1. A comprehensive update on Sp ces 9 June 2010

2. Pepper International Pepper Community has lowered 2010 world pepper output by 9,000 tonnes to 2,70,650 tonnes as compared to 2,79,650 tonnes in 2009 Unfavourable weather condition in Brazil, Indonesia and Vietnam resulted into drop in output Vietnam had shipped 80,000 tonnes of pepper in first 5-months of CY2010 and left with 40,000 tonnes till new crop in 2011

3. Pepper India MG-1 ASTA is at $3650 per tonne while Vietnam ASTA is at $3630 per tonne, Brazil is at $3600 per tonne FOB Belem and Indonesia is at $3675 per tonne FOB Now, rates of all the major pepper producing countries is at par in the international market India being preferred for quality, there are expectations of good demand for Indian pepper Moreover, in the spot market, supplies are remaining limited as sellers are not in a hurry to sell

4. World pepper balance sheet India pepper balance sheet Source : IPC Supply (tonnes)Demand (tonnes) Production2,79,650Consumption3,20,000 Carry forward stocks for 2010 79,124Carry forward stocks for 2011 72,082 Total3,58,774Total3,92,082 Shortage: 33,308 Supply (tonnes)Demand (tonnes) Production40,000Domestic consumption45,000 Imports14,000Exports25,000 Ending stocks of 200911,350Carry forward stocks10,350 Total65,350Total80,350 Shortage: 15,000 Pepper futures are expected to trade on a positive note supported by the fundamental factors of tight supply amid expectations of good demand.

5. Recommendation: Pepper NCDEX: Medium term: Buy in the range 13500-14000 targeting 17000 then 18000 with stop loss at 12000

6. Jeera For 2010, India’s jeera production is estimated to be higher by 11% at 1.5 lakh tonnes Y/Y Syria, Turkey and Iran are the three major Jeera producing countries besides India in the world Syria crop is expected to be same as that of last year to around 25,000 tonnes, while Turkey and Iran crops are expected better than last year to around 15,000 tonnes for each As a result of good crop in major countries—world jeera production is likely to be higher by 13% to 2.14 lakh tonnes Y/Y Syria new crop harvest has started while Turkey and Iran new crop will come to the market July month onwards

7. Jeera Presently, Unjha market—largest market in India—is witnessing a limited arrivals at around 3,000-4,000 bags (1 bag = 60 kg) against 25,000-35,000 bags during peak arrival period (Feb-Apr) Arrivals will start easing from the month of July and this is expected to render some upside support to prices Export demand is remaining steady with demand limited to Middle East countries In the international market, Indian rate is in the range of $2,460-2,600 per tonne while Syria rate is $2,200 per tonne and Turkey rate is $2,240-2,460 per tonne During the monsoon season spot market activity remain subdued with limited participation among buyers and sellers

8. Indian jeera balance sheet * All are trade estimates With supply pressure continuing from the major competitors Syria, Turkey and Iran, export demand is expected to remain steady for Indian jeera as of now Supply (tonnes) Demand ( tonnes) Production 20101,50,000Domestic consumption 1,40,000 Imports 0 Exports (expected by March 2010) 35,000 Carry forward 36,000Ending stocks11,000 Total1,86,000Total1,86,000 Balanced

9. Jeera outlook Near term : Bearish : Weak export demand amid sustained arrivals ; and timely and normal monsoon expectations Long term : Bullish : expectations of export demand by the month of September - October; crop sowing progress will be an important factor to watch for

10. Recommendation: Jeera NCDEX: Buy in the range 11200-11400 targeting 14000 with stop loss below 10000

11. Turmeric Turmeric production in 2009 remained around 2.94 lakh tonnes, down by 20% Y/Y Production in 2010 is expected to up 30% to 3.85 lakh tonnes However, carry-forward stocks are nearly 7,000 tonnes in spot market—resulting to tight supply Arrivals have gradually come down to 500 bags at Nizamabad market and 5000 bags at Erode market (1 bag = 70 kg) Spot rate is hovering around Rs.14,500 per quintal at Nizamabad market and Rs.15,000 per quintal at erode market Export demand is expected to gain by the month of July-August, which might render upside support to prices

12. Turmeric Domestic demand is remaining subdued but market participants are expecting revival in demand at these lower levels in coming days Report of normal and timely monsoon is expected to result in increase in acreage by nearly 30% during this year’s kharif season Last year acreage was around 1.2 lakh hectares During monsoon season supplies decrease further, which might support the rise in prices Monsoon progress across the major growing areas in coming days will be an important factor to watch for If, monsoon remains normal and timely, it might act as a limiting factor for sharp rise in prices

13. India’s turmeric balance sheet * All are trade estimates Turmeric prices are expected to trade higher in coming days supported by the factors of gaining demand amid easing arrival pressure. Export demand is expected to gain in coming days which is also supportive for rise in prices. NCDEX has modified the turmeric contract specifications ; Trading and delivery unit: 5 MT from 10 MT; Tick Size: Rs.2 from Rs.1. This will be in force from 10th June 2010 for all existing contracts. Supply (tonnes)Demand (tonnes) Production3,85,000Domestic consumption3,20,000 Ending stocks of 2009 7,000Exports51,000 Total3,92,000Total4,01,000 Shortage: 9,000

14. Recommendation: Turmeric NCDEX: Buy in the range 13000-13300 targeting 16000 then 16600 with stop loss at 11700

15. Chilli Chilli production for 2010 is expected to be higher by 10% to 13.2 lakh tonnes Y/Y The crop has been good in Andhra Pradesh, but lower in other major chilli producing states namely West Bengal and Tamil Nadu Total number of cold storages in Guntur has increased to 83 this year. Hence, the storage capacity has increased from 50 lakh bags last year to nearly 70 lakh bags this year (1 bag = 35 kg) Despite the increase in number of cold storages, almost all the cold storages are full to their capacity The major market at Guntur was closed for one month from 07 May 2010 to 07 June 2010 due to increasing mercury levels

16. Chilli Market activity is expected to resume gradually in coming days Export demand is expected to be good this year China is one of the major competitor for India and its crop has been estimated to be lower by 40% this year India exports mainly to Malaysia, Bangladesh, Srilanka, U.S.A.,U.A.E. and Pakistan Lower Chinese crop is expected to help sustain the export demand for Indian chilli

17. Balance sheet of India chilli * All are trade estimates Monsoon progress across the major growing areas in coming months can give a fresh direction to prices Supply (tonnes)Demand (tonnes) Production13,20,000Domestic consumption11,50,000 Ending stocks of 2009 50,000Exports2,00,000 Total13,70,000Total13,50,000 Balance: 20,000 Chilli prices are expected to trade higher in coming days as there are expectations of good export demand for Indian chilli due to lower china crop. Arrivals are remaining limited to the physical market as market participants are expecting rise in prices

18. Recommendation: Chilli NCDEX: Buy above 5100 targeting 5600 then 6000 with stop loss at 4300 (or) Sell below 4250 targeting 3700 then 3400 with stop loss at 5000

19. Cardamom Cardamom production in 2009 was lower by 14% to 9,500 tonnes Y/Y Production for 2010 is expected to be higher by 15% to 11,000 tonnes According to market sources, even rise in production in 2010 would fall short of demand due to drop in output in Guatemala During 2009, Guatemala crop was lower by nearly 60% to around7000 tonnes India is the major supplier of cardamom across the globe as of now Hence export demand prospects are very good for Indian cardamom and expected to be sustained till the new crop in 2011

20. Cardamom Cardamom fresh arrival season starts from the month of May and continues till July This year arrivals are remaining limited in the range of 15,000-17,000 kgs against the usual arrivals of 25,000-30,000 kgs during the peak season Active export and domestic demand are the major supporting factors for rise in prices MCX has levied 5% special margin in cash applicable in cardamom contracts effective from 10 June 2010 Thus, special margin on buy side is now 25% and a 5% special margin is also there on sell side

21. Balance sheet: Indian cardamom * All are trade estimates Export demand will remain the major trigger for cardamom prices this year Supply (tonnes)Demand (tonnes) Production11,000Domestic consumption10,000 Ending stocks of 2009 1,000Exports2,000 Total12,000Total12,000 Balanced Cardamom prices are expected to trade higher in coming days as there are expectations of good export demand

22. Recommendation: Cardamom MCX: Buy in the range 1740-1700 levels targeting 2000 then 2100 with stop loss at 1500

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