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).