Search This Blog

Wednesday, April 4, 2007

Price Rise Report November

have complied a few reason for the sudden price rise for your assessment.
A:-
Like i mentioned in my previous reports the local demand which was very quite suddenly picked up and buying started at all levels ,although the demand is not huge but still since it came all too sudden and that created a panic among in the sellers , specially the Sun Dry factories which had sold quite a volume for exports now did not have much spare capacity for Nov/Dec delivery and hence got very good premium on prices from the local market.

B:-
The stockiest also decided that previous weeks levels were lowest and stepped in to buy as well. Heavy stocking was seen on all sectors including stockiest from the Gujrat/Maharastra region where the crop is less , so it is highly unlikely that further down in the season we will see very lowlevels again.

C:
Few of the buyers panicked as well , some which had held back their spot buying for a better price till very last moment also stepped in. I mentioned in my previous report that if all buyers step in together it could create a tricky
situation and that is almost what happened last week.

D:-
Rupee went up almost 3% against the US$ in just 1 week adding to the problems.

F:-
News of a 6500 MT Korean Tender on 20th Nov created some ripples as well as few of the regular Tender players were seen covering from the markets. If India does get this tender it could boost the confidence of traders once more
as all the news of African carry over stocks and low prices for new crop will then be nullified since the delivery for this tender is upto Jan 2007 well after the new crop arrival of African crop.

G:-
The arrivals have also gone down substantially and it seems like all the news of a Bumper crop in U.P and MP region are not all that true , we still have a good crop but nothing in the range of expectation of 200,000 MT , it is more likely around 150,000 Mt.

Overall it was a panic situation last week and definitely not good for the trade,i am sure a lot of Sellers and Buyers were caught off guard by this sudden market change,but that's how it is in the Indian market , i think we will see such panic situation more in the coming months based on various situations then.

No comments: