Agri-commodities futures dip on high crop output

Agri-commodities futures are passing through a bearish phase. The trading sessions in the last fortnight have seen commodity rates dipping in the range of 3 to 15 per cent due to an estimated higher crop output and lacklustre demand in the physical markets across the country.

The entire spices segment is in the red. On the one hand, turmeric is the victim of higher stocks, while jeera (with lower output this year) is on the decline due to continuous dull demand.

During the period under review, turmeric near month futures fell by 9 per cent to close to Rs 2,000 a quintal from Rs 2,200. Similarly, jeera drastically fell by 14.5 per cent to Rs 10,410 a quintal from Rs 12,175 a quintal. 
 

PALL OF GLOOM Price movement on NCDEX in Rs/quintal
Commodities	Aug 11	Aug 28	% change
Maize	745	713	-4.30
Chana	2,341	2,281	-2.56
Jeera	12,175	10,410	-14.50
Mentha Oil*	543	515	-5.16
Pepper	13,240	11,680	-11.78
Turmeric	2,204	2,008	-8.90
Guarseed	1,811	1,742	-3.81
Chilli	4,484	4,611	2.83
Barley	889	923	3.82
* Rs per kg Note : September contract

Pepper has grounded to Rs 11,680 a quintal, down 12 per cent whereas chilli rose by 2.8 per cent to Rs 4,611 a quintal due to fresh demand pouring in from neighbouring countries, mainly Bangladesh and Sri Lanka. However, market sources maintained that the upward rally in chilli was short-term and its prices would soon fall.

Guarseed, a highly monsoon-sensitive crop, declined by 3.81 per cent to Rs 1,742 a quintal on the back of rains in Rajasthan. Markets of maize and mentha oil are under pressure as crop estimates are slated to be better than last year's.

Mentha oil is already around 60 per cent up on the output front. Though comparatively lesser against mentha, Maize output is expected to touch 12.5 million tonnes this kharif season, up 12 per cent.

In the pulses segment, chana, one of the few trading pulses varieties in futures market, is down by 2.56 per cent. A fortnight ago, it was trading at Rs 2,341 a quintal, which now has dropped to Rs 2,281 a quintal.

According to estimates, for 2007-08, the chana output could reach 53 lakh tonnes against 48 lakh tonnes in 2006-07. Commodity experts said that chana in the longer term too would stay bearish.