Commodity spikes

Fresh arrivals in the domestic market accompanied with reduced demand from the export market, mainly from Bangladesh, is expected to dampen the chilli futures market. The market is reeling under pressure and rates have fallen within the last fortnight by Rs 350-400 a quintal from Rs 4,700 a quintal levels. Last week saw the prices fluctuating between Rs 4,280 and Rs 4,350 a quintal. Reports suggest that arrivals from Madhya Pradesh and Andhra Pradesh have begun. Around 40,000 bags (of a quintal each) is arriving at Guntur, the delivery centre. According to commodity analysts, next week may not see demand from Bangladesh as it is the end of Ramzan. "This will keep the sentiments weak," they added. For the November contract, they put the upper resistance at Rs 4,232 a quintal and support level at Rs 4,100. Once the support level is breached, they said, the market may slip all the way to Rs 3,800 a quintal. On Saturday, the November contract closed at Rs 4,163 a quintal on the Ncdex. The country is expecting around 2.8 crore bags this year against the output of 2.3 crore bags last year, up 22 per cent.

Guarseed volatile

Guarseed, one of the most speculative agri-commodities, witnessed rangebound volatility in the futures market. However, the market closed on almost the same level as previous week's. Commodity experts said that as arrivals are in the initial stage, stockists have not yet ventured into the market. Another factor stopping them is the inferior quality of the stock. Mostly the stocks are being processed into guargum. Arrivals have been reported in Sriganganagar and Hanumangarh districts of Rajasthan. However, sources said that next few trading sessions could see the upward rally coming back as quality improves and stockists foray into the market. According to market estimates, the country is expecting an output of around 70 lakh bags, almost equivalent to last year's figures. Another spell of shower is required by the month-end for a better output. November futures for guarseed is having a good support at Rs 1,654 a quintal. This year, so far, the market had dipped to as low as Rs 1,595 a quintal. The November contract on the Ncdex closed on Saturday at Rs 1,675 a quintal, down Rs 12 against the previous close but up Rs 2 a quintal compared to the previous week's close.