May 30, 2012 / 1:57 PM / 5 years ago

Indian spices decline; stocks drag turmeric

MUMBAI, May 30 (Reuters) - Turmeric futures in India fell on Wednesday on mounting stocks with farmers and traders on increased output, after farmers expanded area under cultivation lured by higher prices.

* The June turmeric contract on the National Commodity and Derivatives Exchange fell 1.87 percent to end at 3,676 rupees per 100 kg.

* Although farmers have held back supplies in spot market on hopes of better prices, they are still higher-than-expected, traders said.

* “Fundamentals are weak in turmeric and would keep prices under pressure in the short term. Prices may fall to 3,300 rupees per 100 kg in next 4-5 days,” said C.P. Krishnan, director at Geojit Comtrade.

* Spot turmeric in the Nizamabad market, a key market in the southern state of Andhra Pradesh, fell 36 rupees to close at 3,569 rupees per 100 kg.

JEERA DROPS

Cumin seed, or jeera, futures fell as tepid overseas demand coupled with sluggish trading activities in spot, dampened sentiment, outweighing thin supplies.

* The June contract dropped 0.59 percent to close at 12,705 rupees per 100 kg.

* “Export demand is weak at these levels as buyers are awaiting further fall in prices. Prices may fall by another 200-300 rupees per 100 kg from the current levels,” said Samir Mahendra Shah, a trader from Unjha, a key market in the western state of Gujarat.

* In Unjha, the spot price fell 16 rupees to 13,460 rupees per 100 kg.

* Arrivals at Unjha fell to around 8,000 bags of 60 kg each on Wednesday from 10,000-12,000 bags daily in the previous week.

PEPPER

Pepper futures ended lower as high prices kept export demand weak but a squeeze in supplies and depleting stocks restricted the downside.

* Indian pepper is $300 to $350 a tonne costlier than those from rivals such as Vietnam, Brazil and Indonesia, traders said.

* The most active pepper for June delivery ended 0.79 percent lower at 39,545 rupees per 100 kg.

* “Market is consolidating at these levels. Fluctuation in the rupee is affecting margins of exporters and keeping the trade thin,” said Geojit Comtrade’s Krishnan.

* He expects pepper June contract to trade in the range of 38,600-41,000 rupees per 100 kg for next 4-5 days.

* Industry officials estimate 43,000-45,000 tonnes of local pepper output in 2012, compared with 49,000 tonnes last year.

* At Kochi, in southern Indian Kerala state, spot pepper dropped 195 rupees to close at 39,183 rupees per 100 kg. (Reporting by Meenakshi Sharma; editing by Malini Menon)

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