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SPICES

• Spices complex was in red on Friday. Profit booking was seen in jeera futures after rising to three month highs, while tepid demand dragged down coriander and turmeric futures.

• The National Commodity & Derivatives Exchange has received approval from the Securities and Exchange Board of India to launch options in goods contracts on turmeric, jeera and coriander, it said in a circular issued late Wednesday. The options in goods contract on the three commodities expiring in Aug-Nov will be available for trading from Friday. The transaction charge will be 30 rupees per 100,000 rupees of premium value. As per the contract specifications, the trading and delivery unit for turmeric and coriander is 5 tn each, while for jeera it is 3 tn. The options contract will be launched a day after the futures contract with the same underlying is launched. Upon the expiry of the contract, the outstanding open position shall result in compulsory delivery. The final settlement price and the expiry date are the same as the corresponding futures contract.

• The export of spices from India during 2021-22 declined nearly 13 per cent on year to 1,531,154 ton, according to data from the Spices Board India. In terms of value, exports dipped by about 1.25 per cent to 3,057,644.24 rupees. Export of chilli, turmeric, jeera, coriander, fenugreek declined, while that of pepper, cardamom, ginger and fennel rose.

• India exported 153,154 ton of turmeric in in FY 2021-22, down 16.70% on year. Coriander exports were down 15.16% on year at 48,658-ton, data showed.

• The exports of jeera during declined 27.28% on year to 216,996 ton. Export of small cardamom jumped by 63 per cent to 10,572 ton year on, while that of pepper rose 9.5 per cent.

• According to the second advance estimates by Gujarat state agriculture department, jeera production is seen declining to 236980 tons in 2021-22, down 41 per cent year on year. Area is seen at 289000 ha as against 473800 ha a year ago. Coriander production is seen declining as well to 211680 tons compared to 221240 tons in 2020-21.

COTTON

• India's 2022-23 (Jul-Jun) kharif acreage so far was up 0.1% from a year ago at 59.2 mln ha, farm ministry's data showed. The area under cotton across the country in the 2022-23 (Jul-Jun) season was over 10.28 mln ha, up 6.4 per cent compared to same period last year.

• UK-based Cotton Outlook has revised downward its estimate for global cotton production in 2022-23 (Aug-Jul) by 108,000 tn to 26.3 mln tn, the agency said in a report. The revision has been made as production in the US is expected to be lower due to severe drought, which is likely to affect the yield. Production in the US is seen at 3.5 mln tn, compared with 3.6 mln tn projected in May. Production of cotton in India and China is seen steady at 6.0 mln tn and 5.8 mln tn, respectively. The agency has also lowered its estimate for global consumption in 2022-23 by 755,000 tn to 25.2 mln tn due to fall in demand from most major consuming countries.

• The Cotton Association of India has revised downward its production estimate for the 2021-22 (Oct-Sep) marketing season to 31.5 mln bales (1 bale = 170 kg), from 32.4 mln bales projected a month ago, it said in a release. The cut in estimate can be attributed to some crop loss because of excess rains in November in the key producing states that hit quality of the crop. Of the total crop, 28.8 mln bales had arrived in markets across India till May. Estimate for exports in the current marketing year has been maintained at 4.0 mln bales. India shipped around 3.8 mln bales of cotton till May, the association said.The association has also lowered its estimate for domestic cotton consumption to 31.5 mln bales, while imports for the season are pegged at 1.5 mln bales. The ending stock for the 2021-22 season has now been estimated at 4.7 mln bales, as against 5.4 mln bales projected a month ago, the release said.

• The area under cotton in northern parts of India, mainly in key producers Haryana and Punjab, is expected to decline in the 2022-23(Jul-Jun) season, according to back-of-the-envelope calculation based on government data from state farm departments.

• The US Department of Agriculture has raised its estimate for global cotton production to 121.3 mln bales (1 US bale = 218 kg) for 2022-23 (Aug-Jul), from 121.1 mln bales projected a month ago. The increase in estimate is attributed to rise in production in Egypt and West Africa, the agency said in its World Agricultural Supply and Demand Estimates report for June. Global cotton consumption is seen lower at 121.5 mln bales in 2022-23, compared with 121.9 mln bales a month ago, due to fall in demand from Mexico, Bangladesh, and Vietnam. Global exports are estimated at 47.5 mln bales, as against 47.6 mln bales a month ago. The agency has maintained its 2022-23 global ending stocks estimate at 82.8 mln bales. For India, the agency has maintained its estimate for production and domestic consumption for 2022-23 at 27.5 mln bales and 25.5 mln bales, respectively. Exports for the coming season are seen at 4.0 mln bales. Cotton ending stock in India is seen at 7.5 mln bales for 2022-23, marginally lower from 7.6 mln bales projected a month ago. The average price for US upland cotton during 2022- 23 season is seen at 95 cents per pound, up by 5 cents from the previous month.

OTHERS

• As per official sources, National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) has procured 24,18,016 MT Chana as of 9th June, 2022. The States where procurement has been done are: Gujarat (558,642 MT, procurement closed), Maharashtra (NAFED-6,62,484 MT, procurement closed & FCI72,466 MT), Madhya Pradesh (8,05,000 MT), Rajasthan (1,60,586 MT), Karnataka (73,867 MT, procurement closed), Andhra Pradesh (71,353 MT) and UP (13,618 MT). Chana procurement is being done at the MSP of INR 5,230 per quintal. Total procurement target is 29 lakh MT.

• According to the recent report by Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), Chickpea sowing area in the country is estimated to decrease to mere 4,43,000 hectare, down by 28% from 616,000 hectares while production is likely to fall by 43% to 606,000 MT from 1.062 MMT this year.

• The Securities and Exchange Board of India has asked the National Commodity and Derivatives Exchange to not launch any new chana contracts on its platform till further notice, the market regulator said in a release on August 16, 2021.

• India’s guar gum exports increased in the month of May’2022 by 36.42% to 27,748 MT compared to 18,971 MT during previous month. However, the gum shipments were up by 46.27 % in May’2022 compared to the same period last year. Out of the total exported quantity, around 8541 MT (30.78%) bought by US, Russia bought 4,686 MT (16.89%), China 3,618 MT (13.04%), Germany 3,408 MT (12.28%). Export demand was driven by bullish crude oil prices. We expect Guar export in June’22 at 25,000-28,000 tonnes.

• India’s Guar split exports increased in the month of May’2022 by 731% to 5,347 MT as compared to 643 MT previous month. However, the guar split shipments down by 50.66% in May’22 compared to the same period last year at 10,838 MT. Out of the total exports, around 3,800 MT (71.07%) bought by China, US 860 MT (16.08%), We expect guar split export in June at 4,000-5,000 tonnes. Total guar exports in May’22 recorded up by 6% to 33,095 MT as compared to 31,178 MT previous year same period amid bullish crude oil prices and increase in oil rig count. However, cumulative exports till May’22 still up by 12% to 200284 MT as compared to previous year same period at 179386.

OIL AND OILSEEDS

• India's 2022-23 (Jul-Jun) kharif acreage so far was up 0.1% from a year ago at 59.2 mln ha, farm ministry's data showed. Acreage under oilseeds was down 7.4% at 13.4 mln ha.

• Farmers have sown soybean across 11.5 mln ha this kharif season as of Friday, according to a survey conducted by the Soybean Processors Association of India.

• India's soymeal exports in June fell 61% on year to 30,000 tn, the SOPA said.For Oct-Jun, soymeal exports plunged to 563,000 tn from 1.87 mln tn in the year-ago period. In June, production of soymeal rose to 559,000 tn from 519,000 tn a year ago, while the output for Oct-Jun was at 4.78 mln tn, down from 6.50 mln tn in the year-ago period. Soybean arrivals in spot markets totalled 500,000 tn in June, down from 550,000 tn a year ago. For Oct-June, arrivals fell to 7.50 mln tn from 8.52 mln tn in the year-ago period. By the end of June, mills, traders, and farmers were left with around 4.82 mln tn of soybean stock.

• India's exports of oilmeals rose 12% on year to 255,453 tn in May, according to data released by The Solvent Extractors' Association of India. During the first two months of the financial year that began on Apr 1, exports of oilmeals rose 11% on year to 589,425 tn. The rise in exports of oilmeals was mainly attributed to the surge in exports of mustard meal, which spiked to 398,355 tn in Apr-May from 274,392 tn in the yearago period. However, in case of soymeal, exports remained subdued as "India is out priced in the international market. Exports of soymeal plunged to 43,899 tn in Apr-May compared with 92,139 tn a year ago. During Apr-May, South Korea imported 216,739 tn oilmeals from India, compared with 179,115 tn a year ago, and Vietnam imported 125,597 tn against 85,636 tn a year ago, the association said.

• India's vegetable oil imports in May fell 15% on year to 1.1 mln tn, The Solvent Extractors' Association of India said. The fall in imports was primarily due to supply constraints in the wake of the Russia-Ukraine geopolitical tension. However, the imports are likely to improve in the near term, with Indonesia lifting the export ban on palm oil from May 23. During Nov-May, imports of vegetable oil were at 7.8 mln tn, as against 7.7 mln tn a year ago. The vegetable oil basket consists of edible and non-edible oils. Edible oil imports were at 1.0 mln tn in May, against 1.2 mln tn a year ago. However, for Nov-May, these imports were at 7.55 mln tn, as against 7.48 mln tn in the year-ago period. In May, about 409,027 tn of crude palm oil was imported, against 755,633 tn during the same month last year. As of Jun 1, about 484,000 tn of edible oil was at ports, against 570,000 tn a year ago, while 1.8 mln tn was in the pipeline, against 1.4 mln tn during the same period last year.

• The US Department of Agriculture in its June report has projected global oilseed output for 2022-23 (May-Apr) to fall marginally to 646.8 mln tn from 647.2 mln tn estimated the previous month. The agency attributed the fall in output to projection of lower sunflower seed crop in Ukraine. However, soybean production estimate has been raised for Ukraine based on reports of progress of planting, while mus tard seed output has been raised for Australia on the back of higher harvested area, both of which cushioned a sharp fall in global production outlook. The agency has projected global soybean output to rise by 680,000 tn to 395.4 mln tn. Brazil's 2022-23 soybean crop is estimated at a record 149 mln tn, and Argentina's crop is seen at 51 mln tn, unchanged from the May estimates. The agency has scaled up its estimate for global ending stocks for 2022-23 to 100.5 mln tn, up from 99.6 mln tn estimated in May.Estimate for global soyoil production for 2022-23 has also been revised upwards to 61.5 mln tn from 61.4 mln tn projected in the previous month. The department projected global soymeal output for 2022-23 at 256.9 mln tn, up from 256.5 mln tn last month. The estimate for global exports of soymeal in 2022-23 is higher at 70.1 mln tn, compared with 69.8 mln tn projected in May, it said. Soymeal is a derivative of soybean, manufactured by crushing the oilseed, and is mainly used in producing poultry feed.

• The government has allowed import of 2 mln tn of crude soyoil and crude sunflower oil per year each at nil duty under the tariff rate quota, the finance ministry said in a release. Imports made against the tariff rate quota will be effective from Wednesday till Mar 31, 2024.

• The Centre has extended stockholding limits on edible oils and oilseeds by six months till Dec 31 in a bid to check hoarding and check prices of the commodities in domestic markets, a government release said. In February, the Centre had imposed stockholding limits till Jun 30.

• India's mustard seed production in the crop year 2021-22 (Jul-Jun) is seen 29% higher at an all-time high of 10.95 mln tn, the Central Organisation for Oil Industry & Trade said in a release. In the previous year, mustard seed production was at 8.5 mln tn, according to the release. The area under has been pegged at 8.7 mln ha, and the average yield is estimated at 1.3 tn per ha.

• With the shortage of edible oil supply from imports due to the crisis in Ukraine, the Soybean Processors Association of India has recommended measures to augment the supply and cool down prices. The agency estimates a shortfall of edible oil supply from imports due to the war of approximately 200,000 tn a month of sunflower oil, it said in a note.

• The National Commodity & Derivatives Exchange will launch future contracts in refined castor oil on Mar 21, the bourse said in a circular. According to the contract specification the commodity will have trading unit of 2 tn, with the maximum order size of 200 tn. The contract will be settled in cash. The open interest threshold level to attract concentration margin in the commodity will be 17,900 tn.

• The government cut agriculture cess on crude palm oil and extended the lower customs duty on edible oils by six months till Sep 30 to cool domestic prices. The government cut Agriculture Infrastructure and Development Cess on crude palm oil to 5.0% from 7.5%, a finance ministry notification said. The Centre had in October slashed import duty on key edible oils till Mar 31. This has now been extended till Sep 30, the notification said.

• Farmers have sown mustard across 9.16 mln ha in the country, up 25.3% on year, in the ongoing 2021-22 (Jul-Jun) rabi season as of Friday, according to the farm ministry's data. The government fixed the minimum support price of the crop at 5,050 rupees per 100 kg for the 2022- 23 (Apr-Mar) marketing season, as against 4,650 rupees in the previous year.

• The Solvent Extractors' Association has urged the Centre and the Securities and Exchange Board of India to resume futures trade in mustard seed on the National Commodity and Derivatives Exchange.

• The Solvent Extractors' Association has urged the government to exempt soyoil from genetically -modified labelling requirement as it may lead to a rise in prices, it said in a letter. Last year, according to reports, the Centre had asked states to enforce separate labelling for geneticallymodified soyoil to help consumers make informed decision.

• The government has reduced the basic import duty on refined, bleached, and deodorised palm oil, to cool domestic prices, the finance ministry said in a notification. The new duty rates will be in place till Mar 31, the ministry said. The effective basic import duty on refined, bleached, and deodorised palm oil has been reduced to 12.5% from 17.5% earlier. With the new duty cut, the duty difference between crude palm oil, which is a raw material, and refined, bleached, and deodorised palm oil, which is the finished product, has reduced to 5.5% from 11.0% earlier.

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