New crop arrivals weigh on agro commodities: Sharekhan

Buy sugar on dips for short term. sell chana, chilli and turmeric, while other agri- commodities are also likely to remain weak.

Both sugar and gur witnessed firm sentiment. ED&F Man sees 23.5 million tonne of sugar production for FY2013-14 marketing year. It also sees the Indian sugar import to 1.4 million tonne in FY2012-13 with 1.1 million tonne of sugar already landed in India till date. ISO chief revealed that sugar production in India in the next year looks positive despite concerns about drought situation in some states like Maharashtra. Due to drought this year, cane growers in Maharashtra and
Karnataka have not yet started sugarcane planting. Drought in Maharashtra has been so severe that the state government has ordered saving water for drinking purpose. Maharashtra is likely to produce 4 million tonne of sugar in FY2013-14 owing to lack of rainfall in the region, according to Maharashtra state government officials. CCEA Meeting over sugar decontrol issue was further postponed to April 4, 2013.

The government issued a public interest notice to release the 104 lakh tonne of non-levy sugar quota in the next six months starting from April to September 2013 without any month quota limitation. However, there would be no conversion of unsold non-levy quota into levy quota during the period of current release. The government has also released, during this month,
3.69 lakh MT of levy sugar for meeting requirements of Public Distribution System (PDS) for April-May 2013. Outlook: Prices are likely to trade firm in near short term.

Chana witnessed a weakness in prices. Moreover, the traders expected that prices may touch the level of around Rs3,200 in near term. Recent rainfall in Madhya Pradesh and Rajasthan is likely to hamper the chana crop quality and yield.  The government has extended ban on export of pulses till March 31, 2014. But there is an exception with export of kabuli chana, organic pulses and lentils being allowed up to a ceiling of 10,000 metric tonne per annum.  According to the Gujarat’s agricultural department, sowing under moong is reported at 16,400 hectares as on March 18, 2013 compared with 30,300 hectares during the previous year. Outlook: Chana prices are likely to witness a weak tone in the coming days.

Chilli witnessed weak sentiment on new crop arrivals. However, expected lower crop would resist the sharp fall in prices.
At Guntur cold storage, teza seed variety quoted at Rs7,800-8,000 per quintal, Indo-5 at Rs6,500-7,200 per quintal, 334 qualities at Rs5800-6200 a quintal. Red chilli production in Guntur area is lower by 25-30% against last year. Red chilli production in Guntur area is expected around 70-75 lakh bags. However, carry forward stock may be around 20 lakh bags.

Turmeric witnessed weak sentiment. But fresh export as well as domestic demand amid lower output expectations may support prices in near term. Turmeric traded down in major spot markets on higher arrivals and normal demand. Turmeric finger priced at Rs7,800 per quintal in Erode, root variety quoted at Rs6,500 salem per quintal, Salem finger at Rs9,000 per

quintal and salem root at Rs7,500 per quintal. Arrivals stood at 10,000 bags. New unpolished finger variety offered at Rs6,600 per quintal and gatta at Rs6,000 per quintal in Nizamabad. Trade of 18,000 bags was reported in Nizamabad.