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Wednesday, April 4, 2007

MARKET REPORT NOV 6TH

Like i previously informed our clients that markets were expected to ease after the Diwali and Ramadan holidays on event of bigger arrivals which did happen in the last week.
However the arrivals are now back to normal and prices have again started to firm up in the last few days due to some demand lately.If you recollect from my previous report in September,i had indicated that the Rupee generally slides in the period of Nov-Jan in line of heavyexports from India that has been the case this year as well.The rupee has slided by over 3% against the US$ in the past 2 weeks and continues to slide even today,this automatically makes the export that much more expensive even if the local prices stay the same.
We have not yet seen the local winter demand in India or heavy stocking at current levels but we assume
that it may start very soon to add stability to local prices. I agree to that fact that China has a good crop and Africa looks good till now as well but there are still 2 month before African crop is out and a little more period before that will
create any impact on international prices. Africa has also witnessed high prices in the last two years so it is unlikely
they would be eager sellers at throwaway prices too, china in the past has surprised us all and with theirNew Year falling in Jan they may end up using a majority of their crop and might come back for shopping later in the season once again , Chinese are known to have sudden quantum jumps in their demand in the past whichhas virtually turned them from a net exporter to a net consumer country.
If by Dec-Jan India does manage to sell a substantial quantity then it could be a tough year ahead as the stockiest
will not part with their stocks at lower levels than today's. We also have to keep in mind that the groundnut, Sunflower
and Mustard crop is not very big this year in India and their prices are on the higher levels as well , so if sesame prices fall any further , sesame may get diverted to the crushing factories as the oil content is much more that other oil seeds and the oil can then be used for blending with other expensive grades.
If the farmers do manage to keep the current prices going till Dec-Jan after which the crop is mostly in the hands of
stockiest and exporters it could create a tricky situation. I believe most buyers have held back their demand in anticipationof falling prices and i can only hope that everyone does not step in the market together anytime soon.
We are in no way trying to indicate that prices may shoot up but merely stating a few points which we come across locally , we have in the past said that prices are likely to remain stable and firm with periodic up's and down this year and overall we still think that the Yearly Average Price of your purchase is unlikely to go below current levels in all account , unless something drastic happens in the coming few months.

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