India: Desperate rescue attempts
November 17, 2016 at 1:22 PM ,
Der AUDITOR
Last week the government decided to ban Rs 500 and 1,000 bank notes and introduced a withdrawal limit of Rs 20,000. Since the impact on the markets is enormous the government has now eased regulations. Farmers and registered traders are now permitted to withdraw up to Rs 50,000 per week and the deadline for the payment of crop insurances has been extended. These measures are meant to ensure that sowing takes place without the farmers running out of cash.
Turmeric
The traders are trying to pay the farmers with cheques or banned bank notes. The farmers are, however, insisting on cash payments with legal notes thereby leaving the traders requiring new stocks to exchange their bank notes. Although turmeric traded stable this week the promising crop outlook may soon weigh on sentiments.
Cardamom
Although trading was very limited this week, the prices for cardamom have nevertheless increased amid limited arrivals and stable demand. Analysts expect further increases as the outlook for the crop is not very optimistic. Cardamom, 8mm is currently trading on a level of 19,000-19,100 USD/mt FOB.
Black pepper
Rumour has it that Vietnam has lowered its pepper prices in an attempt to enhance export activities as production is likely to increase to more than 200,000 mt. The prices in India are, therefore, likely to drop.
Mustard seeds
The market witnessed marginal drops this week. This year acreage in the rabi season is set to increase by 57% as compared to last year, which may weigh on prices. But industrial buyers have pushed up demand in the physical market, which is why the market is expected to trade sideways to higher. Demand for mustard oil is also expected to increase over the winter, which may push prices further up in the near future. Mustard seeds, micro machine bold are currently trading for 726-736 USD/mt FOB.
Chili
Sluggish demand has led to stable prices this week since the stockiest are waiting for the quality of the crop to improve and for better rates. They require red chili with low moisture for cold storage. The new crop is, however, still too moist. The supply and quality is only expected to improve by the end of the month.
Please find attached the current prices.
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