MUMBAI (Commoditiescontrol) - Red chilli prices ended the weak (Oct 9-13) on subdued note amid slow off take, whereas Coriander prices managed to end in positive territory due to ome good demand amid fesival season, although the overall prices are down as compared to previous one year as the market activities are affected after the implementation of the new tax regime Goods and Service Tax (GST) and pretty balanced supply-demand.
As per the market sources from Mumbai (Vashi APMC) –GST has proved to be a double whammy due to its confusing structure and has badly hit the wholesale spice market. Export business has come around by 20% and domestic sale has dropped by 80%.
Many traders have made their mind to shut down their business this include not only small players but also a few bigger fish in the market, they added.
RED CHILLI: Spot Red Chilli ended with a weak tone during the week as the market activities were affected due to the strike of traders and commission agents against E-Nam (Electronic National Agriculture Market). The market was closed for more than a month and started from this week Monday.
Red Chill was the most exported spices recorded in the first quarter of the fiscal year 2017-18, but later the export was affected by the implementation of new tax regime GST and later by the strike.
Red Chilli stock in the cold storages of Guntur is recorded around 45 lakh bags (40Kg each) as compared to 25 lakh bags during the same period last year.
As per a trader from khargone, Red chilli production in Madhya Pradesh is expected to decline to 4-5 lakh bags (35kg each) against 10-12 lakh bags last year.
Red Chilli fundamentals are not very promising due to sufficient stock is available in the domestic market due to glut production last year, but the demand is expected to pick up the pace from here due to empty pipeline and prospects of crop failure in Madhya Pradesh and even in few pockets of Andhra Pradesh.
Red chilli crop loss in Madhya Pradesh is significant due to heavy rainfall during key growth stages and then at harvest stage leading to severe virus attack distroying major portion of crop. According to local trade experts, Red chilli output could fall to 4-5 lakh bags (35kg each) only against 10-12 lakh bags.
Further, as per yesterday’s report by market sources, crop in Kurnool, Kadapa and Nandyala area of Andhra Pradesh got affected by heavy rainfall.
The prices are still not getting any major jump due to good stocks at major production centers, however future outlook is expected to improve amid rising export followed by prospects of lower production in 2017-18.
Coriander: Coriander prices at the benchmark Kota market of Gujarat improved a little in the week ending on Friday due to good domestic demand witnessed against decreasing arrivals.
Coriander prices has dropped around 38% as compared to same period last year due to the higher production this year followed by subdued domestic demand.
As mentioned earlier in the report domestic demand was affected by the implementation of GST as the traders are still not clear with the structure and has no clarity on refund of the GST paid.
Earlier, demand in coriander by the domestic buyers declined as the major market participants started importing stock from the competitors of India like Syria, Turkey due to cheaper availability and better quality.
Coriander outlook is not promising as ample stock is available in the domestic market as well as in the accredited exchanges warehouses. Sowing of Coriander is expected to start in next couple of days, may be even has started in few parts, but the pace likely to increase next week-end.
Coriander acreage in the country is expected to decline due to poor rates in the last couple of years, and farmers may shift to other better remunerative crops like Jeera, however it could be not more than 5-10% as farmers have few choices in major producing belts.
On the National Commodity and Derivative Exchange Limited (NCDEX) prices of the most active November contract declined by 1.46% during the week as the speculators were engaged in trimming their position due to prospects of uncertain future outlook.
Sowing of Coriander will start after Diwali in the producing belts across the country and area in Coriander is expected to decline this year as farmers will switch to Jeera, Chana for better remuneration, trade sources said.
(By Commoditiescontrol Bureau; +91-22-40015533)
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