Turmeric, Corn and Copper

The price of turmeric between 1 October 2009 and 15 October 2009 shot up from around Rs8,000 to Rs8,900 due to lower arrivals and strong demand. Emergence of export demand from the Middle East is also supporting the gain in prices. Turmeric stocks were already lower by seven lakh bags compared to last year and the recent floods and heavy rains have further increased the gap to about eight lakh bags. Post-Diwali, prices are expected to touch Rs7,800 to Rs8,000 levels as some profit-booking would be seen in the markets.

Recent floods in the southern states of Andhra Pradesh and Karnataka have affected the corn-producing belt. This will keep corn prices high, since nearly one-fifth of the crop in Karnataka and AP has been wiped out. Karnataka and AP account for 10% and 20% of corn output respectively.

Copper remains a base metal with strong fundamentals. Chinese demand has begun to normalise; demand for copper remains fairly robust while scrap supply remains steady too. However, fears that all is not well with the supply scenario have resurfaced due to strikes in key producing areas. The rich countries are likely to join the emerging world in global economic recovery in 2010 resulting in a rise in the copper demand in the first quarter of 2010. Copper prices are expected to move above $6,700 in the next three-four months. 
 

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Crude Oil

Crude oil has hit a fresh one-year high. Prices can touch $90 per barrel from here on. Demand from emerging Asia is already strong; and demand from rich countries should start to pick up in the first quarter of 2010. Capacity expansion could create tightness in supply with refinery capacity increasing rapidly. The weak US dollar should also support higher prices. Between 7 October 2009 and 14 October 2009 crude has gained 12% closing the day at $78 per barrel. According to the American Petroleum Institute, US crude oil stockpile fell 172,000 barrels to 339.20 million barrels in the week ended 9 October 2009.

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Spices, Cotton and Soya Oil

Spice exports from India fell 10% between April 2009-August 2009. The country’s export earning has slipped 9% to $429.68 million from $546 million a year ago. However, in August 2009, exports rose 3.5%.

Indias cotton exports in the 2008-2009 season which ended in September 2009, are estimated to have plunged a massive 55% to about 38 lakh bales due to higher prices in the domestic market. The country had exported 85 lakh bales in the 2007-2008 season. In October 2008, the Cotton Advisory Board had estimated cotton exports to be at 75 lakh bales during 2008-2009. Last year, the government had raised the minimum support price (MSP) by 50%. The MSP has not been hiked for the 2009-2010 season. India is now left with over 71 lakh bales of carry-over stock for the 2009-2010 season.

According to the Solvent Extractors Association of India (SEA), during the season ending September 2009, Indias crude soya oil import is estimated to have surged by 40%, to over one million tonnes, against 731,000 tonnes last season. The government has allowed crude soya oil import at zero duty and refined variety which attracts 7.5% duty.

Coking Coal
According to a report by Citi Investment Research and Analysis, a division of Citigroup Global Markets Inc, global prices of coking coal, which are floating around $160-$170 a tonne, are expected to harden further and reach $200 a tonne in 2010-2011, thanks to higher coking coal imports by China.

 

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