rs 12,940 a quintal. On MCX, mentha oil and crude palm oil increased 2.57 per cent and 0.58 per cent to Rs 554 a kg and Rs 311/10 kg, respectively. Cardamom declined 1.06 per cent to Rs 653 a kg on sluggish demand for the produce.

Rubber Rates Remained To Rule Weak

Rubber rates remained to rule weak on Oct 13. RSS 4 declined to Rs 81 from Rs 83 a kg on purchaser resistance. The domestic market seemed blind folded as the trend setting Tokyo Commodity Exchange (TOCOM) remained ended on account of Health and Sports Day.

The falling trends in oil prices triggered by global recession and declining international markets contributed the steep decline from Rs 142 a kg to Rs 81. Meanwhile in the international front, RSS 3 (spot) plunged to Rs 97.10 from Rs 103.59 a kg at Bangkok. Spot rates were (Rs/kg): RSS-4: 81 (83); RSS-5: 79 (80); ungraded: 74 (75); ISNR 20: 78 (79) and latex 60 per cent: 70 (70).

Strong Fundamentals Shore Up Pepper Futures

The agitation in the capital markets all over the world failed to pressure the pepper futures market because of strong fundamentals of pepper like gold. The market increased on Oct 10. October contract increased by Rs 231 a quintal to Rs 12,935. November an December increased by Rs 171 and Rs 141 respectively to Rs 13,000 and Rs 13,170 a quintal. Total turnover on NCDEX increased by 969 tonnes to 7,440 tonnes. Net open position for October declined by 574 tonnes to 4,778 tonnes. November and December positions increased by 133 tonnes and 442 tonnes to 7,458 tonnes and 3,903 tonnes respectively. The investors who were purchasing spot and selling futures earlier are now on the reverse mode liquidating spot and buying futures.

The purchasers said to have adopted a wait and watch approach anticipating that the prices will decline following the stock market crash world over. Indian parity on Oct 11 was at $2,975-3,000 a tonne (c&f) for Europe and $3,100 a tonne (c&f) for the US. Sharp decline in the value of rupee against the dollar has made imports of pepper costly.

Coonoor Auction Sees Quality Teas Fetch Premium

Despite rates falling and teas getting withdrawn from Sale No. 40 of the Coonoor Tea Trade Association (CTTA) auction last weekend, quality invoices got premium prices, an analysis of the buying pattern reveals. The Quotations held by brokers shows bids ranging from Rs 68-73 a kg for plain leaf grades and Rs 90-96 for the brighter liquoring sorts. They ranged Rs 73-76 a kg for plain dust grades and Rs 100-118 for brighter liquoring sorts. As many as 25 marks of CTC teas of bought-leaf factories remained in Rs 100 price-band.

Basmati Rates Rule Lower, Seen Declining More

Farmers who had excitedly planted and extended acreages under basmati rice this year have to patch up themselves to lower realisations. Prices of Pusa Basmati-1 paddy the harvesting of which just about has began are currently averaging around Rs 1,800 a quintal in most mandis of North India. There is a similar fall being reported in other aromatic long-grain varieties not technically basmati, such as Sharbati and Sugandha.

According to a field survey-cum-satellite data-based study done for the Agricultural Products Export Development Authority (APEDA), nearly 9.51 lakh hectares (lh) area has sown under basmati this year, which comprises 3.16 lh under traditional cultivars, 5.55 lh under Pusa Basmati-1 and 0.80 lh under Super.

India Is Likely To Produce Million Tones

India is likely to produce 2.8 million tones(MT) extra grain in 2008-09 provided farmers increase the area by a million hectare. India has harvested a record 78.4 million tones (MT) wheat last year. The average wheat productivity at national level is about 2.8 tonnes per hectare as per the fourth advance estimates for 2007-08.Last week, the Agriculture Secretary had said the government targets to increase the wheat acreage by one million hectares in 2008-09. The government has set a wheat production target at 78.5 MT, up by 100,000 tonnes from the previous year.

Spot Rubber Prices Declined Deep

Spot rubber prices declined deep in to the minus territory on Oct 3. Sheet rubber RSS 4 fell to Rs 106 from Rs 112 a kg on Oct 1. The grade fell to Rs 120.05 (124.71) a kg at Bangkok.Spot rates were (Rs/kg): RSS-4: 106 (112); RSS-5: 104.50 (110); ungraded: 100 (105); ISNR 20: 102.50 (109) and latex 60 per cent: 76 (76).

Tea Trader Demand On Extension

The Tamil Nadu Minister for Commercial Taxes, Mr S.N.M. Ubayadullah, assured the members of the tea trade that the Government will examine the sector's demand on extension of one per cent VAT levied at first point of sale to all teas sold in the auctions. No auction centre in the country except Tamil Nadu levied tax on sale of teas meant for exports and that such levy made exports uncompetitive. Further, the one per cent VAT levied at the first point of sale was constrained only for teas sold in auction and direct first sale by the bought leaf factories and Indcoserve, leaving the estate tea factories and TANTEA outside the ambit of such cover.

Yet the offer volumes during the first seven months of 2008 at Coimbatore auction centre went up by 23 per cent to 17.08 million kg against 13.87 million kg during the corresponding months of the previous year.

Soyabean Processors Association Of India

Soyabean output is headed for a record 108.17 lakh tonnes (lt) this year against 94.75 lt last year, according to the Soyabean Processors Association of India (SOPA) projections. SOPA's projections are based on 8 per cent increase in the area under soyabean. The total area under soyabean in all States has been pegged at 96.24 lakh hectare (lh) till September 24 compared with 88.49 lh last year.

The acreage in Madhya Pradesh, which accounts for over half of the total soyabean crop in the country, was at 51.43 lh with output being estimated at 57.75 lt against 48.79 lh amd 49.8 lt production, with increase in area witnessed in Ujjain, Indore, Bhopal, Guna, Shivpuri and Ashoknagar districts. The acreage in Maharashtra, No. 2 soyabean producing State, has reached 30.68 lh and output is seen at 36.47 lt, against 32.37 lt grown on 26.51lh last year.

Sharp Falls In Global Futures Mainly

Rubber prices plunged on Sept 30. Sharp falls in global futures mainly TOCOM kept the domestic market under pressure during the day. RSS 4 declined to Rs 112 from Rs 121 a kg as there were no purchasing orders from any leading consuming industries even at lower levels. RSS 3 spot weakened to Rs 127.05 (129.07) a kg at Bangkok. Spot rates were (Rs/kg): RSS-4: 112 (121); RSS-5: 110 (118); ungraded: 105 (114); ISNR 20: 109 (116) and latex 60 per cent: 76 (77).

Tokyo rubber closes lower

Tokyo rubber futures closed down on Monday, snapping an eight-day bull run as funds locked in profits after a rise of more than 1 per cent in early trade to a one-month high on strong oil prices. ''Follow-through buying emerged in early trade, but profit-taking pushed down prices from the high after sharp gains in the last week,'' said Mr Shuji Sugata, a manager at Mitsubishi Corp Futures and Securities Ltd. The key Tokyo Commodity Exchange rubber contract for February delivery finished at ¥318.2 a kg, down ¥2.5 or 0.8 per cent. The February contract rose as high as ¥324.9 per kg - the highest for a benchmark contract since Aug. 1.

Rubber Sees Steady Trend

The domestic rubber prices were firm on Sept 11. Traders remained to sideline the market and the inflow of the raw material hit the bottom lines. RSS 4 ended flat at Rs 141 a kg as on Sept 10. According to observers any visible change is hoped only after the Onam holidays. Meanwhile, the trend-setting Japanese rubber futures ended in red reporting slightly losses as it recovered partially on late trading followed by short covering at lower levels. Its spot closed at Rs 133.77 (133.18) a kg at Bangkok. Spot prices were (Rs/kg): RSS-4: 141 (141); RSS-5: 138 (138); ungraded: 136 (136); ISNR 20: 130 (130) and latex 60 per cent: 81 (81)

Coonoor Tea Sales Turnover Increases Rs 97cr

Producers who sold their teas via the 35 sales held in the eight months of 2008 at the auctions of Coonoor Tea Trade Association (CTTA) have earned Rs 97.28 crore more than in the same period of 2007. In all, 3.43 crore kgs were sold against 2.34 crore kgs. On an average, every kg got Rs 14 more to increase to Rs 59.24. This marked an increase of Rs 97.28 crore or 92 per cent. Earnings rose for both the orthodox and CTC teas. Of the 3.43 crore kgs, CTC teas calculated for 3.20 crore kgs. Prices increased to an average of Rs 59.03 a kg from Rs 44.24. The volume of orthodox teas totalled 2.27 million kgs against 1.98 million kgs last year

Pepper Futures Down On Fall In Other Origin Rates

Pepper futures market continued its downward trend on Sept 10 also on pessimistic activities and on reports of prices easing in other origins-Vietnam and Brazil. October and November declined by Rs 139 and Rs 155 a quintal to Rs 12,775 and Rs 13,001 respectively on NCDEX. All the three contracts declined to below the spot price of Rs 13,400 a quintal for MG 1. The fall in other contracts was from Rs 42 to Rs 337 a quintal.

Banks are closed for two days on Sept 11 and Sept 12 on account of Onam and it is also affecting the trade. Total volume increased by 3,585 tonnes to 11,354 tonnes, while total open interest dropped by 410 tonnes to 19,128 tonnes. Open interest for September declined by 868 tonnes, while October and November moved up by 252 tonnes and 229 tonnes. Spot rates ruled firm at prices of Rs 12,800 (un-garbled) and Rs 13,400 (MG 1) a quintal

Rubber Rates Unaltered

Rubber prices ended unchanged on Sept 10. RSS 4 closed flat at Rs 141 a kg amidst thin volumes. About 50,000 tonnes of rubber now available with the growers in the State are under various stages of processing. Since the rain continues the sheets cannot be sun dried. Spot rates were (Rs/kg): RSS-4: 141 (141); RSS-5: 138 (138); ungraded: 136 (136); ISNR 20: 130 (130) and latex 60 per cent: 81 (81)

Rubber Sees Steady Trend

Physical rubber prices ended almost firm on Sept 9. Supply concerns continued to disrupt the trading activities in the main marketing centres but major grades remained flat on strong purchasers resistance. Sheet rubber RSS 4 closed unchanged at Rs 141 a kg as on Sept 8. On the domestic front, the trend was mixed as ungraded rubber and latex improved by 50 paise on scattered transactions. RSS 3 (spot) increased to Rs 133.18 (132.15) a kg at Bangkok. Spot prices were (Rs/kg): RSS-4: 141 (141); RSS-5: 138 (138); ungraded: 136 (135.50); ISNR 20: 130 (130) and Latex 60 per cent: 81 ( 80.50)

Rubber Price Increases

Physical rubber prices increased on Sept 6. Supply worries remained to put pressure on the purchasers while RSS 4 firmed up to Rs 140.50 from Rs 140 a kg on Sept 5. In the domestic market, sheet rubber RSS 4 lost 50 paise per kg during the week. The trading volumes were low. Spot rates were (Rs/kg): RSS-4: 140.50 (140); RSS-5: 136.50 (136); ungraded: 134 (133); ISNR 20: 130 (130) and latex 60 per cent: 80.50 (80.50)

Pepper Futures Market Decline

Bear operators downed the pepper futures market on Sept 5. September contract on NCDEX declined by Rs 356 a quintal to Rs 13,585, which is Rs 415 below the spot price for MG 1 of Rs 14,000 a quintal. Even October contract declined below the spot price by Rs 336 a quintal to Rs 13,880. November contact fell by Rs 314 to Rs 14,130. On NMCE, September contract fell by Rs 421 a quintal to Rs 13,617. The decline in other contracts was from Rs 308 to Rs 365 a quintal. Total turnover on NCDEX fell by 4,876 tonnes to 7,965 tonnes, while total open interest increased by 248 tonnes to 20,319 tonnes.

Rubber Sees Steady Trend

Spot rubber prices remained to rule unchanged on Sept 5. Major manufacturers were purchasers on the grade up to the quoted levels and sheet rubber RSS 4 ended flat at Rs 140 a kg as on Sept 4. The grade (spot) increased slightly to Rs 132.97 from Rs.132.32 a kg at Bangkok. Spot prices were (Rs/kg): RSS-4: 140 (140); RSS-5: 136 (136); ungraded: 133 (133); ISNR 20: 130 (130) and latex 60 per cent: 80.50 (80.50).

Tea Rates Increase In World Sales

Teas sold via all auction centres across the globe, except Malawi's Limbe, have got higher prices in the first half of calendar 2008 over the corresponding period of 2007, an analysis of Market Reports and information available with Tea Board reveals. Indonesian teas at Jakarta sales got the highest increase of 44.12 per cent to average $1.47 a kg. Kenyan teas at Mombassa auctions registered the next highest increase of 35.58 per cent, to rule at $2.21 a k g. Sri Lankan teas at Colombo auctions increased 32.46 per cent to average $3.02. Bangladesh teas at Chittagong auctions got 28.70 per cent more to rule $1.48. Indian teas at the eight auction centres registered an increase of 19.21 per cent to rule $1.80.

Spot rubber rules unchanged

Spot rubber prices continued to rule unchanged on Friday. The transactions were in a low key as there was no improvement in arrivals as yet. Major manufacturers were buyers on the grade up to the quoted levels and sheet rubber RSS 4 finished flat at Rs 140 a kg as on Thursday.

The trading community seemed to be bit disappointed since there were no signs of improvement in the domestic supply as expected before Onam. With only a few more days for the most celebrated festival of the State, the decline in business volumes is a matter of concern for the dealers as a whole, according to a spokesperson. It is really surprising to see that even the village markets are suffering from acute shortage of the raw material, he added.

Futures decline

In international futures, RSS 3 declined at its September contract to ¥333.6 (Rs 140.17) from ¥340.7, October to ¥323.6 (330.4), November to ¥320 (327), December to ¥313 (320.3), January to ¥310 (317.1) and February to ¥308.6 (316.5) a kg at TOCOM. The grade (spot) improved marginally to Rs 132.97 from Rs.132.32 a kg at Bangkok. Spot prices were (Rs/kg): RSS-4: 140 (140); RSS-5: 136 (136); ungraded: 133 (133); ISNR 20: 130 (130) and latex 60 per cent: 80.50 (80.50).

Tokyo rubber gains 2.7%

Tokyo rubber futures jumped 2.7 per cent to end at the day's high on Thursday in a rally towards the close, aided by gains in other commodities futures as dealers rushed to unwind short positions. The key TOCOM rubber contract for February delivery closed at ¥316.5 per kg, up ¥8.3 from Wednesday, after reversing an early fall to a one-week low of ¥306.4. On Monday the contract hit a one-month high of ¥324.9.

Falling rubber inventories in Japan mean that the TOCOM market remains in backwardation. Nearby September closed Thursday up 4.7 yen at ¥340.7. In the physical sector, steady buying from Japan's Bridgestone Corp was recently detected, dealers said.

Spot rubber rules steady

Rubber market ruled steady on Thursday. The trading activities were mostly neutral lacking active participants either side to set a specific trend. RSS 4 closed unchanged at Rs 140 a kg consecutively for the third day on buyer resistance. The transactions were low. Major manufacturers were buyers on sheet rubber up to Rs 140 a kg but they were unwilling to enhance their quotes further though the leading global indices finished higher on late trading.

According to observers, the domestic traders were expecting an improvement in arrivals followed by favourable weather conditions. Most of them seemed to be reluctant to enhance their commitments above the prevailing levels which in fact is very close to the all time high of Indian rubber.

Futures improve

RSS 3 improved further at its September contract to ¥340.7 (Rs 139.29) from ¥336, October to ¥330.4 (324.5), November to ¥327 (319.5), December to ¥320.3 (313), January to ¥317.1 (309.7) and February to ¥316.5 (308.2) a kg at TOCOM. The grade's spot closed firm at Rs 132.32 (132.17) a kg at Bangkok. Spot prices were (Rs/kg): RSS-4: 140 (140); RSS-5: 136 (136); ungraded: 133 (133); ISNR 20: 130 (130) and latex 60 per cent: 80.50 (80.50).

Tokyo rubber falls 3.5%

Tokyo rubber futures fell 3.5 per cent on Tuesday as a steep fall in oil prices encouraged investors to flee from commodities, including rubber, dragging down the benchmark contract to its lowest level in a week. The key Tokyo Commodity Exchange rubber contract for February delivery closed at ¥307.1 per kg, down ¥11.1 from Monday's close. It earlier hit an intraday low of ¥307 {ndash} the lowest since Aug. 25.

The key TOCOM rubber contract ended an eight-day winning streak on Monday, when it succumbed to pressure after hitting a one-month high of ¥324.9. "Oil prices are the key factor triggering selling in rubber. The fall is very quick after rising near ¥325 on Monday,'' said Mr Takashi Ogura, manager at Kanetsu Asset Management. Asian physical rubber prices edged down following sharp falls in futures prices, but physical prices limited their falls due to rain in Thailand and Malaysia in recent days.

Move to resume rubber futures disappoints traders

The Forward Market Commission's reported move to resume futures trading in rubber after its unilateral suspension has left the trade circles worried as they feel resumption without imposing any restriction to control excessive volatility by speculators will harm the sector.

"The growers were getting average annual prices much below international prices during the tenure of futures trade. Prior to the introduction of futures and after the suspension of futures, the growers were getting comparatively higher prices. The FMC's contention is that if the industry does not need futures, then it should be advantageous to growers," said Mr N. Radhakrishnan, President, Cochin Rubber Merchants Association. The industry consumed over 39 lakh tonnes of rubber in the past five years, whereas the physical delivery effected in futures was to the tune of 75,000 tones during the period. Margin of profit

"A vast majority of rubber dealers are also rubber growers. For the past six decades, they were ensuring timely supplies to the consuming industries keeping a meagre margin for themselves. In the process, the growers have been getting over 97 per cent of the terminal market prices for sheet rubber at their farm gate. The growers in other countries fetched a farm gate price which was 75-85 per cent of the terminal market price," he added. The margin of profit of each spot dealer ranges from 0.5-1 per cent. In this scenario it is not possible for a spot trader to co-exist with the speculators.

Spot rubber turns weak

Physical rubber prices turned weak on Tuesday. RSS 4 moved down to Rs 140 from Rs 141 a kg on buyer resistance. The volumes continued to be low as there were no quantity sellers or buyers in the main marketing centres. According to market circles, major manufacturers were active on sheet rubber at the quoted levels. Meanwhile, sharp declines in Japanese rubber futures followed by heavy long liquidation kept the domestic prices under pressure during the session.

Futures slip

Most of the players seemed to be expecting an improvement in arrivals towards mid September. RSS 3 declined sharply at its September contract to ¥334.8 (Rs 136.71) from ¥343.5, October to ¥323.8 (334.7), November to ¥318.1 (330.1), December to ¥312.4 (322.9), January to ¥307.5 (319) and February to ¥307.1 (318.2) a kg at TOCOM. RSS 3 spot improved further to Rs 132.79 (131.81) a kg at Bangkok. Spot prices were (Rs/kg): RSS-4: 140 (141); RSS-5: 136.50 (138); ungraded: 132.50 (133); ISNR 20: 130 (132) and latex 60 per cent: 80.50 (81.50).