Wednesday, July 9, 2008

Rainfall Fears For Indian Turmeric Crop

Deficient rainfall in the main Indian turmeric growing states has delayed cultivation and farmers fear that acreage may fall this year if weak monsoon persists, traders and analysts said.

Andhra Pradesh, Tamil Nadu and Karnataka in southern India and Maharashtra in the west are main producers of turmeric where lower rains have delayed sowing by a fortnight, Naresh Shah, a trader based in Sangli in Maharashtra, said.

"Everybody is waiting for rains. If they remain weak for the next fortnight, then acreage under turmeric will certainly go down," he said.

Turmeric cultivation starts in June, when monsoon reaches the southern and western states of India.

Lower rainfall may force farmers to opt for corn and soybean crops, which require less water than turmeric and are also giving good returns, said Punam Chand Gupta, a large trader and exporter based in Nizamabad, Andhra Pradesh.

"Already we have seen some diversion in Andhra Pradesh," Gupta said.

The arrival of monsoon three days ahead of schedule in turmeric producing states had led traders to expect higher acreage, helping farmers get higher prices.

The price of turmeric in the Nizamabad spot market was around 4,100 rupees per 100 kg this year, almost double the 2,100 rupees that prevailed in June 2007, according to data compiled by National Commodity and Derivatives Exchange (NCDEX).

Acreage in Tamil Nadu, where rains were higher than other turmeric growing states may rise, but Maharashtra, Karnataka and Andhra Pradesh are likely to see a decline, said Nandkishore Sarda, a trader based in Sangli.

In June 1 to July 2 period, central parts of Maharashtra, northern Karnataka and coastal Andhra Pradesh received lower rainfall compared to long term average, while Tamil Nadu rains were higher, the India Meteorological Department data showed.

Turmeric is a delicate crop and needs to be cultivated and harvested with care to avoid damage to the rhizomes. After the harvest, these are boiled and dried before reaching the markets, making it labour intensive.

Source: Reuters

Tuesday, July 8, 2008

Vietnam Pepper Exports Could Fall By 10 Per Cent

Exports of pepper from Vietnam, the world’s biggest producer, may fall by almost 10 percent this year as farmers hold back stock because the central bank’s interest-rate increases are raising their costs.

Shipments may decline to 75,000 metric tons, from 83,000 tons in 2007, according to Do Ha Nam, chairman of the Vietnam Pepper Association.

The estimate is based on a drop in the volume of exports in the first five months of the year, he said.

“Farmers don’t want to sell pepper now because they see increasing farming costs, so they want to wait for a higher price,” Nam said in an interview in Ho Chi Minh City recently.

“Vietnamese pepper exporters are having difficulties buying from farmers.”

Exporters’ production costs have increased after the State Bank of Vietnam raised interest rates three times this year to slow the fastest inflation since at least 1992.

Producers may hold back stock to wait for higher prices next year, Nam said.

The International Pepper Community, an association of producing countries based in Jakarta, forecasts a shortage of 54,000 tons of the spice globally this year, according to Nam.

Vietnam’s pepper association reduced forecasts for exports this year from 80,000 tons as banks increased lending rates to as much as 21 percent.

The central bank raised interest rates to 14 percent from 12 percent on June 11.

“Without increasing the buying price, traders don’t have much money because banks are charging a high interest rate for loans,” Nam said.

Farmers can stock pepper for about three years without damaging the quality of the spice, he said.

Vietnam’s average export price in the first five months of this year was US$3,500 a ton, compared with $3,300 a ton in 2007, according to the HCMC-based Vietnam Pepper Association, which represents 27 Vietnamese exporters.

“This will definitely boost exports from India as it is the second-biggest producer and push up local prices,” Harish Galipelli, head of research at Karvy Comtrade Ltd., said by phone from the southern Indian city of Hyderabad.

Vietnam shipped 35,000 tons of pepper with a turnover of $124 million in the first five months of the year, compared with 39,000 tons of exports worth $107 million in the same period last year.

Vietnam earned $271 million from 83,000 tons export last year.

The country’s largest pepper-growing areas are the southern provinces of Binh Phuoc, Dong Nai and Ba Ria-Vung Tau.

The country’s exports started with 10,000 tons in 1996, peaking at 116,000 tons a decade later.

The country produced 85,000 tons of the spice last year.

The next biggest growers were India and Brazil, which produced 50,000 tons and 35,000 tons respectively, according to figures from the International Pepper Community.

Source: Thanh Nien News

Monday, July 7, 2008

India Puts Temporary Ban On Maize Exports

The Union Government has banned the export of maize till October 15 for increasing domestic availability of the commodity to check rising prices of poultry and starch products. The ban follows the persistent demand of the poultry industry and National Egg Co-ordination Committee for ban on exports and futures trading.

Recently, Union Commerce Secretary, G K Pillai had hinted that government might soon ban maize exports and futures trading. However, the government is yet to ban maize futures.

According to the Directorate General of Foreign Trade notification, the ban on export of maize is with immediate effect. Maize prices in the country are ruling at over Rs 900 per quintal in mandis, while in the US they have touched $400 per tonne (Rs 1,720 a quin tal). Maize is a key ingredient for poultry, livestock and starch industries, which require about one million tonnes of the commodity every month.

Source: Commodity Online

Punjab To Relax Wheat Movements

The Pakistan government’s decision to tell Punjab government to lift curbs on movement on wheat may help solve the cereal crisis in the country.

According to reports, Prime Minister Syed Yousuf Raza Gilani has asked the Punjab government to relax the movement of wheat to deficient areas of the country to enable flour mills there to continue the grinding work.

Gilani said the process of wheat import was being expedited so that the consignments reached the country before the end of November.

The prime minister said the government would ensure adequate supply of wheat all over the country and necessary measures were being taken to meet the requirements of the provinces.

According to a government press note, Gilani directed the ministries concerned to provide the provinces their share immediately after shipments were received at ports.

Source: Commodity Online

India To Regulate Quality Of Tea Exports

India is planning to formulate a policy to ensure exports of good quality tea from the country, a top government official said on Monday.

The federal government will use its regulatory powers to stop export of poor quality product that was hurting exports, Basudev Banerjee, chairman, Tea Board of India, told reporters on the sidelines of the annual meeting of a tea traders' body.

The policy will aim at setting a benchmark price for tea exports to keep a check on quality, he said.

In 2007, India's tea exports fell 28.35 percent on lower shipments to strife-torn Iraq and an appreciating rupee.

India's exports to Iraq stood at about 10 million kg in 2007, sharply down from 41.33 million kg in 2006, on payment issues due to shipment of poor quality consignments.

"We have taken up remittance issues in Iraq through diplomatic channels and payments have started coming," Banerjee said.

Regulation in quality of tea exported would boost exports in the long run, he said adding the draft policy will be put before the federal government for approval in three months.

The country is targeting 190 million kilograms of tea exports in 2008, Banerjee said.

India, the world's fourth largest tea exporter, sends the bulk of its tea to Russia, United Arab Emirates and United Kingdom, apart from Iraq and Pakistan.

In 2008, the country is targeting export of 10-15 million kgs of tea to Egypt, from 5 million kg now, Banerjee said.

It is also trying to boost exports to Pakistan, currently importing about 10-15 million kgs of tea, he said.

Source: Reuters

Philippine Coconut Exports Drop 37 Percent In May

Exports of Philippine coconut products dropped 37 percent in May to 101,223 metric tons in copra terms from its 2007 level of 160,940 tons, according to the United Coconut Associations of the Philippines (UCAP).

UCAP said the shortfall was the first ever recorded during the year.

Preliminary data from the UCAP showed that except for oleochemicals, major coconut products exported in May reflected big declines.

However, despite the sharp drop in May exports, the cumulative January-May figure continued to outpace last year's volume by 29.6 percent at 753,326 tons in copra terms compared with the level of 581,474 tons for the same period last year.

Shipments in May brought total exports of coconut oil for the first five months of the year to 405,073 tons (from last year's 289,242 tons); copra meal, 221,204 tons (from 154,588 tons); desiccated coconut, 40,317 tons (from 54,952 tons); oleochemicals as copra, 48,020 tons (from 37,400 tons).

In May alone, export of coconut oil dived 42.8 percent year-on-year to 49,157 tons from 85,977 tons. The May volume was the lowest tonnage recorded during the year, according to UCAP.

The bulk of the month's shipment of coconut oil comprising 34,727 tons (70.6 percent) was delivered to the United States. This was followed by China with an uptake of 8,300 tons and Japan, with 3,650 tons.

The European market reduced its imports for the month to 2,480 tons.

Shipment of copra meal likewise slumped 43.7 percent to 38,550 tons from its year-ago level of 68,458 tons.

Unlike coconut oil, the market for copra meal has been consistent with Korea leading the pack, cornering 36,227 tons or about 94 percent of the total product volume shipped in May.

Source: Philippine Daily Inquirer

Saturday, July 5, 2008

Malaysian Palm Oil Prices Lower

Malaysian crude palm oil futures fell on Friday as soybean oil extended losses on China’s Dalian exchange, but the prospect of strong demand ahead of Asian festivals supported the market.

Soyabean oil prices on the Dalian Commodity Exchange fell more than one percent as a large grain trading firm liquidated contracts amid market talk that Beijing might release soybean reserves to stabilise food prices during the August Olympics, dealers said.

The benchmark September contract on the Bursa Malaysia Derivatives Exchange settled down 0.14 per cent, or 5 ringgit, to 3,630 ringgit ($1,112) a ton, after hitting intraday low of 3,614 ringgit.

Losses in the palm oil market are limited today as everyone is looking forward to good demand in July and August for festivals, said a dealer with a domestic plantation house.

Traders in Malaysia and Indonesia expect overseas demand from China, India and Middle Eastern countries to pick up in July, as buyers tend to stock up at least two months before the Asian festival season that begins early September.

Other traded months fell between 19 and 24 ringgit, except for current month July and distant December and January which rose marginally. The overall trade stood at 5,998 lots, around half of around 10,000 lots that change hands on a routine day.

The most-active January 2009 soyaoil contract on China’s Dalian exchange fell 1.03 per cent.

Dealers said soaring crude oil prices also supported palm oil, a feedstock for biofuels.

Oil was near $145 a barrel on Friday, close to record highs reached in the previous session when traders bought into the market ahead of a holiday weekend in the United States.

In Malaysia’s physical market, crude palm oil for July shipment in the southern region was quoted at 3,600/3,630 ringgit a ton. Trades were done at 3,620 ringgit a ton.

Source: Dawn

Record Profits For Elpitiya

Elpitiya Plantations Ltd. (EPL), Aitken Spence's plantation arm recorded its best year of profits during the financial year ended 2007/08. Premium tea prices and returns from diversification into multi crops, especially palm oil contributed strongly to the bottom line.

Chairman of Aitken Spence Plantations, J.M.S Brito said, "We have had an excellent year which had seen our strategy of diversification paying off. Tea production and bought leaf production improved over the previous year. There was a significant improvement in palm oil production, which is now gradually increasing its productivity. Inclement weather during the year saw rubber production decline compared to the previous year."

On the revenue side, the company said that the sales average for tea showed a distinct improvement after September 2007 particularly in the high grown areas where a larger segment of tea in EPL is produced. Tea prices in the low grown areas continued its rising trend during the period under review.

Elpitiya Plantations also noted that the most significant improvement was seen in the sale average of palm oil, which has been boosted by a rising market for edible oils in the international market and the interest on bio fuels.

The company also invested heavily into energy saving devices from hot water generators to low energy saving withering fans, which all have contributed to controlling cost of production despite the wage impact during the year. EPL is in the process of completing a small hydropower project, which will supply power to the national grid on a Letter of Intent signed with the CEB.

The company noted that there is significant potential to develop hydropower in the future.

Over the years, EPL has also developed a valuable resource in over 400 ha of forestry, which has a substantial value in current terms particularly with a phenomenal rise in global oil prices.

Adding value to this resource is one of the strategies planned by EPL.

Source: Daily News

Farmers Cheered By Rising Coconut Oil

Spiralling coconut oil price is spreading cheer among coconut farmers, while the traders are a worried lot as there is no sign of a let-up in price rise. The prices have been rising for the last two months driven by a combination of factors like international trend, increase in consumption of coconut and its products and a shortage of copra.

On Wednesday, the wholesale spot price of coconut oil stood at Rs 6,640 per quintal. The futures at the First Commodities Exchange of India (FCCI) here, also showed an upward trend with August futures at Rs 6,850 per quintal, September at Rs 6,870 and October at Rs 6,955.

FCCI chairman PV Alexander said the indications are that the prices could touch Rs 7,000 per quintal. The main reason, according to him, is the rising edible oil prices in the global market. It has been reflected in the domestic market as well.

The efforts of the Coconut Development Board (CDB) to increase the consumption of coconut products seem to have borne fruit. There is an increased demand for coconut oil as well as for coconut desiccated powder, coconut milk and cream etc.

“The export demand of these products have risen. The local vanaspathi industry has started using coconut oil as it was the cheapest,” Mr Alexander said. Meanwhile, insufficient rains have upset the calculations of cardamom farmers in the main producing region of Idukki district as auctions for the new season begin.

The auctions of KPMC in Kerala started on June 22 while CPMC auctions began on July 2. From Rs 611 per kg in June, the average price of cardamom slipped to Rs 511 per kg on Wednesday’s auctions. However, the arrivals are low at 22.5 tonnes though harvest has begun.

According to market sources, the trade has been expecting a higher crop this year. In 2007-08, the cardamom crop was 9,470 tonnes. This year with bountiful summer rains, the farmers had expected a crop of over 12,000 tonnes. But with a weak monsoon so far, the farmers doubt whether higher production could be achieved.

Source: Economic Times

Friday, June 27, 2008

Coconut Oil Prices Set To Rise Again

Coconut oil prices are likely to rally further to record levels with supply of copra falling short, traders said. Oil prices are already on the higher side by almost 22% from the price recorded in January 2008 and traders see the market breaching the recent best of Rs 7,500 per quintal very soon.

Conversion into copra has almost stopped in Kerala due to rains and supply from Tamil Nadu is low, Talat Mehamod, a trader at the terminal market of Kochi told FE. “Farmers in Tamil Nadu are holding back some stocks in anticipation of better realisation, but the allover availability of copra has declined,” he added. Usually, price of coconut oil declines with start of production season in Kerala (February) and reaches the end of the trough during June as production peaks in Tamil Nadu and Karnataka.

While the Coconut Development Board harps on the consumption of tender coconut as the main reason for the declining availability of copra, traders point out that value addition has helped a lot. “Big North Indian companies are procuring coconut for conversion into coconut milk and desiccated coconut. The market for packed coconut milk is seen increasing rapidly,” Talat added. With other edible oils also on the boil, traders see scope for more substitution by the industrial users like soaps and detergent manufacturers.

Increasing price of palm oil in the global market also wards off competition by household consumers who switch usage depending on cost, board sources said, believing that inelastic demand for tender coconut due to its health benefits will help stabilise the coconut oil market.

Source: Financial Express

Thursday, June 26, 2008

India Expects Rise In Maize Yield

High yield hybrid seeds of maize find more potential in Indian soil as the farmers expect 15-20 percent increase in maize production in this khariff season.

S K Singh, President of Indian Maize Development Association said maize production in the country is expected to increase 15-20 percent to 18 million tonnes due to timely intervention of farmers by enhancing the acreage of the crop.

Farmers are sowing hybrid seeds and diversifying to Punjab, Uttar Pradesh and Bihar.

India is estimated to have produced 18.54 million tonnes of maize in 2007-08, out of which 14.82 million tonnes came from the Kharif season, which is the post-summer period when farmers in many parts of the country depend on monsoon rains.

Singh said farmers in Punjab, Bihar, Uttar Pradesh and Andhra Pradesh are shifting to maize cultivation from other coarse grains like jowar and bajra as it offers them more returns.

Though the average yield is two tonnes per hectare, the maize productivity in some parts is over three tonnes a hectare, he said, adding farmers in Karnataka and Haryana are fast adopting the hybrid seeds of maize.

Bihar has emerged as a major destination for growing maize where the yield has also been improving, he said, adding Himachal Pradesh and Uttarakhand also have the potential to grow the crop in their rain-fed areas.

Source: Commodity Online

Sri Lanka Tea Board Discourages Further Cultivation

Sri Lanka's tea board is not encouraging the expansion of tea cultivation in an effort to prevent over-supply from depressing prices and has warned the industry against being carried away by current high prices.

Sri Lanka Tea Board chairman Lalith Hettiarachchi said that although tea prices were now at high levels there was concern that the growth in consumption was not keeping pace with the expansion in production, "We do not encourage the expansion in land area although we do encourage productivity and quality improvements to maintain prices," he said.

"The rapid growth in tea production in the last two decades despite falling markets reflects the drive by producer countries to expand tea areas in order to spread the cost of production," Mr Hettiarachchi told the annual general meeting of the Colombo Tea Traders' Association Friday.

"We would also like to expand but the Tea Board in particular does not encourage any production expansion area-wise in Sri Lanka because of the dire consequences that would entail by over-production in the long-run."

The UN's Food and Agriculture Organisation expressed concern over the possibility of excess production at the recent Inter-Governmental Group on Tea meeting of tea producing and consuming countries in China.

"The FAO is concerned that tea production growth is in excess of demand and finds the situation alarming. This should be of concern to the tea industry. The expansion has come mainly due to record crops in China, Vietnam and India," Hettiarachchi said.

World tea prices on average rose 6.5 percent in 2007, on top of an 11 percent rise in 2006.

"This is a phenomenal increase in price," Hettiarachchi said. "Prices are expected to maintain their upward trend in 2008 too because of tight supply, made worse by the decline in crop in Kenya."

Hettiarachchi said the FAO is also alarmed over the sharp price increases.

Source: Lanka Business Online

Sri Lanka To Join Tea Producers' Forum

Sri Lanka is to join a global forum of major tea producing countries, Tea Board chairman Lalith Hettiarachchi said.

Most major tea producing countries have signed a memorandum of understanding to form the International Tea Producers Forum (ITPF) which will focus on issues of concern to producers, he said.

The Plantations Industries Ministry is to seek cabinet approval soon to ratify Sri Lanka's membership of the ITPF.

The MoU was signed at the recent meeting of the UN Food and Agriculture Organisation's Inter-Governmental Group (IGG) on Tea meeting of tea producing and consuming countries in China.

The ITPF is modelled on the lines of the International Coffee Organization, International Pepper Community, and Organization of the Petroleum Exporting Countries.

Members of the proposed forum include Kenya, India, Sri Lanka, Bangladesh, Indonesia, Tanzania, Malawi, and Zimbabwe.

China, which is mainly a green tea producer, is not a member of the producers’ forum.
Major tea producer countries as well as the FAO expressed concern over the possibility of excess production at the IGG meeting in China.

Source: Lanka Business Online