Spices continued their recovery into the second weekend, that too in the most comprehensive manner.
Flagging domestic pepper prices got a shot in the arm as the government on Thursday announced a scheme for grant of WTO-compatible subsidy on export of pepper from India at the rate of Rs 5 per kg (or the actual cost incurred, whichever is less) for international freight and Rs 2 per kg for internal transport.
Subsidy will be permitted for the export of a maximum of 20,000 metric tonne of pepper. The subsidy will be provided to exporters on a first-come-first-served basis.
This in turn resulted in the prices spurting up by more than 4% on that day but cooled down on Friday and Saturday to end the week posting an overall gain of over 3% for the various contracts.
The top honours of the week were again shared by chilli and turmeric that ended the week with huge gains of Rs 400-500 a ton, and that too with strong volumes. Zeera too was not left far behind and ended the week posting overall gains. Cardamoms gain on Thursday was nullified by losses it incurred on the other trading days.
Bullion and energy
US gold futures hit a 10-day high at the close on Thursday on fund and safe-haven buying in the precious metals. The buying was fueled by a mix of renewed speculative interest in commodities and an improved technical picture for the metals, which sparked short covering as the dollar pulled back against the euro.
December delivery gold climbed nearly $7 to end the week at $475.10 an ounce on the New York Mercantile Exchanges Comex division, its highest settlement since October 17, after dealing at between $465.2 and $477.80.
Silver, that was trailing in golds shadows for the major part of last month, at last broke free from its clutches and ended up at 782.5 after trading between $768 and $794.
US crude oil ended higher in choppy trading on Thursday, rising late in the day on a flurry of short covering. The days slim gains were supported by emerging concern over winter fuel, with below normal temperatures in the US northeast. The daily government update on US Gulf of Mexico output continued to be at a snails pace, also price supportive.
Domestic rubber prices staged a strong rally during the past week and closed the narrowing gap further between the domestic prices and international prices as the latter kept falling throughout the week. Domestic prices surged up by a whopping 5% for the near months contract in NMCE capitalising on its strong bullish phase.
Domestic rubber is looking strong, both technically and fundamentally. On the global front, the benchmark Tocom rubber fell by more than Rs 3 per kg over the last week, mainly tracking falling crude prices. All the major exchanges across the globe closed lower in the case of rubber except that of India.
It is likely to be an interesting week ahead, with supply fears being eased on resumption of tapping in Thailand . We will have to wait and see what is going to happen to crude prices over the coming weeks.
Courtesy: Geojit Commodities Ltd