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Thursday, December 20, 2007

Korean Tender 20th December

The Korean Tender for the month of December was officially announced today.
Surprisingly India received all 3500 MT . The price range was as below
500 MT @ USD 1441
500 MT @ USD 1469
500 MT @ USD 1469
1500 MT @ USD 1475
500 MT @ USD 1275 , 90/10 Quality.
Once again the surprising factor remains the absence of aggressive African Bid ,Pakistan as we had discussed
previously seems to be out of action this year.As we mentioned in our past reports the African's we believe are
more content feeding the Chinese demand and are still not eager sellers at lower prices.
The price at which this Tender was taken by India also does not reflect the existing market situation here,
It seems like this tender is more of a average price which the bidding companies have managed to make over the
last 2 months and a effort to test the market sentiments .
The African prices evidently are still much higher and despite the fact that compared to last tender the prices are up
by about $350 already it still leaves a little more to achieve for the next one. The next Tender is rumored to be in
Early Jan for about 6000 Mt.
Market sentiments remain bullish in India on long term , once again periodic corrections cannot be ruled out.
Market was very quite for the past 10 days and despite that we did not witness any big fall , it just moved
sideways most of the time with occasional ups and down depending upon demand justifying the fact that
the market base is strong this year.The scary part remains that despite almost 80 days since new crop
arrivals started not once did we see the markets slide in the natural course due to heavy or excess arrivals.
The small corrections that we did notice were more because of market sentiments from time to time.
Whenever the prices dropped the arrivals went down in correlation as the farmers seem to be very well
connected with day to day movements in the market now.
Arrivals have been very steady for the last 2 months and in the last 2 weeks have started to go down as well ,
which is ofcourse the normal trend every year, arrivals will carry on till Jan after which the game shifts to the stocks.
Prices have shot up by almost 40-45% and we doubt that the crop is being held back at farm levels. A lot of
profit booking has already happened on the stocks as well and now the existing stocks are most probably
of the Mid level range.The stocks this year seem to be in the hands of Big players with good holding
power and with 10 months to go before the next arrivals we don't see them panicking anytime soon,
specially when they have already taken part of their profits home.
We must also take the fact into consideration that this year almost everyone sooner or later did cover all their sales
in advance creating a cash flow problem so not much buying is happening at the moment locally and not much business
has been done for long term so that buying is yet to come in later around Jan End/Feb once the old orders finish.
We must also acknowledge that fact that as on date the suppliers and Stockiest from India still have a average to play with ,
whereas the Africans started their crop with Zero carry over and at very high levels , that means their stocking
is also being done at much higher levels.Indian prices will fall only if African prices go down but if African prices
go down that would mean that 100 % of the stockiest and sellers there would be making a loss. What are the
chances that Africa suddenly drops their prices by few hundred $'s just to sell and make a huge loss
rather than wait for a few months for the demand to pick up during Ramadan or wait for Chinese demand to
resume later in the season ,specially when they know their crop and the global crop is weaker compared to last year.
We look forward to your comments and queries and hope to continue serving you trustfully as always.
We wish everyone a A MERRY XMAS and a VERY HAPPY NEW YEAR.

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