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SPICES COMPLEX
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Spices form an important ingredient of Indian cuisine. The delightful combination of the variety of spices lends a distinctive
spices futures on its platform for managing price risk and providing an alternative investment avenue. Chilli, Coriander,
Jeera, Pepper and Turmeric constitute NCDEXs spice complex for derivatives trading. The performance of these contracts
India is the leading producer, consumer and exporter of spices in the world. From time immemorial India has been known
as the Land of Spices. The Chinese, Arabs and The Europeans came to the Indian shores lured by the spices grown here. The
world consumption of spices is growing steadily year on year and trading in Spices Futures has also grown from strength to
You can trade in Spices futures by either becoming a member of NCDEX or a client of one of the member
of the Exchange.
RPEPPE
APRIL 2004
TURMERIC
JULY 2004
JEERA
FEBRURY
2005
CHILLI
MARCH
2005
CORIANDER
AUGUST
2008
F
Import/Export Data
D
are used in the dry, fresh and powder forms and are also used to make oleoresin.
spices are used as a agent for culinary purposes and form an important ingredient
powders are used as colouring agent for processed foods
Global and Domestic Production /Demand
Total Deposited Stock & FED wise stock positionClimatic conditions
Daily Arrivals and trades in the cash market
International Price parity
Year ending stocks and stocks-to-consumption ratio
Prices received by farmers for other competing crops & Sowing progress
Cost of Carry components (Warehousing, Assaying, Demat/Remat charges)
Spot Prices
Daily Margins
Spices
All
of curry powders and Indian recipes.
Spice
Spices are being extensively used in medical, Pharmaceutical, Cosmetics & Food ProcessingIndustries.
RPEPPE
APRIL 2004
TURMERIC
JULY 2004
JEERA
FEBRURY
2005
CHILLI
MARCH
2005
CORIANDER
AUGUST
2008
SPICESSPICES
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3
KNOWLEDGE EDGE
Plantation- Harvest Calendar: India
Spices Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec
RED CHILLI
CORIANDER
JEERA
PEPPER
TURMERIC
Harvest Planting Flowering
The Plantation - Harvest Season may changed due to change in climatic conditions.
SPICE UP YOUR INVESTMENT PORTFOLIO
SPICES FUTURES AS A TOOL TO MANAGE PRICE RISK
PRICE VOLATILITY
(
EXPORT
APR-JUN
FROM I
2011) T
NDIA
NNES
0
3
6
9
12
15
18
21
24
Jan-09
Mar-09
May-09
Jul-09
Sep-09
Nov-09
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
DHANIYA PEPPER TURMERIC JEERA CHILLI
Source: NCDEX (Monthly volatlity calculated on the basis of spot prices of base centre
Best
Performing
LongBest
Performing
Short
0
10
20
30
40
50
Coriander Turmeric
Top Performing Spices
Returns in Jan-July 2011 (%): Near Month FuturesCHIL
TURM
CU
CORIA
PEP
LI - 40,5
RIC - 21,
IN - 5,7
DER - 7,
ER - 5,7
0
775
0
500
0
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Coriander (Dhaniya) (Market size 1100 Crores, HS Code 090920)
Coriander, an annual rabi crop of the country is sown around
About 80% of the production in India comes from Rajasthan.
The other major producing states are Madhya Pradesh, Andhra
Pradesh and Orissa. The Total Domestic production of the crop
is around 2.5-3.00 lakh tonnes. Indonesia, Sri lanka,UAE, Saudi
Arabia, USA, UK, Germany and the Netherlands are the major
importers whereas India, Turkey, Egypt, Romania, Morocco, Iran
and China are chief exporters. Popular grades of the rounded
seed spice on the basis of colour are Badami, Eagle, Scooter
and Parrot. Major trading centres of this spice include Kota, Ramganj, Baran and Jaipur in Rajasthan, Guna in
Madhya Pradesh and Virudnagar in Tamilnadu. India is the largest producer, consumer and exporter of coriander.
Chilli (Mirchi) (Market size 6954 Crores, HS Code 09042010)
chilli
and
Cumin seed (Jeera) (Market Size 2050 Crores, HS Code 090930)
Gujarat is the largest jeera producing state in the country,
followed by Rajasthan. These two states alone contribute
approximately 90% of production in the country. India leads the
world production with around 2.0 lakh MT of Jeera produced
annually and harvesting session of the crop is from February
- April. Most of the Jeera produced is consumed within the
country. Although Syria, Turkey and Iran have a much lower
level of production as compared to India, but these countries
SPICES @ NCDEXSPICES @ NCDEX
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prices as a bulk of their production is used for export purpose. Indian cumin is exported to many countries in its natural
as well as powdered form, besides as an essential oil. The export of cumin seeds from India has increased manifold in the
Turmeric (Haldi) (Market Size 5758 Crores, HS Code 091030)
Indian turmeric is considered to be the best in the world due
to presence of high curcumin content. There are wide uses
of this golden spice. Apart from its domestic culinary use, it
processed foods. Turmeric is also an important ingredient in
cosmetics as well as in the pharmaceutical industry. It is mainly
cultivated in Andhra Pradesh, Tamil Nadu, Maharashtra, Orissa
and West Bengal, with production ranging from 5.5-8.0 lakh
tonnes and harvesting session is from February to April. The
spice is generally available as Fingers and Bulbs. Some of
the well known varieties of turmeric are Salem and Erode
turmeric (from Tamil Nadu), Rajapore and Desi Cuddapah
turmeric (from Maharashtra) and Nizamabad turmeric Duggirala turmeric, Cuddapah turmeric and Warangal turmeric
(from Andhra Pradesh).
India is the largest producer, consumer and exporter of turmeric across the globe. The other major producers are China,
Myanmar, Nigeria, Bangladesh, Pakistan, Sri Lanka, Taiwan, Burma and Indonesia.
Pepper (Kalimirch) - (Market Size 803 Crores, HS Code 09041130)
Black pepper is often referred to as black gold among spices.
Pepper berries are usually dried and used as spice and
seasoning. Black pepper is used directly as spice and also for
the preparation of oleoresin and oil. Pepper grades in trade
grades are Malabar and Tellicherry. In addition to these two
Indian varieties, the major varieties traded in the world include
Lampung, Brazilian, Ceylon, Sarawak and Vietnam.
Vietnam with an annual production of almost double that of
India, has now become one of the major suppliers of pepper
in the international markets. However, Indian pepper fetches a
premium price in major markets because of its preference and
,
intrinsic qualities. India, Brazil, China, Indonesia, Malaysia, Sri Lanka, Thailand and Vietnam are major players in pepper
production and exports. June-July is the harvesting period in Sarawak (Malaysia), August- September in Brazil, July-
September in Lampung (Indonesia) and January-February in India. World Pepper production varies from 2.7 lakh-3.6
lakh MT per annum whereas Indian production varies from 45,000 to 50,000 MT. Kerala is the leading state producing
black pepper in India.
last ve years. Jeera or cumin seed has signicant demand as a spice all around the globe especially in the places where
spicy food is preferred.
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SPICES FUTURES CONTRACTS SPECIFICATIONS
Compulsory delivery of contracts implies that all open position at the expiry of contract need to be settled
www.ncdex.com.
JEERA PEPPER TURMERIC
Ticker Symbol JEERAUNJHA PPRMLGKOC TMCFGRNZM
Unit
of
Trading
3
MT 1
MT 5
MT
Delivery
Unit
3
MT 1
MT 5
MT
Quotation
Base
Value /quintal* /quintal* /quintal* /quintal*
Tick Size Re. 1 Re. 1 Re. 2
Basis Centre Unjha Kochi Nizamabad
Additional Delivery Centres
Delhi, Jaipur,
Jodhpur
Calicut, Trissur
Erode, Sangli,Warangal,
Duggirala,Cuddapah
GradeMachine Clean
Jeera
Malabar
Garbled- 1
Unpolished
Finger
Members
Position
Limit (MT)
All Contracts
3000
(600)
4500
(900)
20000
(4000)
1000
(200)
1500
(300)
5000
(1000)
Delivery Logic
ERCORIAND
DHANIYA
10 MT
10 MT
/quintal*
Re. 1
Kota
Ramganj Mandi,
Jaipur, Guna,
Baran
Badami
7500
(1500)
2500
(500)
Compulsory
Delivery
CHILLI
CHLL334GTR
5 MT
5 MT
Re. 2
Guntur
Warangal
LCA 334
12500
(2500)
4000
(800)
Compulsory
Delivery
Compulsory
Delivery
Compulsory
Delivery (EarlyDelivery)
Compulsory
Delivery
6
(* : quintal=100 Kgs)
Near Month
All Contracts
Near Month
Clients
Position
Limit (MT)
Maximum Order Size 150 MT 50 MT 250 MT500 MT250 MT
Parameter
VALUE CHAIN: ALL PARTICIPANTS IN THE VALUE CHAIN FACE THE PRICE RISK
Farmer
Commission Agent orKachcha Adatia
Consumer
Trader orPakka adatia
Retailer
Processor/Exporter
Wholesaler
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MAJOR AREAS OF SPICES PRODUCTIONMAJOR AREAS OF SPICES PRODUCTION
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Contact our Business Team (Spices) for any query/information:
SRIKANT AMBATI (HYDERABAD) + 919951922000 ANUP RAJ (DELHI) +919958110086
JITENDRA SINGH (JAIPUR) +919983325699 VIKRAM SINGH (KOLKATA) +919051454777
SREEKANTH CHETTIYAR (KOCHIN) +919946761411 SANDEEP DUBEY (HYDERABAD) +919949152475ANIL JAISWAL (AHMEDABAD) +919898066934 BHARAT JAKATI (MUMBAI) +919833255348
DEEPAK SAYANA (HYDERABAD) +919848220310 TARUN KATOCH (INDORE) +919754417054
Sugandh Exporters has an export commit-
ment of 30 M T of Jeera for delivery in Decem-
ber 2011 contracted at `15,500 per quintal.
The exporter faces the risk of jeera pricesgoing up. As soon as he enters into export
contract, he buys 10 contracts of December
2011 expiry Jeera futures at existing price of
15,000 per quintal. In the month of December,
price of jeera in spot market (as well as in
futures on expiry) becomes `16000 per quin-
tal. He incurs a loss of `500 per quintal in
meeting the export obligation but gains
`1000 per quintal in futures market. Thus, he
manages to hedge from adverse price risk by
taking corresponding positions in futuresmarket.
Hedging
Cash & Carry Arbitrage
Speculation
8
Ms. Mirchi has through understanding of the
fundamentals of chilli trade and keeps a
continuous track of domestic and internation-
all developments that aect the price of chilli.In the Present scenario, she is convinced that
the price of chilli is likely to increase in coming
months. She takes a long position by buying 5
futures contracts of NCDEX chilli for far month
at `9,000 per quintal. In few days, the price
increases to `10,000 per quintal and she
squares o her position and locks in the prof-
its.
GAURAV MIDDHA (DELHI) +919711159060 T. UMESH (JAIPUR) +918239101000
TRADING STRATEGIESTRADING STRATEGIES
Tikharam has no direct exposure to dhaniya
trade; however, he has interest in commodity
investment. He nds out that dhaniya decem-ber 2011 futures are trading at `6000 per quin-
tal and current spot price is `5200 per quintal.
He noticed that after accounting for cost of
carry (assaying, storage, interest etc), his cost to
deliver in december is around `5900 per quin-
tal. He procures 10 MT from local mandi today
and deposit it in NCDEX accredited warehouse.
At the same time, he sells 1 dhaniya futures
contract of december expiry on NCDEX. At
expiry, Tikharam delivers dhaniya and realises
the prot of`10,000.
Swadumal is a keen observer of futures price of
pepper traded at NCDEX. From his experience
over the years, he knows that normally the
prices of January expiry contract exceeds thatof December contract by around `500.This
dierence is called 'spread' in trade terminol-
ogy. Due to some uctuation in market, this
spread shrinks to `300. Swadumal believes that
eventually the spread will resume normalcy
and increase to around `500. He, therefore,
buys 1 contracts of january Pepper and shorts 1
contracts of December pepper. In a few days,
spread widens to `450. He squares o his posi-
tion in both the contract and realises the prot
of` 1,500.
AMIT DARAK (MUMBAI) +919819179128