22/05/2013 (MoneyControl.com) - Sharekhan's trading ideas on agricultural commodities

Sugar & Gur

• Sugar witnessed a firm tone in futures markets. Sugarcane has been planted in 40.3 lakh hectare as compared to 45.54 lakh hectare at this time in last year. Less area is reported mainly in Karnataka, Maharashtra, Tamil Nadu and Uttar Pradesh.

• Food Minister K V Thomas states that no import duty hike on sugar was imposed during the current marketing year ending September and said the government will take a decision on the issue after that. Earlier, cooperative sugar factories body NFCSF asked the Indian government to hike the sugar import duty on raw and refined sugar to 30 percent from 10 percent.

• According to NFCSF estimates, sugar production will be 25MT this year as against the demand of 22.5MT. Traders have imported 468,000 tonne of sugar so far even as the domestic production is expected to surpass the demand in the ongoing 2012-13 season (September-October) Taking into account imports, an opening stock in the next year would be around 9.66MT

Outlook: Prices are likely to trade firm in near short term.

Pulses

• Chana maintained a flat tone at futures

• Meanwhile we expect rise in prices on upcoming festivals.

• Continuous arrival pressure in Rajasthan weigh on prices.

• Commencement of chana sowing reported in Canada and the USA.

• Moreover, market participants informed that chana from neighbouring countries like Pakistan are traded at Rs3,300 per quintal in Delhi market also weigh on prices.

• Trade sources revealed that chana may dip to Rs3,200 per quintal at Delhi markets in this month while Ramzan in July month may support the prices in June.

Outlook: Chana prices would dwindle further to Rs3,300 per quintal in the coming weeks but on short term it would surge on festival demand.

Edible oils (include- ref. soy oil, crude palm oil)

• The domestic edible oil futures markets witnessed firm tone on buying for upcoming festival demand.

• As per SGS, Malaysian CPO export fell to 807,232 tonne in the first twenty days of May month compared with 864,206 tonne in same period in April. The Indian imports in the reported period fell to 105,800 tonne from 137,000 tonne in same period during previous month.

• As per Intertek, export of palm oil from Malaysia for the period of May 1-20 is down by 9.4  percent to 7, 99,405 tonne compared to 8 lakh MT of April month for the same period.

• China’s palm-oil inventory declines by 50,000 tonne in major ports from last week totalled 1.35MMT. However, inventories are still higher than 920,000 tonne a year ago.

• Indian cuts the benchmark import price for soybean oil and RBD palmolein to USD 1075 and USD 843 per tonne respectively from the USD 1,103 and USD 861 per tonne set on May 2, 2013. Meanwhile, import price for crude palm oil is raise to USD 831 per tonne from USD 824 per tonne. Benchmark prices are used to calculate tax on imports and revised every two weeks.

Outlook: Firm tone may be witnessed on upcoming festival demand.

Trade idea: Buy sugar, chana, CPO and soy oil on dips and sell cardamom on rise.

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