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Wednesday, April 4, 2007

KOREAN TENDER MARKET REPORT 5th MARCH

The much awaited Korean Tender was finally declared today.
As expected India was awarded all 6000 MT , however surprisingly this time there is a huge price band( $ 906 - $958 ) in which the tender has moved , clearly showing that the gap between India and African/Pakistan prices have now grown substantially and that the market is now ready to accept higher and all possible price levels.
1000 MT @ $906
1000 MT @ $910
500 MT @ $923
500 MT @ $928
1000 MT @ $929
500 MT @ $941
1500 MT @ $958
6000 Mt Total
Interestingly all other origins were well above $ 1000 Levels and that too for much smaller quantities.It is now clear that Africa does not have the usual crop size ,they have come out with revised crop estimates which put their crop to just about 70-80% of last year levels.If we take the Korean Tender and African Prices as benchmark , it still leaves India a whooping $100 cheaper and that much more window to increase at the leastin the coming months.
Sources/Rumors have it that new Korean tenders will also be floated in the coming 4 months , for 5000 MT + quantities each, that has put a lot of pressure on the market already as the current stocks may be barely enough to accommodate these quantities and normal demand at best. Even last year the Korean tenders picked up about 15,000 MT in the period April- Sep, this figure is most likely to be much more this year looking at the sesame crop scenario outside India.
Markets continue to remain bullish and firm.Prices as we all know have touched new heights and still show no sigh of slowing down. We still believe that there is enough stocks in the market to keep us going till the arrival of next new crop but just enough.By normal demand India should export around 100,000 MT in the period Apr-September which is all with strong stockiest now as arrivals have virtually stopped in the markets now.
We did point out some major points which could be crucial in determining the prices in our last report and each and unfortunately each and everyone has made an impact.Prices have risen by almost 20% since the start of the season giving the Stockiest a huge advantage and strength to further hold on for longer periods. We still think that it would be highly optimistic to believe that one can get huge discounted viz a viz current levels in the coming months.
Everyone ask's " What do you think will be the highest level this year ?" , I wish I knew the answers to that , " Are the current levels overpriced ?" , To this I can confidently say NO , they are not. We have seen that the prices rise very quickly and then stagnate for week/month before another jump , giving us all a false re-assurance that they are sliding when indeed they are just bottoming out , this should continue to be the trend in the coming months and the jumps as we all know are in quantum of 50-100$ each time so even with just a few hiccups in the next 6 months we may see prices touch new highs. I think at current levels the market at max may drop 2-3 % but to gain there is a lot lot more.
Here we are not even taking into account the probable return of Chinese Demand later in the season, possibility of next 3-4 Korean Tender each going to India and also the month of Ramadan which again starts in September this year, the shopping for which should start anytime around July/August. We wont have the new crop by then so once again the demand will have to be substituted with the current crop and just as we saw last year the prices took a huge leap in the later month when the Ramadan demand from Middle East/Indonesia, Turkey and Lebanon set in. This year should not be any different.
Markets are sounding bullish and we are no different. However I would still say there definitely would be some openings to get a good bargain in the market when smaller players decide to book profits and exit the market.It is very important to keep a close watch on the markets from now on as you may see your desired price levels but may not get the desired quantity at those levels.

2 comments:

Anonymous said...

Nice reports mate , keep it up.

Anonymous said...

Good job mukul we agree with you