®

1st Sep 2016

Monthly Report On

SPICESSep 2016

1

®

Spot NCDEX

-9.87%

-9.34%

20.50%

-0.94%

-4.11%

-8.13%

17.52%

-3.52%

-15.00% -10.00% -5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00%

Jeera

Turmeric

Cardamom

Coriander

Monthly Price movement of Spices Aug 2016 (% Change)

FundamentalsŸ Turmeric futures (October) may witness further

downfall & test 6850, if it breaks 7170 levels. Any short covering may face resistance near 7530 levels.

Ÿ Turmeric prices are declining in Nizamabad and Sangli market due to lackluster demand and higher supply of inferior grade.

Ÿ The stockiest after recent fall in prices are liquidating their inferior grade material, while holding premium quality in the anticipation of improvement ahead

Ÿ Demand in turmeric is very poor, especially from upcountry since last few weeks has hurt prices.

Ÿ Further increased sowing with favorable weather has raised prospects of better crop this season is also weighing on prices.

Ÿ Turmeric acreage in Telangana as on 24 Aug was up 15.4% at 45,000 hectares as compared to 39,000 hectares last year. Sowing of turmeric is over in 93% of normal area and up by 110% of normal sowing area.

Ÿ At the spot markets, turmeric are trading lower in the anticipation of better climatic conditions in growing areas and decrease in physical demand from up-country buyers.

Ÿ The total production in the coming year is expected to be higher due to strong sowing of turmeric in Karnataka Sources also stated that total daily arrivals of 2000 bags are being reported in Nizamabad mandi.

Ÿ Spot turmeric prices are decreasing at Erode markets as traders are not receiving any upcountry demand. For the past fifteen days the price of the turmeric is on the decline. Because of the downtrend, the farmers are bringing very little quantity of turmeric for sale.

Ÿ The southern States like Tamil Nadu, Andhra Pradesh, and Telengana have experienced low rainfall this year, but in

MARKET MOVEMENT AHEAD

Commodity: TURMERIC (October) Range: 6850-7530

®

9 Days EMA 18 Days EMA 55 Days EMA

Source: Reuters

Maharashtra, Bengal, Assam and other places the farmers have started sowing the turmeric.

Ÿ The farmers due to poor price are bringing only medium and low quality turmeric for sale, keeping the good quality turmeric in their godowns.

Ÿ At the Erode Turmeric Merchants Association, the finger variety went for Rs.7,318-8,849 a quintal; the root variety Rs.7,129-7,469.

FundamentalsŸ Jeera futures (October) is likely to witness a

consolidation in the range of 17000-19000 levels. A lower level buying may emerge after the end of the current correction phase.

Ÿ It is expected that cultivation area will increases this year. Fresh crop will come in March. Till then, there is shortage in supplies.

Ÿ Stockiest have maintained liquidation pressure in jeera market due to selling in other spices markets.

Ÿ Demand is expected to pick up as prices are attractive after recent correction due to tight stocks.

Ÿ Cues from benchmark Unjha market of Gujarat are also not very encouraging as prices stayed steady there as well with limited off take from consuming centers.

Commodity: JEERA (October) Range: 17000-19000

9 Days EMA 18 Days EMA 55 Days EMA

Source: Reuters

2

3

®

FundamentalsŸ Cardamom futures (October) may witness profit

booking from higher levels & dip down to test 1100 levels. The upside may remain capped as the counter may face resistance near 1200-1215 levels.

Ÿ Special margin of 5% on long (buy) side imposed on all existing/ running contracts of Cardamom with effect from August 30, 2016.

Ÿ It is reported that, with small cardamom prices touching Rs 1,000 per kg after a gap of nearly a decade following output slump, inflow of Guatemalan cardamom into the country are getting mixed with the local variety.

Ÿ Lower quality domestic cardamom, is fetching Rs 600-650 per kg.

Ÿ India has in place an import duty of 73% plus a minimum import price of Rs.500 per kg.

Ÿ The harvest season is expected to start by the end of this month or in early September.

Ÿ Last year's small cardamom production is calculated to be above 30,000 tonnes.

Ÿ This time, because of the widespread damage caused by drought and strong winds, it is likely to be in the range of 10,000 to 15,000 tonnes.

Ÿ According to growers in Idukki the crop is likely to be lower by around 40 - 50 per cent because of the drought this year.

Ÿ They said only four rounds of picking are possible during the current season as the harvesting would begin only after Onam festival viz., after September 15.

Ÿ Exporters are inactive because of high prices on the one hand and non-availability of exportable grade material on the other. Therefore, they are waiting for the harvesting to begin in full swing.

Ÿ The individual auction average vacillated between Rs.920 and Rs.990 a kg.

Ÿ Following a sharp rise in prices, which crossed the Rs.1,000/kg mark, major dealers stayed away from the

Commodity: CARDAMOM (October) Range: 1200-1100

9 Days EMA 18 Days EMA 55 Days EMA

Source: Reuters

market.Ÿ Demand is expected to pick up further with the beginning of

the festival season from next month.Ÿ Good colour bulk from the new crop was being traded at

Rs.850-950.Ÿ Prices in Rs./kg: 8mm bold good colour: 1,350-1,400; 7-8

mm: 980-1,050; 6-7 mm: 850-950 and below 6 mm: 770-830.

Ÿ Total arrivals during the season which officially begins from August 01 up to August 27, 2016 were at around 1,584 tonnes and sales were at 1,475 tonnes.

4

Source: SMC Research

Forward curve of Turmeric futures

As per closing on 31st August 2016 Source: SMC Research

Forward curve of Jeera futures

As per closing on 31st August 2016

Source: SMC Research

Forward curve of Cardamom futures

As per closing on 31st August 2016

Forward curve of Spices

®

7300.00

7226.00

7258.00

7290.00

7180.00

7200.00

7220.00

7240.00

7260.00

7280.00

7300.00

7320.00

Sep Oct Nov Dec

17755.00

17915.00

18150.00

18370.00

17400.00

17500.00

17600.00

17700.00

17800.00

17900.00

18000.00

18100.00

18200.00

18300.00

18400.00

18500.00

Sep Oct Nov Dec

1138.80

1182.20 1182.40

1160.00

1155.00

1110.00

1120.00

1130.00

1140.00

1150.00

1160.00

1170.00

1180.00

1190.00

Sep Oct Nov Dec Jan

5

Source: SMC Research

Turmeric futures Seasonal Index(Based on Avg. price from 2009-2015)

Source: SMC Research

Jeera futures Seasonal Index(Based on Avg. price from 2009-2015)

Source: SMC Research

Cardamom futures Seasonal Index(Based on Avg. price from 2009-2015)

Monthly seasonal price movement of Spices

®

0.60

0.70

0.80

0.90

1.00

1.10

1.20

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

0.80

0.85

0.90

0.95

1.00

1.05

1.10

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

0.80

0.85

0.90

0.95

1.00

1.05

1.10

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

6

®

SMC Global Securities Limited is proposing, subject to receipt of requisite approvals, market conditions and other considerations, a further public issue of its equity shares and has filed a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The DRHP is available on the website of the SEBI at www.sebi.gov.in and the website of the Book Running Lead Managers i.e. Tata Securities Limited at www.tatacapital.com and IL&FS Capital Advisors Limited at www.ilfscapital.com. Investors should note that investment in equity shares involves a high degree of risk. For details please refer to the DRHP and particularly the section titled Risk Factors in the Draft Red Herring Prospectus.

Disclaimer:

This report is for the personal information of the authorized recipient and doesn’t construe to be any investment, legal or taxation advice to you. It is only for private circulation and use .The report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. No action is solicited on the basis of the contents of the report. The report should not be reproduced or redistributed to any other person(s)in any form without prior written permission of the SMC. The contents of this material are general and are neither comprehensive nor inclusive. Neither SMC nor any of its affiliates, associates, representatives, directors or employees shall be responsible for any loss or damage that may arise to any person due to any action taken on the basis of this report. It does not constitute personal recommendations or take into account the particular investment objectives, financial situations or needs of an individual client or a corporate/s or any entity/s. All investments involve risk and past performance doesn’t guarantee future results. The value of, and income from investments may vary because of the changes in the macro and micro factors given at a certain period of time. The person should use his/her own judgment while taking investment decisions. Please note that we and our affiliates, officers, directors, and employees, including persons involved in the preparation or issuance if this material;(a) from time to time, may have long or short positions in, and buy or sell the commodities thereof, mentioned here in or (b) be engaged in any other transaction involving such commodities and earn brokerage or other compensation or act as a market maker in the commodities discussed herein (c) may have any other potential conflict of interest with respect to any recommendation and related information and opinions. All disputes shall be subject to the exclusive jurisdiction of Delhi High court.

For further any queries, please contact

Subhranil Dey Sr. Research Analyst subhranildey@smcindiaonline.com

Ph.: 011-30111000

Extn.: 674