Saturday, September 24, 2011
Thursday, September 15, 2011
Market Report Sesame Seed September 15th 2011
Hi Everybody
It’s that time of the year again when we spend more time on the internet searching for news about sesame than actually buying/selling it Here is my contribution to the search.
After a very dull and boring 3 years we finally have some movement and excitement back in the trade. Prices remained almost stable over the past few seasons, moving within a set price band.
What will be the Indian crop size this year? How much is the carry forward stock?
How much will China buy? How is their crop?
What is happening to the crop and prices in Africa?
These are a few nagging questions in everyone’s mind along with of course the most important question “ What is the RIGHT time and PRICE to buy” . I wish I knew the correct answer to any of these question (It sure could make me some money) but unfortunately I don’t so we play the guessing game like always. All of you probably have the numbers and figures from elsewhere but here is my version.
1:- CARRY OVER STOCKS :
Last year the crop was estimated to about 350,000 MT + we had about 70,000 Mt in summer crop that makes it around 420,000 MT crop in the past 11 month. The exports from India did increase substantially and between April 2010 – March 2011 we exported about 340,000 MT.
If we take the export numbers between Oct 2010- September 2011, I think it should be roughly the same as well . This means our carryover stocks should not be more than 30-40,000 Mt at this point of time. ( I know the numbers don’t add up but assuming that India exported a lot of hulled , I am adding 20-25 % extra for the raw material yield loss in making hulled Sesame )
So the carryover stocks are nothing big if you distribute it between 100’s of small stockist who are probably holding onto 50 or 100 mt each , and these are stubborn cash rich stockist who will not sell the cargo unless they are making good profits.
That means irrespective of what price is India will have enough sesame to keep their factories running and exporters busy till new crop arrives around Mid of October.
No comments on the Quality though.
2:- NEW CROP :---
hmmmm...20% less...25-30%..i’ve even heard the number to be 40%-50%. Which one will hold true we’ll only know when the full crop is harvested by end of November. However if i were to put a number i would say less by at least 30-35% . It’s been raining cats and dogs in some sesame growing regions of Gujarat and Rajasthan even till last week and that is bound to created damage.
UP and MP sowing was very promising to start with but as rains played spoilsport we heard many farmers gave up on sesame crop. Just last week there was a report that Soyabean crop estimates in MP were revised downward due to rain damage, my guess is if soya crop is damaged due to rains the sesame plant surely will be as well. However since the sowing area had increased whatever damage we had was compensated to quite an extent. So if I had to put a number on the crop i would say
Last year 340,000 – 35% =220,000 Mt . I would assume anything between 200,000 -225,000 in realistic terms.
We’ve had a very good monsoon this year, which usually means a very cold and good winter season so the domestic consumption of sesame should be healthy this year as well. But that apart the mere fact that the crop is less with get the stockist and traders back in action and huge crop will end up in stocks creating an artificially void or demand when the new crop arrives.
3:- SITUATION IN THE PAST 3 MONTHS
Prices in Indian rupee terms have gone up by almost 20% in the past 3 months , all the stockist which were sitting on high prices cargo and contemplating losses got a chance to exit and that renewed their confidence that if you wait sesame stocks ultimately pays back. This confidence im sure will come into picture when they are active again during the new crop.
The USD has been very strong , up almost 8-9% over the past 2 months which have made the prices in $ terms look not that dramatic , however this could change very quickly is the rupee is stronger again , not to mention that ocean freights have been rising slowly and steadily as well and tend to peak during the Nov-Feb period.
The Korean Tenders as well all know is now part of the export numbers from India . With the complicated payment terms and strict quality and delivery schedule it is unlikely that Africa will we participating aggressively . So keep aside about 50,000 MT for the Korean Tender from this crop.
CHINA...Will they buy...ofcourse they will , when , how much , at what price , i don’t know but they have too. They have found out a way to get the Hulled into china from India and the numbers can only grow this year. Their crop is estimated to be slightly smaller than last year and the demand continues to rise. If prices go up in India , same will happen in Africa as well ,infact over the past 2 yrs African prices have always remained above India and there is no reason to belive that they will sell at a discounted prices this year. So if the difference between Indian and African prices remains China will continue to cover part of the requirement from India as well.
4: - GLOBAL SCENARIO
I’m no expert on African crop but from what i have heard they have just enough stocks to work with till their new crop arrives and with no significant increase in sowing area and not so favorable climate in growing countries I presume that their crop size will not be any bigger than in past.
The buying pattern though seems to have changed over the past few years. Earlier we saw that the buyers would almost stop buying from July/August onwards and would finish all their stocks by September/October and then come out aggressively in Oct-Nov to cover, now they are buying old crop all the way till October shipment. It has partially to do with the growth of infrastructure and machine upgrades and partially as everyone wants to work back to back now, rather than keep open positions for too long. This means we might not see the mad rush to buy on new crop as most Indian stockist and exporters are anticipating. However it is also true that most destinations are not holding big stocks and will have to buy regularly.
5:- BULLISH YEAR
Certainly looks like one. Most exporters will not sell too far forward this year , they did that in 2007 , almost all Indian exporters honoured their contracts , even though they local suppliers defaulted , but after 3 boring tough year I doubt they are in the same state of mind.
I’m sure there are some eager beavers who would want to speculate and sell forward with open contracts but I assure you if the prices jump the way they did in 2007-08 we will see a lot more defaults that we did back then. So pick and choose your supplier carefully.
Conclusion:
We expect the market to remain firm & bullish at least till the new crop arrivals start coming in. With Diwali this year on 26th October I don’t expect the volumes to pick up before that. That also makes it very tricky, if the arrivals before Diwali are small , most people would assume that they will increase up after Diwali and will wait but if the arrivals don’t increase significantly then KAAAAABOOOOM Hard choices , hope you make the right one.
As usual, currency fluctuation is a vital influencing factor.
It’s that time of the year again when we spend more time on the internet searching for news about sesame than actually buying/selling it Here is my contribution to the search.
After a very dull and boring 3 years we finally have some movement and excitement back in the trade. Prices remained almost stable over the past few seasons, moving within a set price band.
What will be the Indian crop size this year? How much is the carry forward stock?
How much will China buy? How is their crop?
What is happening to the crop and prices in Africa?
These are a few nagging questions in everyone’s mind along with of course the most important question “ What is the RIGHT time and PRICE to buy” . I wish I knew the correct answer to any of these question (It sure could make me some money) but unfortunately I don’t so we play the guessing game like always. All of you probably have the numbers and figures from elsewhere but here is my version.
1:- CARRY OVER STOCKS :
Last year the crop was estimated to about 350,000 MT + we had about 70,000 Mt in summer crop that makes it around 420,000 MT crop in the past 11 month. The exports from India did increase substantially and between April 2010 – March 2011 we exported about 340,000 MT.
If we take the export numbers between Oct 2010- September 2011, I think it should be roughly the same as well . This means our carryover stocks should not be more than 30-40,000 Mt at this point of time. ( I know the numbers don’t add up but assuming that India exported a lot of hulled , I am adding 20-25 % extra for the raw material yield loss in making hulled Sesame )
So the carryover stocks are nothing big if you distribute it between 100’s of small stockist who are probably holding onto 50 or 100 mt each , and these are stubborn cash rich stockist who will not sell the cargo unless they are making good profits.
That means irrespective of what price is India will have enough sesame to keep their factories running and exporters busy till new crop arrives around Mid of October.
No comments on the Quality though.
2:- NEW CROP :---
hmmmm...20% less...25-30%..i’ve even heard the number to be 40%-50%. Which one will hold true we’ll only know when the full crop is harvested by end of November. However if i were to put a number i would say less by at least 30-35% . It’s been raining cats and dogs in some sesame growing regions of Gujarat and Rajasthan even till last week and that is bound to created damage.
UP and MP sowing was very promising to start with but as rains played spoilsport we heard many farmers gave up on sesame crop. Just last week there was a report that Soyabean crop estimates in MP were revised downward due to rain damage, my guess is if soya crop is damaged due to rains the sesame plant surely will be as well. However since the sowing area had increased whatever damage we had was compensated to quite an extent. So if I had to put a number on the crop i would say
Last year 340,000 – 35% =220,000 Mt . I would assume anything between 200,000 -225,000 in realistic terms.
We’ve had a very good monsoon this year, which usually means a very cold and good winter season so the domestic consumption of sesame should be healthy this year as well. But that apart the mere fact that the crop is less with get the stockist and traders back in action and huge crop will end up in stocks creating an artificially void or demand when the new crop arrives.
3:- SITUATION IN THE PAST 3 MONTHS
Prices in Indian rupee terms have gone up by almost 20% in the past 3 months , all the stockist which were sitting on high prices cargo and contemplating losses got a chance to exit and that renewed their confidence that if you wait sesame stocks ultimately pays back. This confidence im sure will come into picture when they are active again during the new crop.
The USD has been very strong , up almost 8-9% over the past 2 months which have made the prices in $ terms look not that dramatic , however this could change very quickly is the rupee is stronger again , not to mention that ocean freights have been rising slowly and steadily as well and tend to peak during the Nov-Feb period.
The Korean Tenders as well all know is now part of the export numbers from India . With the complicated payment terms and strict quality and delivery schedule it is unlikely that Africa will we participating aggressively . So keep aside about 50,000 MT for the Korean Tender from this crop.
CHINA...Will they buy...ofcourse they will , when , how much , at what price , i don’t know but they have too. They have found out a way to get the Hulled into china from India and the numbers can only grow this year. Their crop is estimated to be slightly smaller than last year and the demand continues to rise. If prices go up in India , same will happen in Africa as well ,infact over the past 2 yrs African prices have always remained above India and there is no reason to belive that they will sell at a discounted prices this year. So if the difference between Indian and African prices remains China will continue to cover part of the requirement from India as well.
4: - GLOBAL SCENARIO
I’m no expert on African crop but from what i have heard they have just enough stocks to work with till their new crop arrives and with no significant increase in sowing area and not so favorable climate in growing countries I presume that their crop size will not be any bigger than in past.
The buying pattern though seems to have changed over the past few years. Earlier we saw that the buyers would almost stop buying from July/August onwards and would finish all their stocks by September/October and then come out aggressively in Oct-Nov to cover, now they are buying old crop all the way till October shipment. It has partially to do with the growth of infrastructure and machine upgrades and partially as everyone wants to work back to back now, rather than keep open positions for too long. This means we might not see the mad rush to buy on new crop as most Indian stockist and exporters are anticipating. However it is also true that most destinations are not holding big stocks and will have to buy regularly.
5:- BULLISH YEAR
Certainly looks like one. Most exporters will not sell too far forward this year , they did that in 2007 , almost all Indian exporters honoured their contracts , even though they local suppliers defaulted , but after 3 boring tough year I doubt they are in the same state of mind.
I’m sure there are some eager beavers who would want to speculate and sell forward with open contracts but I assure you if the prices jump the way they did in 2007-08 we will see a lot more defaults that we did back then. So pick and choose your supplier carefully.
Conclusion:
We expect the market to remain firm & bullish at least till the new crop arrivals start coming in. With Diwali this year on 26th October I don’t expect the volumes to pick up before that. That also makes it very tricky, if the arrivals before Diwali are small , most people would assume that they will increase up after Diwali and will wait but if the arrivals don’t increase significantly then KAAAAABOOOOM Hard choices , hope you make the right one.
As usual, currency fluctuation is a vital influencing factor.
Wednesday, June 1, 2011
Monsoon Map
From the predictions once again the Govt says the monsoon is on time...will be normal etc etc . They love to paint a rosy picture but the past has taught us that more often than not they are wrong with their predictions.
You find below the actual Monsoon progression as on June 1st. Its running a bit late and with the intense heat and dry weather through out the sesame sowing area ( I was in gujrat , MP and U.P ) the field are empty and dry and will need a few days of rains before the sowing can start.
My feeling again this year for the crop to be a little late. Will keep the blog updated for anymore developments
Saturday, November 13, 2010
New common market pact threatens sesame export from Ethiopia
The ASEAN pact negotiations, the new common market, will be a threat to the Ethiopian sesame export.
Currently, negotiations are taking place between Middle East and Asian countries to form a new common market in order to export tax free. The negotiations are expected to conclude this fiscal year and would affect Ethiopia's sesame exports to China, the major buyer of the seed
India, the largest sesame seed producer and exporter, is one of the members of the new common market group.
Ethiopia is one of the top four sesame seed producing countries. The commodity is the country's second largest export following coffee. It has been sold under the Ethiopian Commodity Exchange since last May.
Ethiopia has an attractive portfolio of high value, specialty sesame seeds for the export market, according to different studies. The new Asian countries' pact is expected to increase the price of seeds exported to China and other Asian countries, according to sector traders.
"The government will support the sector aggressively through its embassies to expand new markets, before a crisis comes," said Mussie Yackob(PhD), president of the Ethiopian Pulses, Oilseeds and Spices Processors Exporters Association (EPOSPEA).
EPOSPEA celebrated exporters' day in the presence of government officials and members of the association at the Hilton Hotel last Monday. About 90% of oilseeds, pulses and spices are exported by the members of this association which has around 80 active members.
Ethiopia exported about 4.4 million quintals of oilseeds, pulses and spices in the last budget year, which is 493% higher than five years ago.
During the same year, the country earned 446 million dollar from the export sector, which was a record for the country. According to the sector experts, this growth is 20% higher than exports from the previous year. The experts admit that the international financial crisis has influenced most of the country's exports.
Currently, negotiations are taking place between Middle East and Asian countries to form a new common market in order to export tax free. The negotiations are expected to conclude this fiscal year and would affect Ethiopia's sesame exports to China, the major buyer of the seed
India, the largest sesame seed producer and exporter, is one of the members of the new common market group.
Ethiopia is one of the top four sesame seed producing countries. The commodity is the country's second largest export following coffee. It has been sold under the Ethiopian Commodity Exchange since last May.
Ethiopia has an attractive portfolio of high value, specialty sesame seeds for the export market, according to different studies. The new Asian countries' pact is expected to increase the price of seeds exported to China and other Asian countries, according to sector traders.
"The government will support the sector aggressively through its embassies to expand new markets, before a crisis comes," said Mussie Yackob(PhD), president of the Ethiopian Pulses, Oilseeds and Spices Processors Exporters Association (EPOSPEA).
EPOSPEA celebrated exporters' day in the presence of government officials and members of the association at the Hilton Hotel last Monday. About 90% of oilseeds, pulses and spices are exported by the members of this association which has around 80 active members.
Ethiopia exported about 4.4 million quintals of oilseeds, pulses and spices in the last budget year, which is 493% higher than five years ago.
During the same year, the country earned 446 million dollar from the export sector, which was a record for the country. According to the sector experts, this growth is 20% higher than exports from the previous year. The experts admit that the international financial crisis has influenced most of the country's exports.
Monday, August 2, 2010
Wednesday, July 28, 2010
Market Report 28th July 2010
1:- Markets remained stableand were range bound in $1550-$1650 FOB for Hulled Sesame for most past of this season. We had a big summer crop in Gujrat but even that did not get the markets to crash so we figured there was a bottom being formed there.
2:- Stockist held onto their high priced stocks and decided they will take a chance with the next crop rather than offloading the cargo at lower levels in May/June and the supplies became limited and the prices stable.
3:- News of Korean Tender does create ripples everytime it is announced and did the same in early July as well , however the situation compounded with sudden renewed demand from China and Turkey and news that the Chinese crop was damaged . The figures of damage range from 50% to 20% so our fair estimate is that the damage is somewhere between 20-30%.
4:- The monsoons in India got delayed and some sesame growing area’s got very heavy rainfall and there could be a crop shift there , while in states like Gujarat and Rajasthan there is bound to be a crop shift to Cotton and Groundnut by the farmers as those crops are yielding better returns for them.
5:- Some African crops have been damaged as well and there is not much carry over stock in Africa too and with the Ramadan demand next month those stocks are likely to be further depleted. Prices have already jumped significantly there and are unlikely to drop as fast as they do in India.
6:- Last 3 weeks have seen a price jump of almost 15% and that has given the stockiest hope and strength once more to hold on and it is highly unlikely they will sell in panic anytime soon , Yes in some cases where the stocks changed hands , the new high price owner might panic and sell but those may not be too many in numbers and volume.
7:- Atleast one Korean Tender will most likely be announced before the new crop and that means a good 7-8000 MT has to be shipped out from current stocks.
8:- New crop is unlikely to come out in full swing before Mid Oct and by then the China story will be very clear and if the rumours hold true im afraid we could end up seeing a situation like 2007 all over again.
9:- Indian crop size in most probability will not be any bigger in size than previous years and some buyer’s fail to notice that despite low demand from china and turkey that crop size hasbarely been enough to last a full year unless we have a bumper summer crop . We’ve not had any big carry over’s despite the fall in export volumes over the past 2 years and even a 20% fall in Chinese crop means they would need about 100,000 Mt additionally , weather its from India or Africa is another story , which is more than 1/3rd of India’s October Harvest if we assume the crop size will be around 260,000 MT (same as last year).
10:- Our data analysis for the past 10 yrs show that on new crop the prices drop about 10-15% initially over the closing September levels and then move up again ( Drastically in last few yrs and gradually before That) , in either case if we assume that the situation will be same this year the stockists are bound to latch onto the 10-15% decline very very quickly as those levels will seem very attractive compared to the Prices in the last few yrs.
11:- Another reason should be that everyone who is still stuck at high levels stocks would want to average out their purchase by tring to cover more and more at lower levels.
12:- Everyone knows that the stocks at destinations are not too big either as most buyers have been moving back 2 back most of this season , the demand has to return and buyer’s have to buy, when and how much and at what levels they will decide to step in is the question.
13:- Overall our assessment is that we may see some dips from time to time but on lower levels we see a very strong resistance at $1600 FOB levels and on the higher side its anyone’s guess .
14:- The USD is also likely to play a major role as it always has , we saw it go down to Rs 44.50 levels before bouncing back to Rs 47.50 levels again and currently its back to Rs 46.70 levels. Hopefully it will remain high and help the exporters keep the prices competitive.
Its still to early to predict the new crop situation but judging the farmers sentiments and the monsoon position we don’t see the crop size to be bigger than last year in anycase. Our estimates of current stocks in India is about 30-40,000 MT at most and that is spread between so many people its hard to judge how many will hold on and how many will finish their’s before the new crop.
If the news from China and Africa are correct , yes we are bullish for the coming season , if not still I believe the prices might remain range bound between $1600 -$1900 in any case.
Monday, April 12, 2010
Market Report 12th April 2010
Hello Everyone,
Its been a long time since I updated the market reports but as we all know there was very little action in the market to write anyways.
Last few weeks ofcourse has seen some serious action and now everyone is back on their toes trying to study the market and predicting the direction. Lets first look into the scenario that unfolded in the past 6 months i.e after the new crop.
1:- As everyone predicted and expected the crop was fairly good although not as big as the last crop but definitely a good sized one which could have sustained and fed the export demand well.
2:- We started on a low key and the crop was a little late but on anticipation of a good crop the exporters offered low levels which were fair priced enough for the buyers and they took in a good quantity.
3:- Then the usual Indian market mischief happened and prices shot up by 15-20% in 2 weeks time and everyone who was short was caught off guard.The stockist thought it was a repeat of the year before and speculated that the prices will go even higher thus hoarded the crop in a big way. Result was that the demand suddenly shifted towards Africa and prices started to come down slowly, however the stockist continued to buy trying to make an average.Even the farmers held back the crop and brought in less every time prices tried to go down.
4:- The Korean Tenders came and went, India got a substantial quantity but with even bigger stocks its failed to create any ripples.In fact prices move up in anticipation every time the Tender is announced and fail to continue the upward move even after the tender is declared as the bidders are mostly covered or prefer to wait a while before covering themselves rather than rushing into buying as they normally did in the past.
5:- Then came the big bang , Chinese demand was supposed to return after their new year break but all the waiting and expectations were dashed after they came ...they saw ...but they didn't buy.
6:- Stockists still held their nerves , in fact even as i speak they are still optimistic. The reason being that in line previous years where stocks were being held largely but corporate giants and exporters this year the stocking happened at very low levels Farmers , middleman , village level suppliers , yard based stockist etc with factories and exporters keeping very little in hand.
7:- Now when everyone See's that the demand is fairly low and the new Gujarat Summer crop ( Last yr is was about 60-70,000 Mt , this year should be 40-50,000 MT as well , I presume lower crop due to very very dry climate and lower sentiments in farmers due to prices) there is a bit of a panic and a lot of suppliers want to finish off their stocks so its kind of a fire sale going on right now.
8:- The USD has fallen to the levels of 44.30 , levels last seen about 2 yrs ago and with the improvement in economic conditions in India we don't see that it will be able to climb up any higher. The $ affect is bound to
keep the export prices in a certain bandwidth for some time now.
All this said and done we still believe there is another twist left in the tale :) Prices have bottomed out to some extent and the most stockists have already booked the losses and moved out.
I dont know how many people actually keep a watch over the world weather but the news in drought in China is quite alarming. http://www.ipsnews.net/news.asp?idnews=50996
Although its still early for the new sesame crop sowing in china , my doubt remains weather the Chinese Govt would try to promote sesame sowing or rice/pulses/grain sowing this year as their food basket seems to behalf full at this stage and with food inflation still very high the decisions could be drastic.
In India as well the last 5 months have been very very dry and summers seems to be here early with Temp already touching 40 degree in some areas.If the summer crop is good and price do fall more from current levels it could mean that in terms of farmer the price that they get per Hectare would fall to almost half levels of what they saw a couple of years back and their might again be a crop shift as pulses are still very high priced.
The stocks in India and Africa are still presumed to be quite large and should be enough to last us till the new crop however its the prices of the old stock that can drastically affect the direction in which the new crop could move.A lot of exporters faced problems with default from Buyer's this year and the trade is getting a little cautious now sadly the new babies in the trade do get sucked in by greed and mis-information and the cycle continues.
However one thing is sure that in future we will see a lot more defaults from both sellers and buyers as the trade got dirty over the past few years with the sellers defaulting on low prices earlier and the some buyer's creating problems with high prices later on , now its almost common to hear such stories.
Its been a long time since I updated the market reports but as we all know there was very little action in the market to write anyways.
Last few weeks ofcourse has seen some serious action and now everyone is back on their toes trying to study the market and predicting the direction. Lets first look into the scenario that unfolded in the past 6 months i.e after the new crop.
1:- As everyone predicted and expected the crop was fairly good although not as big as the last crop but definitely a good sized one which could have sustained and fed the export demand well.
2:- We started on a low key and the crop was a little late but on anticipation of a good crop the exporters offered low levels which were fair priced enough for the buyers and they took in a good quantity.
3:- Then the usual Indian market mischief happened and prices shot up by 15-20% in 2 weeks time and everyone who was short was caught off guard.The stockist thought it was a repeat of the year before and speculated that the prices will go even higher thus hoarded the crop in a big way. Result was that the demand suddenly shifted towards Africa and prices started to come down slowly, however the stockist continued to buy trying to make an average.Even the farmers held back the crop and brought in less every time prices tried to go down.
4:- The Korean Tenders came and went, India got a substantial quantity but with even bigger stocks its failed to create any ripples.In fact prices move up in anticipation every time the Tender is announced and fail to continue the upward move even after the tender is declared as the bidders are mostly covered or prefer to wait a while before covering themselves rather than rushing into buying as they normally did in the past.
5:- Then came the big bang , Chinese demand was supposed to return after their new year break but all the waiting and expectations were dashed after they came ...they saw ...but they didn't buy.
6:- Stockists still held their nerves , in fact even as i speak they are still optimistic. The reason being that in line previous years where stocks were being held largely but corporate giants and exporters this year the stocking happened at very low levels Farmers , middleman , village level suppliers , yard based stockist etc with factories and exporters keeping very little in hand.
7:- Now when everyone See's that the demand is fairly low and the new Gujarat Summer crop ( Last yr is was about 60-70,000 Mt , this year should be 40-50,000 MT as well , I presume lower crop due to very very dry climate and lower sentiments in farmers due to prices) there is a bit of a panic and a lot of suppliers want to finish off their stocks so its kind of a fire sale going on right now.
8:- The USD has fallen to the levels of 44.30 , levels last seen about 2 yrs ago and with the improvement in economic conditions in India we don't see that it will be able to climb up any higher. The $ affect is bound to
keep the export prices in a certain bandwidth for some time now.
All this said and done we still believe there is another twist left in the tale :) Prices have bottomed out to some extent and the most stockists have already booked the losses and moved out.
I dont know how many people actually keep a watch over the world weather but the news in drought in China is quite alarming. http://www.ipsnews.net/news.asp?idnews=50996
Although its still early for the new sesame crop sowing in china , my doubt remains weather the Chinese Govt would try to promote sesame sowing or rice/pulses/grain sowing this year as their food basket seems to behalf full at this stage and with food inflation still very high the decisions could be drastic.
In India as well the last 5 months have been very very dry and summers seems to be here early with Temp already touching 40 degree in some areas.If the summer crop is good and price do fall more from current levels it could mean that in terms of farmer the price that they get per Hectare would fall to almost half levels of what they saw a couple of years back and their might again be a crop shift as pulses are still very high priced.
The stocks in India and Africa are still presumed to be quite large and should be enough to last us till the new crop however its the prices of the old stock that can drastically affect the direction in which the new crop could move.A lot of exporters faced problems with default from Buyer's this year and the trade is getting a little cautious now sadly the new babies in the trade do get sucked in by greed and mis-information and the cycle continues.
However one thing is sure that in future we will see a lot more defaults from both sellers and buyers as the trade got dirty over the past few years with the sellers defaulting on low prices earlier and the some buyer's creating problems with high prices later on , now its almost common to hear such stories.
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