Market Trend

06.06.2017

MARKET TREND

PALM OIL 

Malaysian palm oil futures fell to their lowest in a month on Monday, due to lower demand as a supply crunch eased and as technical selling weighed on prices. The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange fell 1.5% to RM2,516 (US$589.16) a tonne at the close of trade, its second consecutive session of declines.

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Earlier in the session, it had touched RM2,509, its lowest level since April 28. Traded volumes stood at 36,845 lots of 25 tonnes each at Monday' close of trade. Palm fell today on a technical play, the market opened lower than Friday's low, triggering some selling pressure. Physical prices are also lower. Ramadan has started so demand should subside.

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Market supplies were tight in the last few weeks on the back of slower-thanexpected output growth and as demand for the Muslim fasting month of Ramadan reduced stockpiles.

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Ramadan, which sees worshippers break day-long fasts with communal feasting, is widely celebrated in India, the Middle East and Pakistan. Buyers usually stock up on palm oil a month before Ramadan, which this year began on Saturday. There was no support from trading in related edible oils with the Chicago Board of Trade and China's Dalian Commodity Exchange both closed for public holidays.

GARLIC 

New crop Chinese dried garlic is only a few days away and international buyers are being encouraged to start covering already for September to December shipments. In the cold storage, there is still enough material, but everyone needs material from the new crop. In the last week, prices seem to be stable. Most probably new decrease will be after mid-June when it will start full shipments from the new crop.

PEPPER 

After market moved up, the market continued to fall sharply during the weekend from May 20th to May 21st, when the Vietnamese market was affected by some information from Brazil; the depreciation of the real currency and the accusations from the Brazilian - a major agriculture producer and exporter of the world.

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Week 21st (from 22nd to 28th May) pepper market Vietnam remained stable and not much change;

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Farmers decided not to sell massively as before but actively waiting for opportunities to increase prices in the third & fourth quarter of 2017.

PEPPER 

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Exporters are more activities to cover raw material and make shipment in time.

China continues to cover orders but not much quantity Other information: 

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Vietnam exported 11,000 tons in the first half of May so the total output in 5 months would be about 100,000 tons Brazil continues to offer the most competitive with time shipment from Aug - Oct. The crop is expected to be between 50 and 60k tons spread from Aug to Oct 2017.

Sri Lanka is the main crop with a production of about 18k tons and the main market continues to be India.

Cambodia is at the time of the main crop with higher production than last year.

Many sources mentioning output from 25 - 30,000 tons with main buyers from Thailand/Vietnam/China.

Indonesia is aggressively offering for July/August shipment but higher than Vietnam Vietnam in Doan Ngo Festival is the second most significant festival (to the Lunar New Year Tet Holiday) of Vietnam. It’s very important festival for all Vietnam farmer.

Pepper price is at its bottom level for the last 6-7 years so farms are trying to prevent the downtrend, the crop is also finished

CLOVES ďƒ’

Cloves prices are stable. Even though Indonesia is reporting a small crop (50 % of a normal crop), the market is not convinced that this will lead us to record prices like some years ago. Sri Lanka has a good crop and Comores crop comes shortly. Cloves prices are stable.

ONION ďƒ’

The onion market is stagnant at the moment.

Raw onion supply has decreased in terms of volumes and quality as the monsoon is about to start. We don't see many downfalls in the price in good quality products from this point.

CASSIA 

Indonesian Cassia Vera market has been moving up constantly in the past months due to good demand and less availability and short covering especially for Cut Vera A Sticks are very difficult to procure and AA being very expensive. The Ramadan, the quantity of rain falls made difficult to obtain the cassia and the moisture is still high. In China, cassia prices have shown a downward trend and still expected to go down when new crop starts.

CARDAMOM 

Indian exports are looking forward to taking the advantage of the decrease in the price of the small Cardamom, as the prices have gone below Rs 1000 per kg for the first time in this season.

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The Cardamom exporters are facing tight competition from Guatemala. Earlier this year, Cardamom prices have reached a five-year high to Rs 1400 per kg due to the production drop of about 50 percent from a year ago.

CARDAMOM ďƒ’

From the five years high price, about a month ago it fell to about Rs 1200 per kg and now it is seen around Rs 960 per kg in the local market. Till a couple of months back, India was ruling the global market till the entry of the largest spice producer Guatemala. India had to decrease the price in order to compete Guatemala in the global market.

WHEY ďƒ’

European whey prices moved slightly higher. Internal European demand is relatively strong and able to keep inventories, which are committed to tight, from growing too much. Dry whey production is steady. However, manufacturers are making more whey protein concentrates in lieu of drying sweet whey powder. Eucolait reports January-March, 2017, EU whey exports increased 3.6% from the same period one year earlier. Export volumes and primary destinations are shown in the following table: EUROPEAN UNION WHEY POWDER EXPORTS

Main Three Destinations January-March 2017

Destination Quantity (MT) % of Total

China

41,108mt 29.1%

Indonesia

24,179mt 17.1%

Malaysia

11,565mt 8.2%

TURMERIC 

Turmeric Weekly Outlook: Negative-Turmeric for July delivery broke below weekly support at Rs.5480 and is now expected to decline further in the short term.

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Prices are expected to decline to Rs.5000-4700 in the shortterm whereas, on the upside, a breakout above resistance at Rs.5800 should see prices move higher in the short-term.

Physical market traders are reporting that prices may recover in the short term as supplies are being restricted as producers are not willing to sell stocks at lower prices.

NUTMEG 

Nutmeg prices are having on slack demand while they remained outpriced in the world market, blocking the commodity’s export potential.

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Indian nutmeg is trading $1,500 higher than Indonesia. At this level, even origin-specific buyers have switched to Indonesia because their quality is far superior to the Indian variety.

NUTMEG 

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Harvesting in India has begun and total production of nutmeg with shell is estimated to be 15,000 tonnes. Of this, the shell weight comes to 30 per cent and thus the total output without shell would come to around 9,500 tonnes. Mace production is estimated at 1,000 tonnes, he said.

India exports its surplus nutmeg production mainly to the Gulf countries and China. As against the official export target of 4,500 tonnes of nutmeg and mace for the fiscal year 2016-17 India has shipped out 4,070 tonnes of the commodity the April-December period.

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Exports in the corresponding period in 2015-16 stood at 3,015 tonne.

Thus, there was an increase of 35 percent in quantity and 26 percent in value. During the financial year, 2015-16 India imported 490 tonnes of nutmeg and 1,200 tonnes of mace.

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With a total output of 15,000 tonnes India accounts for approximately 55 percent of the world production. Of this the country exports around 30 per cent. Until recently there had been a reasonable supply and demand equilibrium and at times, with seasonal under-supply, prices remained firm. However, this has changed recently due to the impact of plantation material, which has outstripped demand.

CHILI 

The current trend of prices coming down on the back of oversupply, which is the case for Pulses is being now followed by Chilli, as Chilli prices have declined due to the oversupply in the major producing areas.

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Last season chili prices in India was seen around Rs 90 to Rs 120 per kg, which now has been declined to around Rs 20 to Rs 40 per kg. India is the largest producer of Chilli, which accounts for about 38 percent of global production.

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Chili production in the country has seen a monumental rise, mainly in the major producing areas like Andhra Pradesh and Telangana. The production in these areas has increased to about 0.8 to 2.4 million tons.

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This trend has caused a huge problem to farmers as they were not able to adapt to the low prices. The farmers now want the government to start procuring Chilli as the same way they have done with Tur.

SKIM MILK POWDER ďƒ’

Skim milk powder (SMP) prices in Europe are moving higher as internal European demand is strengthening. Production of SMP has slackened due to milk deliveries not meeting expectations, and active cheese production is pulling hard on available milk intakes. Industry contacts say SMP production is in good balance with current demand. Inventories of uncommitted SMP are tight. Market participants are finding prices for feed grade SMP to be very close to prices for food grade SMP. Older product availability is limited and most SMP with age is locked up in intervention.

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Total SMP stocks in intervention as of March 2017 were 350,159 MT. According to Eurostat, EU SMP production January - March 2017, declined 9.0%. During that time frame, production decreased in four of the top SMP producing member states. Germany decreased 11.2%. France decreased 15.0%. Belgium decreased 21.2%. Poland decreased 1.2%. Eucolait reports January-March EU exports of SMP increased 6.7% from the same period one year earlier. Export volumes and primary destinations are shown in the following table: EUROPEAN UNION SKIM MILK POWDER EXPORTS

Main Three Destinations January-March 2017

Destination Quantity (MT) % of Total

Algeria

26,466mt 13.9%

China

21,059mt 11.1%

Indonesia

17,213mt 9.0%

WHOLE MILK POWDER 

Prices for EU whole milk powder (WMP) increased somewhat, pulled along by higher valuations of milk fats and protein. As the prices rise, some manufacturers are seeing greater price pressures in international markets.

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WMP production and internal European demand are steady. Manufacturers are producing WMP to meet contractual obligations, but see greater economic opportunities to use the milk fats and proteins in other dairy products.

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According to Eurostat, EU WMP production January - March 2017, increased 0.4%. During that time frame, production increased in the Netherlands by 15.2% and in France by 3.6%, but decreased in Germany, 2.9%.Eucolait reports January-March, 2017, EU exports of WMP increased 16.5% from the same period one year earlier. Export volumes and primary destinations are shown in the following table: EUROPEAN UNION WHOLE MILK POWDER EXPORTS

Main Three Destinations January-March 2017

Destination Quantity (MT) % of Total

Algeria

19,223mt 18.6%

Oman

11,978mt 11.6%

Kuwait

5,373mt 5.2%