Spices August 2010 Way2Wealth making investing simpler, more understandable and profitable.

Transcription

1 Spices Profile, Dynamism, Outlook, & Strategies August 21 Way2Wealth making investing simpler, more understandable and profitable.

2 Commodity Update Index Global Spices Cumin Cumin Production-Global Cumin Market Dynamism Chilli Chilli Production-Global Chilli Market Dynamism Pepper Pepper Production-Global Pepper Market Dynamism Turmeric Turmeric Production-Global Turmeric Market Dynamism Summary & Strategy

3 Global Spices Spices constitute an important group of agricultural commodities, which are virtually indispensible in culinary art Out of the world s 7 plant species grown as spices, 13 are considered major spices produced in Asia. About 72 lakh tons of spices produced across the globe Spices are widely traded across the globe as the production of spices are largely confined to few selected countries, while it is uses by all In India, chilly, turmeric, cumin seed & pepper are major spices produced in terms of their crop size However, Chilli,jeera, pepper & turmeric are the major exporting spices 76 Global Spice Production (Lakh tons) Source: Way2Wealth Research Global Spice Trade Spice Trade/Production Ratio Pepper 68% Ginger 28% Chillie 14% Other Spices 12% Source:Way2Wealth Research

4 Commodity Update Index Global Spices Cumin Cumin Production-Global Cumin Market Dynamism Chilli Chilli Production-Global Chilli Market Dynamism Pepper Pepper Production-Global Pepper Market Dynamism Turmeric Turmeric Production-Global Turmeric Market Dynamism Summary & Strategy

5 Cumin Profile Jeera It is one of the seed spices It is limpid and pale yellow in colour, strong aromatic smell and warm, bitterish taste Cumin seeds 4-5 mm long Plant Description Cumin herb 35-4 cm tall (lentil plants) on the long, thin, small leaves, such as branching Climatic Conditions Jeera is a tropical plant and grown in cooler regions which is best suited for sandy soil It requires less water and more cold for its better growth with ideal temperature of 25 to 3 degree High humidity during flowering & fruit set, causes fungal diseases in this crop Uses It is used as an ingredient in several Ayurvedic medicines as well as in the preparation of soft drinks. India Syria Turkey Crop Cycle Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Plantation Harvesting

6 Cumin Production - Global India Acreage & Production Major Cumin Seed Producers India 77% 4 3 Production satiated over last 3 Yrs Pakistan 4% Egypt 5% Syria 5% Turkey 9% Source: Way2Wealth Research Area in ' Hect Production in ' tons Source: Syria Agri,Way2wealth Research Syria Acreage & Production Global cumin seed production is around 2 thousand tons India (77%), Syria(9%), Turkey(5%), contributing more than 9% of production 16 Highest ever Production in India is the world s largest producer of cumin seed, followed by Syria & Turkey Production has fallen significantly India produces 165 thousand tons while Middle East Countries (Turkey, Syria & Iran) produce 3 thousand tons Syria (Aleppo, Idleb & Hama), Turkey ( Central Antolina) are key growing regions Production in ' tons Area in ' Hect Source: Syria Agri,Way2wealth Research India Production has satiated over last three years Middle East countries production has fallen significantly over a period of time In Syria, second largest producer, production has fallen from a high of 97 thousand tons to 1 thousand tons over 7 Yrs.

7 Cumin Production - India Cumin Seed Production 2-1 Cumin Seed Production 26-7 Rajas than 61% Gujarat 35% Gujarat 59% Others 4% Rajasthan 12% Others 29% Source:Way2Wealth Research Source:Way2Wealth Research Cumin(Jeera) Production in ' tons States Production on Left Axis and Total Production on Right Axis Gujarat Dispaced Rajstan due to reletive advantage India is the world's largest producer & consumer of cumin seed It contributes about 77% in the total world production Gujarat (59%), Rajasthan (12%) are the major producing states Jeera plant is grown as a Rabi crop The cumin is planted at the end of the year & harvested in the beginning of the year Source:Way2Wealth Research Rajasthan Gujarat Total India Cumin Production is hovering in the range of thousand tons

8 Cumin Production Gujarat 4 Jeera(Arrivals) in Gujarat in Major Producing Districts of Gujarat Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source:Way2Welath Research Arrivals in ' tons Price INR/ton Others 32% Banask anta 9% Rajk ot 1% Surendranagar 24% Jamnagar 11% Porbandar 14% Source:Directorate of Agriculture, Way2Wealth Research Gujarat is the largest producer of jeera with 6 percent of total India production Gujarat is producing on an average 13 thousand tons of cumin seed every year Gujarat surpassed Rajasthan in terms of production from 24-5 onwards Though cumin seed is grown in several districts in Gujarat, the prominent ones are Surendranagaar, Porbandar, Banaskantha and Mehsana The biggest cumin seed mandi is located in Mehasan District of Gujarat On an Average 1 thousand tons arrives in mandies on a monthly basis

9 Cumin Production Rajasthan Major Producing Districts of Rajasthan Jeera arrivals in Rajasthan in ' Tons % od the crop comes to local mandies Pali 5% Nagaur 7% Jodhpur 11% Others 12% Jalore 34% Source:Market Sources, Way2Wealth Research Barm er 31% Source:Directorate of Agriculture, Way2Wealth Research Rajasthan, largest producer till 24-5, was pushed to second place in terms of production Rajasthan is producing on an average 2-23 thousand tons of cumin seed every year Though cumin seed is grown in several districts in Rajasthan, the prominent ones are Jalore, Barmer, Jodhpur and Nagaur Earlier, cumin seed used to be traded in the mandies at Niwai and Kekri also in Rajasthan. The mandi in Nagaur is the largest center for cuminseed The price of cumin seed in Gujarat mandies are normally higher therefore many farmers in Rajasthan also carry their produce for selling in Gujarat mandies About 4-5 percent of the crop produced are brought to the local mandies

10 Cumin Trade India India Cumin Trade in ' tons Falling Production in Key growing countries compelling importers to relay on indian crop Exports Imports Source:DGFT, Way2Wealth Research p is not full yr Others 61% India Cumin Exports in % p 4 3 Despite export competition from East Asian countries, India has competitive advantage over them in terms of exports India cumin seed trade dynamism changed dramatically over a period of five years (25-6 to 21-11) India, used to export 1 % of its production in 24-5, is exporting 42 % of its production latest by 29-1 In absolute terms, cumin seed exports have grown by a CAGR of 23 percent over last 7 Yrs India exports cumin & its powder to Bangladesh, Vietnam, Malaysia, Nepal, Singapore, UAE, UK, the US and many other countries Iran, Turkey & Syria are the major Export competitors to India UK 3% Singapore 4% Malaysia 5% Source:DGFT, Way2Wealth Research Nepal 7% Vietnam 1% USA 1% Falling Productions in Middle East Asian Countries is compelling major importers to look for Indian cumin Since new crop in Syria & Turkey is harvested in Jun September so until then generally, Indian cumin seed finds good market in overseas countries

11 Cumin Market Dynamism Seasonality Index for Cumin Seed in India Arrival seasonality Price seasonality Oct Nov Dec Jan Feb Mar Apr May June July Aug Sep Source:Market Sources, Way2Wealth Research f Crop Yr (Feb-Oct) La bags tons La bags tons Opening Stock Domestic Production Total Supply Domestic Consumption Export Total consumption Closing Stock ( till 'Oct) Consumption till new crop Carry forward S/U Ratio Source:Way2Wealth Research Duration of Jeera crop is about 4-5 months. Sowing season starts during October continues till November. Harvesting starts from February and will continue till March However, peak arrivals would be during March to May Compared to other months, price of jeera would be relatively lower during February to May due to heavy arrivals in the market During June to September prices of Jeera were at peak levels because of huge demand from the exporters & limited arrivals Threats to the Crop Jeera crop is highly sensitive to rain, if rain occurs during harvesting time, (February to March) deteriorate the quality Farmers may shift crop from Jeera to Fennel seed alternatively Early spring in Turkey, usually in Central Anatolia, between 15 February-15March, is crucial to watch as plantation takes place More export orders during off-peak (Jun-Sep) and shortage of supply may lead to rally in the prices

12 Commodity Update Index Global Spices Cumin Cumin Production-Global Cumin Market Dynamism Chilli Chilli Production-Global Chilli Market Dynamism Pepper Pepper Production-Global Pepper Market Dynamism Turmeric Turmeric Production-Global Turmeric Market Dynamism Summary & Strategy

13 Chilli Profile Red Pepper Chilli It is one of the fruit spices It is green, red and reddish orange in colour, strong pungent smell and pungent in taste Pungency is due to the active principle `capsicin contained in the skin Climatic Conditions The chilli crop does well in the tropical and the sub tropical regions with annual rainfall of 6-15 cms It is cultivated as an irrigated crop High humidity during flowering & fruit set, causes fungal diseases in this crop Uses Used as both green and ripe (the latter in the dried form) to impart pungency to the food It is also used medicinally, and in chutnies and pickles Indian Chilli Wet Crop Dry Crop Bangladesh Arrival in India Crop Seasonality of Chilly (4 months Crop) Jan feb March Apl May Jun July Aug Sep oct Nov Dec Plantation Harvest

14 Chilli Production - Global Share of Global Chilli Trade in % Global Chilli Production in % 24 India, 25 Pakisthan 8% Thailand 15% Turkey, 4.5 Morocco, 7 Pakistan, 7.2 Mexico, 8 Spain, 17 Korea 13% India 64% Source:Spice Board, Way2Wealth Research Source: way2wealth Research Global Chilli crop is estimated close to 7 million tons India is one of the largest producer of chilies in the world but its production pattern is highly erratic India dominates in terms of production with 64 % of world production, then followed by Thailand, Korea & Pakistan India (25%), China (24%), Pakistan (7.2 % ) are the major traders globally Much of crop is traded in the beginning of the year due to 7 % arrivals during this period Infact, Asia is the sole supplier of chillily to Western world

15 Chilli Production - India State Wise Dry Chilli Production in MY 22-3 Andhra Pradesh, 45% State Wise Dry Chilli Production in MY 27-8 Andhra Pradesh, 61% others, 7% others, 4% Rajastan, 2% Punjab, 2% Tamilnadu, 4% Madhya Maharashtra, Pradesh, 3% 6% West Bengal, 7% Orissa, 7% Karnataka, 17% Rajastan, 1% Punjab, 2% Tamilnadu, 3% Madhya Pradesh, 3% Maharashtra, 3% West Bengal, 7% Karnataka, 11% Orissa, 5% Source:Spice Board, Way2Wealth Research Source:Spice Board, Way2Wealth Research India also has the largest area under chilies in the world Chilly Area,Production & Yields in India Source:way2Wealth Research Area ' Hect Production ' tons Yield kg/hec India is the largest producer of chilies in the world but its production pattern is highly erratic India is the world's largest producer, consumer and exporter of chilies in the world Andhra Pradesh (61%), Karnataka (11%), Orissa and WB with each 7 % are the major producing states Chilly plant is grown both as Khariff & Rabi crop Chilly is planted in Aug-Oct and plucking starts in January with 3-4 times Winter Crop ( plantation Jul-Sep) Summer Crop ( plantation Feb-Mar) Mid season Crop ( May-Jun)

16 Chilli Production - India Chilli Production Proportion in % Rabi 23% Kharif 77% Source:Spice Board, Way2Wealth Research More than 75 percent of the chillies are produced during Khariff season, the rest is reaped in Rabi Since major crop is coming from Andhra Pradesh, floods during Aug-Sep would generally cause damage to the crop Chilly exports of all forms have significantly moved higher over last three years On an average, India exported 2 thousand tons of chilly over last 3 Yrs The quality of Chilly is determined by the ASTA & paprika levels 24 2 Chilli Exports in ' tons Higher the ASTA, the higher the colour pigment that can be extracted 16 Paprika (Capsaicin) is to measure the hotness of Chilly 12 Byadgi is one with highest ASTA colour value & Negligible Capsaicin 8 4 Guntur Sannam is one with low ASTA colour value & high Capsaicin -.226% e Source:Spice Board, Way2Wealth Research India is producing more than 3 tons of Guntur Sannam variety & 25 thousand tons of Byadgi every year

17 Chilli Production Andhra Pradesh Chilly area,production & Yields in AP Area ' hect Production ' ton Yield kg/hec Source:way2Wealth Research Andhra Pradesh is the largest producer of chilly with 61 percent of total India production Andhra Pradesh is producing on an average 75 thousand tons of chilly cumin seed every year Andhra Pradesh has been retaining its top place in terms of production Though chilly is grown in several districts in Andhra Pradesh, the prominent ones are Guntur, Khammam, Warangal, mehboobnagar and Krishna AP season Khariff ( plantation Jul-Oct) Rabi ( plantation Oct-Nov) 1 The biggest chilly mandi is located in Guntur district of AP Dry Chilli Arrivals & Wt Avg Prices(AP) Major Producing Districts of AP Guntur 34% Khammam 12% Warangal 12% Others 31% Source: DOA,Way2Wealth Research Source:Agmarknet,Way2Wealth Research Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Arrivals(ton) 29 Arrivals(ton) 21 Weighted avg price 29 Weighted avg price 21 Mehboobnag ar 5% Krishna 6%

18 Chilli Production Karnataka Dry Chilli Arrivals & Price in 21 (Karnataka) Major Producing Districts of Karnataka Source: Dacenet,Way2Welath research 75 Others 3% Darwad 27% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Gadag 5% Gulbarga 4% Bellary 11% Haveri 23% Source: DOA, Way2Wealth Reseach Arrivals(' ton) Weighted Avg price Karnataka is the second largest producer of chilly with 11 percent of total India production Karnataka is producing on an average 13 thousand tons of chilly every year Byadgi variety of Karnataka is best exportable variety because of its richness in colour pigment Byadgi has much export demand in the segment of oleoresins Hubli ( Dharwad), Byadgi (Haveri), Bellari and Gadag in Karnataka are the major chilly producing districts The biggest chilly mandi is located in Byadgi ( Haveri) District of Gujarat

19 Chilli Market Dynamism 4 3 Seasonal Index for Chilly in India Duration of Chilly crop is about four to five months. Sowing season starts during July continues till October. Harvesting starts from December and continues till March Compared to other months, price of chilly remains relatively lower during February to May due to heavy arrivals into the market.8 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Arrival Sesonality Price Seasonality Source:Way2Wealth Research During June to September prices of chilly were at peak levels because of huge demand from the exporters & limited arrivals Threats to the Crop Chilly Balance Sheet f Mn bags tons Mn bags tons Opening Stock Domestic Production Exports Imports.. Net Exports Total Supply Domestic Consumption Carry Forward S/U Ratio Source:Way2Wealth Research In India, Chilli is being cultivated mostly as a rain-fed crop therefore its yield fluctuates from year to year Very high rainfall during harvesting is harmful Coastal Andhra is highly prone to floods during Aug- Oct, standing crop is prone to be washed away during this period Floods in Bangladesh and Pakisthan are key points to look for crop assessment

20 Commodity Update Index Global Spices Cumin Cumin Production-Global Cumin Market Dynamism Chilli Chilli Production-Global Chilli Market Dynamism Pepper Pepper Production-Global Pepper Market Dynamism Turmeric Turmeric Production-Global Turmeric Market Dynamism Summary & Strategy

21 Pepper Profile (king of Spices) Pepper Pepper is a plantation spice It is a perennial crop and grows to 1 meters tall There is around 32% recovery of black pepper from ripe green berries Black pepper is used in powder, oil & oleoresin forms White pepper is obtained by fermentation of ripen fruits ( 12% WP recovery rate from fruits) Plant Description It is vine crop that creeps over other plants & grown largely in high altitude areas Climatic Conditions Water stagnation in the soil, even for a very short period is injurious to the plant Varieties The best Black Pepper is considered to be Telicherry and Lampong Vietnam India Brazil Indonesia Malaysia China SL Harvesting Calender of Pepper (6-7 months Crop) Jan feb Mar Apr May Jun Jul Aug Sep Oct Nov

22 Pepper Production - Global Major Pepper Producing Countries in % (1999) Major Pepper Producing Countries in % (28) Cambodia % Madaga 1% India 35% Malaysia 1% Cambodia 1% Madaga 1% India 19% Malaysia 9% Indonesia 8% Brazil 13% China 5% Vietnam 14% ThailandS Lanka 3% 2% Brazil 1% Indonesia 2% China 9% Vietnam 3% S Lanka 6% Thailand 4% Source:Pepper Trade, Way2Wealth Research Source:Pepper Trade, Way2Wealth Research World pepper production has been falling by CAGR of 6.1 % Global Pepper Scenario (' tons) Global Pepper Mkts getting tighter Source:Way2Wealth Research carry over World Production World consumption Global pepper production is close to 29 thousand tons Vietnam (3%), India(19), Brazil(13%) & Malaysia(9%) are the key contributors India, used to be the largest producer in nineties, lost its place to Vietnam Vietnam is producing close to 1 thousand tons, while India has fallen short of half its production Indian Production has satiated over last three years with production hovering in the range of 5-55 thousand tons Indonesia & Malaysia lost their pepper plantation to other profitable plantations such as oil palm % rubber Global pepper market is getting tighter with falling inventories amid falling production in key growing countries

23 Pepper Consumption & Trade - Global Singapore, 7 Others, 26 Netherlands, 9 Source:Way2Wealth Research Major Pepper Consuming Countries in % India, 14 EU, 26 USA, 18 Drought in 22 lead to decline in output of pepper in 23, as a result production has fallen by 6 percent ( India,19%; Malaysia, 13%; SriLanka,1%) Significant proportion of pepper is consumed in EU (26%), USA ( 18%), India (14%), Netherlands ( 9%), Singapore ( 7%) India consumes 75 % of its production Vietnam (51%), Brazil(11%), India(1%) & Indonesia (1%) are the key exporting countries USA (49%), Germany(2%), Netherland(1%) & Singapore (8%) are the key exporting countries Indonesia 1% Major Pepper Exporting Countries in % Others 11% Singapore, 7.6 Major Pepper Importing Countries Others, 13.6 Malaysia 7% Vietnam 51% Netherland, 9.5 USA, 48.8 India 1% Brazil 11% Germany, 2 Source:Way2Wealth Research Source:Way2Wealth Research

24 Pepper Production - Vietnam Vietnam balance Sheet in ' tons Demand Pressure Likely to Continue in Vietnam Vietnam started pepper production on commercial basis in 199 s Vietnam overtook India in just 1 yrs and is the world leader in global pepper market The highest global production of 341 thousand tons in 22 was result of plantation during in Vietnam Vietnam Yields are more than five times higher than India( Vietnam 18 kgs / Hect. Vs India 32 kgs / Hect) carryover vietnam production local consumption exports Vietnam (3%), India(19), Brazil(13%) & Malaysia(9%) are the key contributors India, used to be the largest producer in nineties, lost its place to Vietnam Vietanam Pepper Export Seasonality Peak Exports Vietnam is producing close to 1 thousand tons, while India has fallen short of half its production Harvesting time lasts from January to May and collecting vigorously in March yearly Harvest progressing Jan(4.7%),Feb(24%),Mar (49%), Apr(2.4%) & May (2.2%) South-east region is the most pepper producing region, accounting for 57% of area and 58.5% of production 4 jan mar may jul sep nov Source:Way2Wealth Research Central Highlands is the second biggest producing region making up 3% of plantations and 34% of output

25 Pepper Production - Brazil Pepper Exports & production in ' tons Source:Way2Wealth Research exports Production Brazil is the third largest producers of pepper with two yearly crops It produces about 36 thousand tons every year First crop is mainly in Para state, usually shipped from the port of Belem from Aug to Jan/Feb second production from May till June / July in the states of Espirito Santo and Bahia which is shipped from the ports of Vitória and some from Salvador 2 15 Brazilian Export Seasonality Peak Exports The port of Santos in the state of Sao Paulo as well as Ro de Janeiro, ship merchandise from both origins There are also some truck shipments to Argentina, Uruguay and Chile 1 5 jan mar may jul sep nov Source:Way2Wealth Research

26 Pepper Production - India Major Pepper Producing States in India 22 Kerala 95% Major Pepper Producing States in India 29 Kerala 88% Karnataka 3% Others 1% Source: Spice Borard, Way2Wealth Research Tamilnadu 1% Source: Spice Borard, Way2Wealth Research Others Tam ilnadu Karnataka 4% 1% 7% India is the world's second producer of pepper 3 25 India Pepper Area, Production & Yields Increased older age plantation reduced yields 4 36 It contributes about 2% in the total world production Kerala (88%), Karnataka (7%) are the major producing states Pepper plant is grown as a plantation crop so its production patterns are cyclical in nature The most popular varieties from India are Malabar Garbled and Tellichery Black pepper India pepper Production is been declined form 93 thousand tons in 5-6 to 47-5 thousand tons recently Area' Hect Production ' tons Kg/Hect Despite slight drop in acreage, getting increased older plantation has severely hit the production in India recently

27 Pepper Production - India PEPPER SESONALITY IN INDIA JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Harvesting Plantation Harvesting India is the world's second producer of pepper Critical stages of crop development Pepper plant starts flowering during May June with the onset of the southwest monsoon Harvesting is usually in November-January There is also another cropping season in certain parts in India during August-September Variation in maturity pattern depends on factors such as variety, rainfall, altitudes, ambient temperature etc. Pepper fruits mature in about 6-8 months after flowering Pepper pollination is also possibly aided by water drops falling on spikes during pollination time Harvesting The crop takes 6 to 8 months from flowering to harvest The harvest season extends from November to January in the plains and January to March in the hills The whole spike is hand picked when one or two berries in the spike turn bright orange or red.

28 Pepper Production Kerala & Karnataka 25 2 Pepper Area & Production in Kerala Pepper Area & Production in Karnataka Source: Way2Wealth Research Area' Hect Production ' tons Source: Way2Wealth Research Area' Hect Production ' tons Even though Karnataka is in second place in terms of pepper production, it s production has picked up significantly during 28-9 While kerala crop is still hovering in the range of 3 thousand tons, Karnataka production is estimated to have jumped by 5 percent from 1 thousand tons to 2 thousand tons in 28-9 Accumulation of old age plantation has reduced the yields significantly over last two years in Kerala Though newer plantation has been initiated, it takes time to get the production because of its long gestation period The biggest pepper mandi is located in Kochi District of Kerala

29 Pepper Trade India India Pepper Export and Imports ' tons Dependency I ncreasing due to drop in domestic production Source:Way2Wealth Research exports imports India, used to be the 45% supplier for global requirement, has lost dominance and instead stated relying on imports Vietnam and Brazil have pushed India in to 3 rd place in terms of exports India Exported as much as 42 thousand tons in 1999-, the highest ever so far, now exports have fallen significantly to mere 22 thousand tons Pepper trade dynamism changed dramatically over a period of five years (25-6 to 21-11) Country Wise Indian Exports in ' tons Source:Way2Wealth Research India, used to export more than 4% of its production in 1999-, is exporting less than 3% of its production latest by 29-1 In absolute terms, pepper exports have fallen by a CAGR of 26 percent over last 3 Yrs India exports pepper & its powder to USA,UK, Italy, Germany & Canada and others USA UK Italy Germany Canada Falling Productions in India is forcing major importers to look for Vietnamese & Brazil pepper The current scenario is posing threats of India to become net importer in near future

30 Pepper Market Dynamism Global Pepper Avg Prices of 3 Yrs in USD/ Ton Jan Mar May Jul Sep Nov B Pepper W Pepper Since the harvesting of pepper starts at the beginning of a year, so any weather disruption impact the crop in subsequent year India Peak arrivals during March to May Around mid of March, Vietnam commence harvesting Therefore, imports of Vietnamese pepper happens in large quantity to India directly and via Sri Lanka take place from mid-march Compared to other months, price of pepper remain relatively lower during May to July due to heavy arrivals in the market Crop Yr (Jan-Dec) f Opening Stocks 15 9 Domestic Production 5 49 Imports Total Supply Domestic Consumption Exports 22 2 Total Demand 7 68 Carry Forward 9 6 S/U Ratio Source:Way2Wealth Research Threats to the Crop Sharp rise in rubber prices might hinder the expansion of pepper plantation, which is already under threat now Heavy rains in Kerala might hamper the yields again Weather patterns in Vietnam and Brazil would be crucial for the crop next year More export orders during off-peak (July- Oct) and shortage of supply may lead to rally in the prices

31 Commodity Update Index Global Spices Cumin Cumin Production-Global Cumin Market Dynamism Chillily Chilly Production-Global Chilly Market Dynamism Pepper Pepper Production-Global Pepper Market Dynamism Turmeric Turmeric Production-Global Turmeric Market Dynamism Summary & Strategy

32 Turmeric Profile Indian Saffron Turmeric Turmeric as spice is deep yellow in color having a pungent flavor Plant Description This tropical herb plant is usually 3 to 5 feet in height having flowers of dull yellow color and is largely cultivated in the parts of Southeast Asia The plant is perennial having bright green leaves and yellow conical flowers. To convert it into a powdered form, the rootstalk is boiled, dried, cleaned and polished and then powdered Climatic Conditions It needs hot and humid climate to prosper and it generally grows on light black or red soils that are clayey in nature It is grown from the sea level to 12 meters above mean sea level. The yield of this crop also depends on the amount of rainfall it gets, as it requires an appropriate amount of water to survive. Temperature ranging from 2-3 degree centigrate with a rainfall of 15 mm or more per annum Uses It is used as an ingredient in several Ayurvedic medicines as well as a medicine for stomachaches and disorders Turmeric is used as a condiment, dye, drug and cosmetic in addition to its use in religious ceremonies Tamil Nadu Andhra Pradesh Arrival Turmeric (5 months crop) Jan feb March Apl May Jun July Aug Sep oct Nov Dec Plantation Harvest

33 Turmeric Production - Global The world production of turmeric stands at around 8 thousand tons in which India hold a share of approximately 75-8% Other major producers are Pakistan, China, Haiti, Jamaica, Peru, Taiwan and Thailand The total annual consumption of turmeric around the globe is approximately 38 Lakh bags to 4 Lakh bags (65 kg/bag) The major turmeric exporting countries constitutes: - India Thailand Other Southeast Asian countries Central and Latin American countries Taiwan The major importing countries of turmeric are: - Japan Sri Lanka Iran United Arab Emirates United States United Kingdom Ethiopia

34 Turmeric Production - India Major Turmeric Producing states in 2 Orissa 14% Tamilnadu 25% Others 1% Andhra Pradesh 47% Tamilnadu 18% Major Turmeric Producing states in 28 Orissa 8% Others 12% Karnataka 8% Andhra Pradesh 54% Karnataka 4% Source: Way2Wealth Research Source: Way2Wealth Research India is producing 6 tons of turmeric annually India Turmeric Area, Production India consumes around 8% of its own production In India, it is cultivated in states of Andhra Pradesh(4%) Karnataka (13%) Orissa (13%) Tamil Nadu(17%) Kerala Maharashtra Area in ' Hect Production in ' tons Source: Way2Wealth Research Turmeric is available in two seasons in India i.e. from February to May and from August to October.

35 Turmeric Production - India There are various varieties of turmeric that are produced in India namely: - Alleppey Finger (Kerala) Erode Turmeric (Tamil Nadu) Salem Turmeric (Tamil Nadu) Rajapore Turmeric (Maharashtra) Sangli Turmeric (Maharashtra) Nizamabad Bulb (Andhra Pradesh) There are two dominant types of turmeric found in the world market, both named after the regions of production, in India. Alleppey The orange-yellow flesh Alleppey turmeric is predominantly imported by the United States, where users prefer it as a spice and a food colorant. Alleppey turmeric contains about 3.5% to 5.5% volatile oils, and 4.% to 7.% curcumin Madras The madras type contains only 2% of volatile oils and 2% of curcumin. The Madras turmeric is preferred by the British and Middle Eastern markets for its more intense, brighter and lighter yellow color, better suited for the mustard paste and curry powder or paste used in oriental dishes. Though India is the largest producer of turmeric in the world, the exportable surplus is very low because 9 % of the domestic production is consumed and also because of low productivity Earlier research studies and current studies of Tamil Nadu Agricultural University confirmed that there exists five year cyclic behaviour of turmeric prices. This cyclic price behaviour might be the causal agent for changes in area under turmeric ie., when the price are slump in current year, area under turmeric will be less in succeeding year. This supply side reduction causes prices to escalate and next year more area under turmeric leads to downward pressure on price.

36 Turmeric Trade India 7 6 India Turmeric Trade in ' tons Indian turmeric is considered to be the best in the world market because of its high curcumin content Source: Way2Wealth Research Exports Major India Turmeric Export Destinations Others 39% Malaysia 7% U K 6% U.A.E 15% Sri Lanka 8% U S A 1% Bangladesh 8% Japan 7% Imports United Arab Emirates (UAE) is the major importer accounting for per cent of the total exports followed by United States of America (USA) with 1 per cent The other leading importers are Bangladesh, Japan, Srilanka, UK, Malaysia, South Africa, Netherlands and Saudi Arabia India, used to export 1 % of its production in 24-5, is exporting 15 % of its production latest by 29-1 Erode is the only Regulated Market functioning throughout the year whereas the turmeric markets in Andhra Pradesh, Maharashtra and in other States of India are seasonal in nature Fresh turmeric arrival in Erode Regulated market starts from mid January to June and stored product is available throughout the year During January to April turmeric from Mysore region comes to Erode market regularly, which has premium over others Source: Way2Wealth Research

37 Turmeric Market Dynamism Turmeric Price Seasonality 92 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source:Way2Wealth Research The general trend in Erode market is the arrival of Mysore region crops during the month of January to April followed by Anthiyur, Bhavani, Gobi, Sathyamangalam, Thondamuthur, Kodumudi and Modakurichi regions respectively. Most of the traders opined that the March-April months are peak arrival period. So at that time the price will be less by 8 to 1 per cent than the normal price f La bags tons La bags tons Beginning stocks Production Total supply Exports Imports Net Exports Domestic consumption Total demand Ending stocks S/U Ratio Source:Way2Wealth Research Recently there was a reduction in the area under turmeric in main turmeric belt (Kodumudi region) of Erode district due to shift to sugarcane cultivation. This reduction in area was compensated by increased area under turmeric in Salem district. In Erode regulated market there is no cost for storage of turmeric up to 15 days. Thereafter only ten paise per quintal /day is charged. Farmers can also store in State / Central Ware Housing Corporation and the storage cost is around Rs.6 per quintal / month.

38 Commodities: Summary & Strategy Fundamental Technical H2-1 Range Yearly Strategy Cumin Seed (Jeera) Fundamentally cumin seed crop size is likely to be on lower side due to unfavorable weather conditions and on the other hand, export demand is quite high due to limited production in other major producing countries Technically, Jeera is moving in a broad channel INR 9 to 17 since H2 28.However, the recent rally likely to take jeera prices to INR 18. In the second half of 21, jeera price can be in the range of INR Buy on Dips Chilly Chilly: amid quite high carryover stocks, this year plantation is also expected to be on the higher side, which is likely to put cap over prices Technically, Chilly looks to loose further as it is forming classic corrective a-b-c patterns, which is expected to conclude at INR 35 In the second half of 21, Chilly price can be in the range of INR Sell on Rallies Pepper Falling Production in India due to increased percentage of older plantation, and strong domestic demand forcing India to relay increasing imports, which is strong secular problem Technically, pepper looks quite constructive as it is in an impulsive wave now, the current impulsive wave might take prices to INR 22 In the second half of 21, Pepper price can be in the range of INR Buy on Dips Turmeric Despite lower carryover stocks, due to less production last year, good crop expected this year is likely drag turmeric prices lower Though technically turmeric has shown a chronic up trend, a deep correction to INR is quite possible In the second half of 21, Turmeric price can be in the range of INR Sell on rallies

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