Market trend

JUNE 2016

MARKET TREND

SESAME 

Market opening quite stable locally due to some new demands in the market around 6500MTS Korea Private Tender & around 3000MTS trade reported of Natural Sortex to China. This is nothing majorly increasing too much on the spot despite the news that we have expected stronger than normal monsoon expected due to LA NINA this year. This might make the market interesting down the line as sesame sowing & much rains don’t go along well. Overall these levels are not too high as well considering the stocks levels/arrivals right now before new crop of OCTOBER 2016 and next wave of demand or speculative news will take market upward on new leaps surely.

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The present prices looks good to book forward covers for customers before the noise starts to happen again – as right now market is not too aggressive and prices got relaxed from the earlier levels just 2-3 weeks back.

Further compared to African origins, Indian Hulled is still trading a good competitive price so seems like a fair price equation for the demand to divert to India on global aspect.

PEPPER 

After fast market increase from beginning of May 2016 the market calm down due to limited demand from oversea. Other reasons from Chineses traders seem to be offer back to Vietnam now after they bough quiet good quantity from beginning of May to take profit. In principle the market should remain firm due to small crop in Lampong (aprox less 30% than 2015) and high demand for Brazilian crop. India harvested only 35-40k tones and not enough for domestic consumption.

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The total amount for seconds half of 2016 is very tight around 30 – 35k tones available to export (Vietnam domestic consumption increasing year by year with quantity around 7 - 9k tons so the farmers are not eagerly releasing their material, expecting better return in future.

CHILLY India chili crop is smaller compared with last year and the IPM materia expensive and hard to get.

The hot weather pushed up the prices. The Guntur market has been closed for summer vacation from May 6 for one month and chilli prices for the S4 stabilised. The Chinese new crop is better than last years make it more competitive for medium and low pungency material.

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GARLIC ďƒ’

Prices of Chinese dehydrated garlic have risen sharply on the back of tight supplies and strong demand.Supplies have been limited due to lower availability following reduced production of fresh garlic in China in the last two years and unfavourable cold weather in December and January . The demand for dehydrated garlic has remained strong pushing even more the prices.

ONIONS Onion prices have fallen the last two months on account of a bumper crop. The Indian government has exceeded its target of buying 15,000 tonnes of onion for buffer stock and has procured 20,000 tonnes to be used in case of price increases in the lean season.Onion production is estimated to have increased to 20.33 million tonnes in 2015-16 from 18.92 million tonnes in the previous year, as per government data. Last year, the government procured 8,000 tonnes of onion but after the retail prices had gone through the roof to about Rs 80-90/kg.The government, however, this year decided to buy on time and set a target to procure 15,000 tonnes of onion from the rabi crop of the 2015-16 crop year (July-June).

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NUTMEG & MACE ďƒ’

Price are stable due to week demand. The drought has been influencing especialy the mace prices which si on increasing trend. The Indian and Sri Lanka new crop generate less presure on Indonesian nutmeg prices.

CLOVES ďƒ’

Global cloves prices are relative stable but this is expected to be a short term blip on an anticipated pick up in demand and limited availability from Sri Lanka and Madagascar.It’s now becoming obvious that the Indonesian crop will be short by almost 35%, which seems to draw attention of Indonesian buyers which prefer to buy before the market may become much higher.The Madagascar local price is increasing regularly and the market is on a speculative trend.

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The Indian buyers will come back soon in the market, while the Singaporean traders are still buying even if the requested prices are below the current cost prices. It might be a sign that kretek manufacturers might come back in the market.The estimates for Indonesia crop is around 65,000-70,000 tonnes.

TURMERIC Despite the new crop comming in the market the prices have not been lower, due to the shortage of almost 20% of the current crop compared with 2015.The last 3 years we have faced reduction of turmeric crop, together with the fact that India is main exporter (83% of demand is covered by India) is putting a lot of pressure on price.

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CASSIA 

Ironically, this period is supposed to be ‘dry season’. This side effect of La Nina has flooded most parts of the main village in the district Sungai Penuh . Indonesian cassia supply flows have been hampered of late by persistent rains in origin, exerting upward pressure on prices related also to the Ramadan period.

OREGANO & LAUREL The prices aare on high level to to lack of material based on end season . No material of well controlled high quality available in origin. The new crop are expect to be at good level similar to 2015.

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PALM OIL 

Ideas that soaring palm oil prices might pull up the vegetable oil complex were looking less credible this week as the Malaysian futures market hit a three-month low on disappointing exports, a firming Malaysian currency and talk of output getting less of an El-Niño-drought hit than earlier put preassure on prices. The market is volatile and started slightly increasing trend with the upcomming fastening period.

CARAWAY All main cultivation origins (Baltic States, Finland, Poland, Austria and Germany) nearly completely sold out. Pesticide issues and low crop limited the available quantities drastically.

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CUMIN ďƒ’

Indian cumin seed prices rose by more than 12% during April due to aggressive demand both on the export and domestic side, particularly for quality stock. Harvesting and post harvesting activities are almost complete across origins.

GUAR 

The new Guar Seeds and splits have predominantly been purchased by stockists and speculators. Farmers are looking for alternatives to Guar, due to the low prices no longer making the crop viable. The repercussions of these decisions will only come to light once the next crops are harvested.Demand is still low from the oil and gas industry, however, demand from the technical and food industry has been increasing steadily.

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The prices for Guar Gum have remained range bound and no adverse fluctuations are expected to the price in the near future. The only concern is the potential change in the Rajasthan government’s tax regulation.If the tax is increased to 5% – 7%, this increased cost will be passed on to the customers, which will result in the average price for Guar Gum increasing in line with the new tax rise.

SWEET WHEY POWDER The whey prices have increased at the lower end of the price rabge.A factor of moving prices has been sale for use later in the year. Thus, there remains some apprehension as to whether this will lead to lower than desired demand later this year as customers rely on their own inventoriers rather than seeking new production. eucolait reports tahta jan-march EU whey exports increased 4.4% from the same period 2015.

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SKIMMED MILK POWDER ďƒ’

Skim milk powder prices increased very slightly at the bottom of the price range. Even with the significant influence of public interventions on thr markets(209000t have been bought in at fixed price so far this year in addition to 27000t bought in by tender) this slight firming is atttributed primary to customers in the EU who we are looking ahead to season declined in the milk supply and are belived to be securing supplies for future use at current low price levels. . The top sources for intervention program were Iraland , Germany, France, Poland and Netehrlands. There is anticipation that a new tender procedure rule may be publised soon making the prices going even higher.

CARRAGEENAN ďƒ’

The seaweed market has been volatile for the past months but is now starting to become stable. Some factors that affected this situation is the decline of seaweed price due to weak demand from traditional markets, slow growth in the Chinese economy, continued weak European economy, political/economic difficulties in Brazil and the safety issues about Carrageenan in the U.S. which has caused some food manufacturers to reformulate their products away from Carrageenan. These contribute to the overall weakness of the market.

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The price won't go much lower due to El Nino which hit the Philippines during this summer season. As seaweed raw material prices are at their lowest levels in years, it could start to move farmers away from seaweed farming to other more stable products. Once this happens, seaweed supply will come down and prices will start to improve. If you have short to medium term requirements (3-6 months), we suggest to cover half of your requirements now to take advantage of these low prices.