MONTHLYCOMMODITY DIGEST

JULY 2021

1. MD's Desk..................................................... (Arun Raste)..................................................1

2. Sectoral Indices............................................ (Nirav Desai)..................................................2

3. Agri Market Overview.................................. (Priyam Bansal)............................................. 3

4. Commodity Market Overview...................... (Anuj Gupta)..................................................5

5. Product Overview: Steel ..............................{Abhsihek Chouhan}......................................7

6. Product Overview: COCUD.......................... (Abhijeet Banerjee).................................... 9

7. Fundamental Report 6

- Soybean........................................................................................................11

- Rice...............................................................................................................12

- Maize........................................................................................................... 13

- Co�on.......................................................................................................... 14

- Chana........................................................................................................... 15

- Bajra............................................................................................................. 16

8. News Digest........................................................................................................................ 17

9. Circular/Regulatory Changes.............................................................................................. 19

10. FPO Story............................................................................................................................ 20

11. Commodity Corner - Moong.............................................................................................. 21

INDEX

01

From MD's Desk

he pandemic era has magnified any normal challenge that impacts agricultural sector. I am saying this because a�er a good beginning, the

monsoon has taken a backseat since the last couple of weeks posing many challenges to the ongoing kharif plan�ng season. Sta�s�cally, monsoon rainfall has been 10% above normal in June, but scanty rains since mid-June un�l July 07 has created a major hurdle in sowing. Even if acreages catch-up and exceed from last year’s sowing, it may affect the yield.It may be li�le early to come to a conclusion, but a big lag in oilseeds sowing, contrary to the expecta�ons of huge increase, is definitely a cause of concern. Shortage and resultant rise in prices of soybean seeds is only adding to the woes of farmers. The backlog is also prevalent in other cash crops like co�on, maize or pulses as sowing is yet to pick-up in key agricultural states like Gujarat, Rajasthan and Maharashtra among others.To offset the price rise and to provide some relief to infla�on-hit consumers, Government of India has taken certain steps including reduc�on in import du�es on edible oils, removal of curbs on import of pulses, and imposi�on of stock limits on pulses. These may, in the short term, impact the market sen�ments.But that’s not all. There are reasons to rejoice as well. The regulator, SEBI, has recently granted approval to

two sectoral indices in the agriculture deriva�ves segment namely GUAREX and SOYDEX. Both the indices have the poten�al to replicate the success their underlying contracts have already been enjoying ever since the launch. Spot values of these indices has already gone live on our Website which will be followed by the launch of futures contracts in due course.Sectoral indices have their own advantages when it comes to trading. Firstly, the margin requirement will be flat 10% through the tenure of the contract giving visibility to market par�cipants with respect to the cost of transac�on. Secondly, being cash se�led ones, the contracts offer a be�er deal for those retail investors who have been desirous to trade in commodi�es, but wary of compulsory delivery feature of commodity futures contracts.Before concluding, let us thank SEBI for taking another trend-se�ng step to deepen the commodity deriva�ves market by extending the Cross margin benefit of 75 % on Ini�al Margin for eligible offse�ng posi�ons of index futures and futures of its underlying cons�tuents or its variants. The decision will raise the efficiency of capital and offer many advantages not only to hedgers, but to all categories of market par�cipants who trade in indices.

T

Arun RasteMD & CEO, NCDEX

02

his is perhaps a turning point in commodity deriva�ves market, par�cularly for agri-commodi�es as India will soon witness its

first sectoral index futures contract in agri-commodi�es going live. Needless to say, the contract will be made available by India’s top agri-bourse Na�onal Commodity and Deriva�ves Exchange (NCDEX).

NCDEX already has the AGRIDEX, the composite index that is tradeable and based on the movement in top 10 agricultural futures contracts on the exchange. This is also the only index so far in the agri futures space in India. The index gave almost 40% returns in its first full year of opera�on in May.

Enthused by the success and the u�lity of having indices in the deriva�ves basket for the use of various stakeholders. As the name suggests, GUAREX is based on the movement in the futures contracts of Guar Seed and Guar Gum Refined Splits, while SOYDEX will track Soybean and Refined Soy Oil. Both being among

the top traded contracts for the exchange since launch, there is no doubt about the poten�al success of these contracts.

So what are the advantages of trading in GUAREX or SOYDEX over their respec�ve underlyings? Well, there are many. The biggest benefit is that a single trade in the index futures contract will give exposure to two commodi�es viz. Guar Seed and Guar Gum Refined Splits in a ra�o of 63:37. Same is the case with SOYDEX. The contract will give an exposure in Soybean and Refined Soy Oil in a ra�o of 68:32. This factor alone cuts your capital requirement for trading almost by a-half.

Secondly, the margin requirement for both indices would be around 10% flat through the tenure of the contract irrespec�ve of vola�lity in the contract, which makes it an a�rac�ve proposi�on for trading indices rather than their underlying which a�ract the ini�al margins of 12-13% and rising expiry margins during the tender period.

Since futures contracts in both the indices are cash se�led, it will prove a bonanza to the delivery-wary investors and traders as well as to por�olio and asset management which had been reluctant to invest in agri-commodi�es.

For professional traders, GUAREX and SOYDEX offer a great opportunity of paired trade strategies like calendar spreads and arbitrages between index and underlying etc among others. With the latest regulatory incen�ve of 75% cut in Ini�al Margin requirement for spreads and arbitrage transac�ons, NCDEX GUAREX and NCDEX SOYDEX can create a number of opportuni�es for all types of market par�cipants.

These indices hold a lot of poten�al from the long-term hedging and investment perspec�ve mainly due to its extremely low correla�on with peers like NIFTY in equi�es or MCX BULLDEX in gold or silver.

The spot index Guar and Soy complexes has already been launched and available on NCDEX’s website and the futures contracts on the same would be launched in due course. The wait for the futures contracts will be worthwhile as there will be a lot of clarity on kharif crops due to closure of the sowing window by then. That will be the right �me to take fresh bets on new crops through indices.

Sectoral Indices

Mr. Nirav DesaiMD - Nikhil Commodity

NCDEX GUAREX & NCDEX SOYDEX: Achhe bhi, Saste bhi

T

03

Agri Market Overview

e all have just come out of an unforge�able and devasta�ng passage of �me which had once put a ques�on mark on the very survival

of the human race. Though we are not completely out of the woods yet, we believe the worst is over and look forward to the new set of challenges in the �mes to come. During this pandemic period, the world has seen agriculture markets booming across geographies. In agrarian economies like India, the agriculture sector was the only one which stood apart to post a healthy 3.4% posi�ve growth during the last fiscal when all other sectors have de-grown. In fact, the agriculture market is being redefined in terms of supply chain management, produc�on and consump�on pa�erns,

storage and marke�ng to suit the emerging changes in the global demand and supply equa�ons. Look at some of the facts about Indian agriculture, as enumerated below, to believe India is in a sweet spot to exploit the opportuni�es in the sector thrown open by burgeoning global food demand.

Some facts India has the second-largest arable land resources in the world. India has all the 15 climate-condi�ons present in the world within its 20 agro-clima�c regions. The country also has 46 of the total 60 soil types present in the world. India is the largest producer of spices, pulses, milk, tea, cashew, and jute, and the second largest producer of the world’s staple food i.e. wheat and rice, fruits and vegetables, sugarcane, co�on, and oilseeds. During 2020-21 India’s food grain produc�on is set to reach a record 304 million tonnes. The hor�culture output is even more than that. From around $19 billion, India’s agricultural exports are targeted to reach the $60 billion mark in the next few years. Last but not the least, India is on the cusp of implemen�ng mega

reforms in the agricultural marke�ng sector, which has a poten�al to transform the whole sector and give a greater push to the rural economy. All these factors are likely to offer India a greater role to play in the global agricultural market.

Trading in commodity deriva�ves The increased ac�vity in the global agricultural markets was reflected in a sharp rise in agri-commodity trade. As far as deriva�ves market is concerned, India’s top agricultural bourse NCDEX has witnessed a ver�cal rise in its volumes in this year so far. Though the surging volumes are largely due to heightened vola�li�es,

Mr. Priyam BansalAVP,

Globe Capital Market Ltd.

W

Agricultural Markets in India – The Road Ahead

(Contd...)

04

concerned, India’s top agricultural bourse NCDEX has witnessed a ver�cal rise in its volumes in this year so far. Though the surging volumes are largely due to heightened vola�li�es, increased a�en�on towards agricultural commodi�es during the pandemic as the world hops on the hoarding bandwagon was also responsible for higher trade.

More importantly, the rally in agricultural markets gave equal opportuni�es to all cons�tuents of the market such as arbitrageurs, hedgers, speculators and retail investors. Rapid movements in calendar spreads and a�rac�ve cash-future made arbitrageurs interested in several commodi�es like Chana, Guarseed, Guargum, Jeera, Coriander and Turmeric. It has also brought the cheer back in the hedgers who have enjoyed increased contango spreads in almost all the commodi�es. Seems like the agricultural

commodi�es have regained their lost glory a�er a long �me. The hero of this season has been the oilseed sector which has performed best among all. For example, RM Seed has seen huge open interest being created even in the far months and the Spices sector the Co�on complex showing posi�ve growth. The government has also supported by not intervening in the market..

NCDEX has also done its bit by reducing transac�on charges to encourage market par�cipants. Overall, it will not be an exaggera�on to say that agri-commodi�es have won back their iden�ty as an Asset Class during the pandemic. Now the stage is set for agricultural commodi�es to perform even be�er. With more focus on risk management products, record crops in the wake of

record prices, burgeoning exports and stocking of food becoming a structural change in many countries, the momentum is likely to be maintained in the coming months. In a nutshell, the strength in India’s agri-sector is reflected in the following diagram.

05

(Contd...)

igher domes�c output notwithstanding, many agri-commodi�es have witnessed high vola�li�es in 2021 so far with Soybean rising

almost 52% when it made an all-�me high of Rs. 7,825 in May. Other commodi�es in the edible oil complex like Mustard have also increased nearly 18% and made a record high of Rs. 7,650 per quintal. Similarly, Refined Soyoil toed the lines of Soybean pos�ng a record Rs.1,475 per 10 kg level. In pulses, the only commodity traded in the deriva�ves segment is Chana, which has made a mul�-year high of Rs. 5,896 a quintal rising 17% during the period under review.

Among spices, Turmeric has made a year high at Rs. 9,522 per quintal and is currently trading nearly 27% higher at Rs.7,700 level. The rise in prices of Jeera was rela�vely flat but a�er hi�ng a year-high of Rs. 15,035 per quintal, the spice currently trades 5.73% higher at Rs. 13,390 levels. Coriander has touched the year high level of 7,596 levels and is currently trading 14.33% higher at 6702 levels.

The key reason for this vola�lity was logis�cal hurdles caused by lockdowns followed by un-locking of economies, closure of major mandies, lower imports of edible oil etc. Domes�c demand for food has increased as people started stocking up food grains, edible oil amid fear of extension of lockdowns. As per the third advance es�mate for the 2020-21 crop year, the agriculture ministry has projected food grain produc�on at a record 305.43 million tonnes. Wheat and pulses produc�on is es�mated to rise to their records 108.75 million tonnes, 25.56 million tonnes, respec�vely. In the non-foodgrain category, the produc�on of oilseeds is es�mated at 36.56 million tonnes in 2020-21 as against 33.21 million tonnes in the previous year. Sugarcane produc�on is pegged at 392.79 million tonnes from 370.50 million tonnes in the previous year, while co�on output is expected to be higher at 36.49 million bales (of 170 kg each) from 36.07 million bales a year ago. Despite record crops, the infla�on increased by 6.3% due to higher crude oil prices and increased freight charges.higher crude oil prices and increased freight charges.

Commodity Market Overview

Mr. Anuj GuptaVice President, Research - Commodity and Currency

IIFL Securi�es

H

Agri-commodi�es more vola�le in 2021 despite record crops

06

On the Export front India’s agricultural exports soared to a six-year high of over $19 billion in 2020-21, up nearly 25 % over $15.9 billion in 2019-20. This surge amid the Covid-19 pandemic is driven by record-high rice exports — 13.9 million tonnes in non-basma� and 4.6 MT in the basma� category. Exports of wheat also were at a six-year high of 2.08 MT. On the monsoon front, IMD and private weather forecaster Skymet have predicted a normal to above normal rainfall this year. The South West monsoon is crucial for India. It delivers 70% of India’s rainfall and most agricultural ac�vi�es depend upon it. Further, the agriculture sector accounts for about 18% of India’s GDP and employs more than half of the country’s 1.39 billion popula�on. Overall, the monsoon rainfall in June is set to be in excess of 25% of its average rainfall during the month.

The normal monsoon, followed by record crops again in the coming year and increased domes�c and export demand is likely to keep agri-commodi�es vola�le again as Co�on, Edible Oil Complex and pulses remain in the focus.

07

Product Overview: Steel

(Contd...)

teel is one of the crucial non-agricultural commodi�es that plays a very important role in the economy, par�cularly the developing

economy. It is widely used ferrous metals having applica�on in the household and consumer goods and appliances and vast industrial use apart from being the key component of the urban infrastructure, engineering and construc�on industry. The metal has a very good residual value from the recycling industry. As the Steel is largely a globally integrated sector,

major drivers of steel prices are global demand and supply, infrastructure spending by leading economies, and of course the Chinese economy, like many other commodi�es, has huge bearing on steel prices. Not only physical consump�on, but tariff changes in consuming and producing regions, and environmental policy tweaks and curbs on iron-ore mines and steel factories also play key roles in se�ng the vola�lity in Steel prices.

Though India is the world’s second largest steel producer a�er China, the country produces around 111 million tonnes of the metal, just about 11% of the Chinese output. The Indian steel industry accounts for about 2% of the country's GDP.

NCDEX Steel Contract, A tool to hedge amid sharp moves in steel prices

Mr. Abhsihek ChouhanBusiness Head- Commodi�es

& Currencies, Swas�ka

S

The major producers of crude steel are China, India, Japan, US and Russia. China is also the major consumer of steel and known as the hub of manufacturing industries. The price of Steel is largely dependent on iron-ore, the key raw material in addition to the demand-supply scenario.

08

The chart above indicates the increasing trend in the world steel output in line with increase in the demand. Recently, we have seen huge increases in prices of steel due to the extremely �ght supply, high iron-ore prices and burgeoning demand from China. Iron-ore prices shot up because of the disputes between the world’s leading exporter of the steel raw material i.e. Australia and the largest importer China which led to the boom in the metal sector, which was reflected in share prices of listed steel companies breaking the highs of the last 10 years in India. Further, movement of currencies pegged against the US Dollar also had a significant impact on the movement of global steel and its raw material prices. According to market talks, the Union Cabinet is likely to soon approve a Rs 6,322-crore Produc�on-Linked Incen�ve (PLI) scheme to boost domes�c

manufacturing of speciality steel and a�ract more investments. The incen�ve will range from 4% to 15% for eligible speciality steel manufacturers on incremental produc�on, on the condi�on that minimum investment parameters are followed as per the policy. As we have witnessed unprecedented surge in prices in the last one year, the user industry like construc�on, consumer goods and appliances and automobile sectors have witnessed a huge increase in their cost of produc�on in absence of proper risk management policies. Similarly, weak demand in the economy made it difficult for these companies to pass-on the burden of costs, leading to a double whammy hur�ng financials of these companies. With the situa�on unlikely to change much in the coming days, it is impera�ve for companies engaged in infrastructure, construc�on and engineering, and

automobile to consumer goods to hedge their raw material prices. For example, a construc�on company can book its forward purchases of long steel products at current prices through steel futures contract on NCDEX by a small payment of margin, which can help the company effec�vely manage the scarce working capital. On the other hand, Steel producers can sell their forward produc�on at current prices through steel futures contract on NCDEX to safeguard from poten�al fall in prices at a later date. In either case, the companies safeguard themselves from vola�lity in input as well as output costs and their financial performance remains insulated from price risks, leading to increased shareholder value for the company.

09

Product Overview: COCUD

(Contd...)

o�onseed Oil Cake (COCUD) has been one of the top traded agricultural commodity in the deriva�ves market. The commodity has seen a

lot of ac�on in the last few quarters drawing strength from a stunning rally in edible oil prices across the globe. In India, Co�onseed Oil accounts for around 5-6% of the share in the 24-million-tonne of edible oil consump�on basket leading to which edible oil prices has a significant bearing on prices of Co�onseed Oil Cake.

The commodity had hit a record high of around Rs. 3,500 per quintal in 2017-18 largely due to the

shortage of alternate feed and co�on seed as raw material. In the current Calendar year so far, COCUD prices have risen about 40% in spot and futures markets currently hovering around Rs. 2,800 per quintal in Kadi, Gujarat and on NCDEX.

The current market condi�ons hint at be�er prospect for trade volumes to improve in the longer run. F a l l i n g arrival of raw co�on due to the lean s u p p l y s e a s o n and thin stocks with ginners and farmers have resulted in supply crunch in the market. The latest

U.S. Department of Agriculture (USDA) report for 2021/22 (August-July) indicated a decrease in global co�on ending stocks as mill use exceeds produc�on for the second consecu�ve season. Global ending stocks are projected at 89.3 million bales, the lowest in 3 years. The report sees world

co�on produc�on 5% higher at 118.9 million bales,

considering the possibility of rise in the planted

area. Likewise, the world co�on mill use is projected to rise nearly 4%t to 122.5

million bales as the global economy

expands. As a result, the world

co�on trade for 2021-22 is expected to

remain at one of its highest levels on record, and the US and Brazil being the largest exporters.

Mr. Abhijeet BanerjeeSenior Manager

Religare Commodi�es

C

Limi�ng inventory, stable demand situa�on likely to influence co�on cake markets

10

There is an op�mism that global economic rebound would push demand for Indian co�on leading to which domes�c inventories will witness a significant reduc�on. The Co�on Associa�on of India has projected domes�c co�on use at 330 lakh bales, compared with 250 lakh bales for the previous year. This indicates that there can be a reduc�on in the carryover stocks year-on-year because of increase in the consump�on level. As chances of elevated edible oil price regime in the medium term are quite high, one can expect co�on wash oil prices to con�nue with the firm trend,. According to market sources more than 90% of the co�on crop has already arrived

in the market. Therefore, the �ght supply situa�on in co�onseed is expected to con�nue in the coming months considering stronger demand outlook for the commodity. Also the new season for co�on will start only in October – s�ll a long �me before the seed availability increases. On the flip side, there are chances that COCUD consumers might shi� too cheaper grains like wheat due to costlier animal feed alterna�ves like soymeal and even maize lately.

Government’s latest data indicates that the acreage of co�on in Haryana has fallen short of target by over 90,000 hectares because of hampering of field

ac�vi�es during the second wave of the Covid-19 pandemic and shi�ing of farmers to other crops like groundnuts. Due to same reason planted area currently remains lower in Rajasthan and Gujarat also. There may be some modera�on in trading ac�vity in the short term, but over a period of �me we can expect no�ceable improvement in trading volumes in physical markets. Going forward, COCUD should trade under influence of stable demand, limited inventory situa�on, in addi�on to the global trend in co�on.

11

Fundamental Report

SoybeanArrival State Wise In the current marke�ng season, star�ng Oct 1, arrivals of soybean decreased by 19% from the corresponding period a year ago

Source: USDA(*A�ribute Unit Descrip�on: Area in 1000 Ha; Yield in MT/Ha; Quan�ty in 1000 MT); Note- FSI: Food Seed Industry

Balance Sheet (India)

Major Media NewsSlow start to Kharif sowing; acreage of some pulses, soyabean high Sourceh�ps://www.financialexpress.com/market/commodi�es/slow-start-to-kharif-sowing-acreage-of-some-pulses-soyabean-high/2279389/

Source: Agmarknet

State-Wise (Qty in MT)

This Year Last Year % Change from Last Year (01/10/2020-30/06/2021) (01/10/2019-0/06/2020)

Madhya Pradesh 2,108,859 2,701,763 -22% Maharashtra 1,118,789 1,295,100 -14% Rajasthan 395,513 427,475 -7% Karnataka 87,580 84,999 3% Telangana 50,214 83,534 -40% Gujarat 26,655 41,808 -36% U�ar Pradesh 22,079 14,779 49% Cha�sgarh 10,243 59,500 -83% Tamil Nadu 1,569 - - Manipur 656 732 - Mizoram 1 2 -12% Nagaland 113 75 51% U�rakhand 54 377 -86% India 3,822,325 4,710,143 -19%

Commodity Attribute India (21-22) World (21-22)

Oilseed, Soybean

Beginning Stocks 350 87,998 Area Harvested 12,700 132,508

Yield 1 3 Production 11,200 385,524

Feed Waste Dom. Cons. 950 27,278

Food Use Dom. Cons. 560 21,807 Imports 250 172,710

Total Supply 11,800 646,232 Exports 200 172,900

Domestic Consumption 11,210 380,779 Ending Stocks 390 92,553

Meal, Soybean

Beginning Stocks 481 11,380 Production 7,760 260,317

Feed Waste Dom. Cons. 5,935 252,606 Food Use Dom. Cons. 300 731

Imports 30 64,474 Total Supply 8,271 336,171

Exports 1,700 69,849 Domestic Consumption 6,235 254,864 Industrial Dom. Cons. 1,527

Ending Stocks 336 11,458

Oil, Soybean

Beginning Stocks 200 4,510 Production 1,750 62,247

Feed Waste Dom. Cons. 5,450 110

Food Use Dom. Cons. 49,070

Imports 3,725 12,084

Industrial Dom. Cons. 12,707

Total Supply 5,675 78,841 Exports 15 12,816

Domestic Consumption 5,450 61,887

Ending Stocks 210 4,138

Fundamental Report

RiceArrival State Wise In the current marke�ng season star�ng Oct 1, Paddy (Dhan) (Basma�) arrivals reported lower by 48% from the corresponding period last year.

Source: USDA(*A�ribute Unit Descrip�on: Area in 1000 Ha; Yield in MT/Ha; Quan�ty in 1000 MT); Note- FSI: Food Seed Industry

Balance Sheet - Rice Milled (India)

Major Media NewsThousands of paddy farmers allege their paddy harvest s�ll not li�edSource-h�ps://www.downtoearth.org.in/news/agriculture/extend-paddy-procurement-beyond-today-odisha-farmers-7770345% paddy s�ll to be sown, erra�c power supply hur�ng farmersSource-h�ps://www.hindustan�mes.com/ci�es/others/45-paddy-s�ll-to-be-sown-erra�c-power-supply-hur�ng-farmers-101625168858924.html

Source: Agmarknet

12

State-Wise (Qty in MT)

This Year Last Year % Change from Last Year (01/10/2020-30/06/2021) (01/10/2019-30/06/2020)

Punjab 974,967 1,091,024 -11% U�ar Pradesh 825,784 1,776,781 -54% Madhya Pradesh 677,732 1,787,637 -62% Haryana 675,435 1,347,726 -50% Rajasthan 4,794 24,487 -80% Telangana 1,295 2,005 -35% Cha�sgarh 901 30 2903% Andhra Pradesh - 148 -100% Kerala - 29 -100% Odisha - 75 -100% U�rakhand - 637 -100% West Bengal 50 65 -23% India 3,160,958 6,030,643 -48%

Country Attribute 2021-22 2020-21

India

Beginning Stocks 27,900 29,900 Area Harvested 44,400 44,400 Yield 4 4 Production 121,000 122,000 Rough Production 181,518 183,018 Total Supply 148,900 151,900 Exports 15,500 17,000 Domestic Consumption 108,000 107,000 Ending Stocks 25,400 27,900

World

Beginning Stocks 176,327 177,883 Area Harvested 163,023 162,568 Yield 5 5 Production 506,616 504,992 Imports 44,690 44,218 Rough Production 756,158 753,758 Total Supply 727,633 727,093 Exports 46,973 47,131 Domestic Consumption 512,254 503,635 Ending Stocks 168,406 176,327

13

Maize

Fundamental Report

Arrival State Wise In the current marke�ng year star�ng from October 2020, total mandi arrivals remained lower by 37% from the corresponding period of last year.

Balance Sheet (India)

Major Media NewsEarly monsoon rains cause damage to maize crop in Bihar Source-h�ps://www.hindustan�mes.com/ci�es/patna-news/early-monsoon-rains-cause-damage-to-maize-crop-in-bihar-101624425102675.html#:~:text=According%20to%20rough%20official%20es�mates,destroyed%20due%20to%20early%20rains.&text=�mely%20paddy%20transplanta�on.-,About%20250%2C000%20farmers%20produce%2035%20to%2040%20lakh%20metric%20tonnes,and%20Seemanchal%20regions%20in%20Bihar.

Source: Agmarknet

Source: USDA(*A�ribute Unit Descrip�on: Area in 1000 Ha; Yield in MT/Ha.; Quan�ty in 1000 MT); (** FSI: Food Seed Industry)

State-Wise (Qty in MT)

This Year Last Year % Change from Last Year (01/10/2020-30/06/2021) (01/10/2019-30/06/2020)

Madhya Pradesh 844,815 1,297,669 -35% Maharashtra 506,180 657,319 -23% Karnataka 495,843 1,777,009 -72% Rajasthan 407,053 210,800 93% Telangana 243,310 334,063 -27% Cha�sgarh 242,521 215,803 12% U�ar Pradesh 182,822 302,513 -40% Odisha 175,745 239,173 -27% Tamil Nadu 59,702 19,305 209% Punjab 49,656 18,878 163% Gujarat 40,803 59,244 -31% Haryana 6,995 35,318 -80% Andhra Pradesh 1,559 3,442 -55% NCT of Delhi 897 802 12% Jharkhand 412 136 203% U�rakhand 216 669 -68% Assam 0 7129.0 -100% Manipur 40 39 2% Nagaland 13 451 -97% Pondicherry 6 1 786% Tripura 0 - - India 3,258,589 5,179,762 -37%

Country Attribute 2021-22 2020-21

India

Beginning Stocks 1,863 1,863 Area Harvested 9,500 9,700 Yield 3 3 Production 29,500 30,250 Imports 300 50 Total Supply 31,663 32,163 Exports 1,200 1,800 FSI Consumption 11,400 11,500 Feed Dom. Consumption 18,000 17,000 Domestic Consumption 29,400 28,500 Ending Stocks 1,063 1,863

World

Beginning Stocks 280,598 305,451 Area Harvested 199,141 197,193 Yield 6 6 Production 1,189,854 1,125,030 Imports 189,506 184,006 Total Supply 1,659,958 1,614,487 Exports 197,469 187,036 FSI Consumption 424,804 418,082 Feed Dom. Consumption 748,272 728,771 Domestic Consumption 1,173,076 1,146,853 Ending Stocks 289,413 280,598

14

Fundamental Report

Cotton

Arrival State Wise In the current marke�ng year star�ng October 1, arrivals of co�on declined 49% so far, compared with the arrivals during the corresponding period a year ago

Major Media NewsPink bollworm in 6 Bathinda villages sets off alarm bells among co�on growersSource-h�ps://www.hindustan�mes.com/ci�es/chandigarh-news/pink-bollworm-in-6-bathinda-villages-sets-off-alarm-bells-among-co�on-growers-101625083823576.html#:~:text=Pink%20bollworm%20in%206%20Bathinda%20villages%20sets%20off%20alarm%20bells%20among%20co�on%20growers,-The%20agriculture%20department&text=Director%2C%20Punjab%20Agricultural%20University%20(PAU,states%2C%20including%20Maharashtra%20and%20Karnataka.

Co�on picking begins, growers fear low yieldsSource-h�ps://www.thenews.com.pk/print/858003-co�on-picking-begins-growers-fear-low-yields

Scrap import duty on co�on as it hurts garment exports, trade body tells CentreSource-h�ps://www.thehindubusinessline.com/markets/commodi�es/scrap-import-duty-on-co�on-as-it-hurts-garment-exports-trade-body-tells-centre/ar�cle35024115.ece

Source: Agmarknet

State-Wise (Qty in MT)c

This Year Last Year % Change from Last Year (01/10/2020-30/06/2021) (01/10/2019-30/06/2020)

Gujarat 795,519 1,033,817 -23% Maharashtra 478,542 974,492 -51% Telangana 377,238 1,055,620 -64% Madhya Pradesh 346,364 713,081 -51% Rajasthan 318,659 849,725 -62% Punjab 195,921 139,563 40% Karnataka 147,782 298,524 -50% Haryana 57,542 357,449 -84% Andhra Pradesh 47,598 65,697 -28% Odisha 41,042 32,775 25% U�ar Pradesh 3,553 2,303 54% Tamil Nadu 3,425 10,788 -68% Pondicherry 9 78 -89% India 2,813,194 5,533,912 -49%

15

Fundamental Report

Chana

Arrival State Wise In the marke�ng year star�ng from April 2021, all India fresh arrivals of Chana decreased by 9% from the corresponding period a year ago.

Note: Produc�on figures sourced from Ministry of Agriculture^: As per Third Advance Es�mate of Produc�on for 2020-21 released on May 25, 2021

Chana Produc�on:

Major Media NewsGovt imposes stock limits on pulses �ll Oct to prevent hoardingSource-h�ps://www.financialexpress.com/market/commodi�es/govt-imposes-stock-limits-on-pulses-�ll-october-to-prevent-hoarding/2283119/

As Bengal gram prices fall, farmers turn to govt. for helpSource-h�ps://www.thehindu.com/news/na�onal/andhra-pradesh/as-bengal-gram-prices-fall-farmers-turn-to-govt-for-help/ar�cle34873914.ece

Agricultural commodi�es off bullish path-where are they headedSource-h�ps://economic�mes.india�mes.com/markets/commodi�es/views/agricultural-commodi�es-off-bullish-path-where-are-they-headed/ar�cleshow/83569356.cms

Source: Agmarknet

Marke�ng Year (April-March) Produc�on

(Qty. in Lakh Tonne) Chana 126.10^

State-Wise (Qty in MT)

This Year Last Year % Change from Last Year (01/04/2021-30/06/2021) (01/04/2020-30/06/2020)

Madhya Pradesh 243,818 351,958 -31% Rajasthan 138,723 160,673 -14% Gujarat 88,189 55,807 58% U�ar Pradesh 44,629 82,755 -46% Karnataka 23,207 50,838 -54% Cha�sgarh 16,491 31,366 -47% Telangana 4,700 1,602 193% West Bengal 1,982 2,087 -5% Andhra Pradesh 790 314 151% Kerala 379 421 -10% Manipur 116 64 83% NCT of Delhi 85 23 262% U�rakhand 56 330 -83% Assam - 1,256 -100% Haryana - 301 -100% Odisha 2 - - Punjab 5 81 -94% Tamil Nadu - 10 -100% Tripura - 1 -100% India 812,137 896,298 -9%

16

Fundamental Report

BajraArrival State Wise During the current marke�ng season star�ng from October 2020, Bajra arrivals declined by 29% from the corresponding period a year ago.

Balance Sheet (India)

Major Media NewsProduc�on, procurement of coarse cereals must be increased in planned manner: Piyush Goyal Source-h�ps://www.newindianexpress.com/business/2021/jun/16/produc�on-procurement-of-coarse-cereals-must-be-increased-in-planned-manner-piyush-goyal-2317018.html

Note: Data relates to all Millets not only to Pearl Millet. Pearl millet accounts for about around 50-60% of the total produc�on of millets in India. (Source: USDA) Note- FSI-Food Seed Industry(*A�ribute Unit Descrip�on: Area in 1000 Ha; Yield in MT/Ha; Quan�ty in 1000 MT)

Source: Agmarknet

State-Wise (Qty in MT)

This Year Last Year % Change from Last Year (01/10/2020-30/06/2021) (01/10/2019-30/06/2020)

Rajasthan 324,553 393,228 -17% U�ar Pradesh 137,437 269,567 -49% Gujarat 101,993 106,731 -4% Karnataka 98,646 92,866 6% Maharashtra 60,176 85,286 -29% Madhya Pradesh 28,151 95,832 -71% Haryana 7,213 23,483 -69% Punjab 4,760 - - NCT of Delhi 1,412 1,525 -7% Odisha 539 1 107740% Tamil Nadu 435 37 1090% Telangana 226 9,445 -98% Andhra Pradesh - 78 -100% U�rakhand 30 65 -54% India 765,572 1,078,142 -29%

Country A�ribute 2021-22 2020-21

India

Beginning Stocks 612 612 Area Harvested 8900 8800 Yield 1.44 1.42 Produc�on 12800 12500 Total Supply 13412 13112 FSI Consump�on 11300 11300 Feed Dom. Consump�on 1500 1200 Domes�c Consump�on 12800 12500 Ending Stocks 612 612

World

Beginning Stocks 612 612 Area Harvested 30657 30752 Yield 1.02 1.01 Produc�on 31150 31118 Total Supply 31762 31730 FSI Consump�on 29473 29664 Feed Dom. Consump�on 1677 1454 Domes�c Consump�on 31150 31118 Ending Stocks 612 612

17

News Digest

Farmers understanding benefits of price-locking at sowing �me with op�ons trade: Officials

01

Confident of deriva�ves trade picking up in agricultural commodi�es, officials on Tuesday said farmers have begun understanding benefits of the op�ons trading by locking in their price at the cost of sowing of the crop in a big way.Confident of deriva�ves trade picking up in agricultural commodi�es, officials on Tuesday said farmers have begun understanding benefits of the op�ons trading by locking in their price at the cost of sowing of the crop in a big way. A special ‘op�ons familiarisa�on programme for FPOs (Farmer Producer Organisa�ons)’ has also helped farmers learn a technique to take care of the price risk and concentrate their efforts on increasing the yield of their crops, an official said.

For more details: h�ps://www.financialexpress.com/market/commodi�es/farmers-understanding-benefits-of-price-locking-at-sowing-�me-with-op�ons-trade-officials/2263712/

Govt launches seed minikit programme to boost produc�on of pulses, oilseeds

02

Agriculture Minister Narendra Singh Tomar on Wednesday launched a seed minikit programme by distribu�ng high yielding varie�es of seeds of pulses and oilseeds to farmers.The mini-kits are being provided by the central agencies Na�onal Seeds Corpora�on (NCS), NAFED and Gujarat State Seeds Corpora�on and wholly-funded by the Centre through the Na�onal Food Security Mission. The Seed Minikit Programme was launched by the agriculture minister by distribu�ng seed minikits (higher yielding varie�es of seeds) to farmers, an official statement said.

For more details: h�ps://www.outlookindia.com/newsscroll/govt-launches-seed-minikit-programme-to-boost-produc�on-of-pulses-oilseeds/2094955

Centre announces hike in MSP for paddy, pulses, oilseeds

03

The Central government has hiked the minimum support price (MSP) for common paddy to ₹1,940 a quintal for the coming kharif season, less than 4% higher than last year’s price of ₹1,868.The decision was taken by the Cabinet Commi�ee on Economic Affairs on Wednesday.In a bid to encourage crop diversifica�on, there were slightly higher increases in the MSP for pulses, oilseeds and coarse cereals. Both tur and urad dal saw the MSP rise by ₹300, a 5% increase to ₹6,300 a quintal, while the highest absolute increase was for sesamum, whose MSP rose 6.6% to ₹7,307. Groundnut and nigerseed saw an increase of ₹275 and ₹235 respec�vely. However, maize saw a minimal hike of just ₹20 to ₹1,870 a quintal.

For more details: h�ps://www.thehindu.com/news/na�onal/centre-announces-hike-in-msp-for-paddy-pulses-oilseeds/ar�cle34769896.ece

A�er a decade-and-half, farmers in Tamil Nadu set to plant soyabean again

04Poultry industry takes the ini�a�ve to cul�vate the oilseed crop on 300 acres this yearA�er a gap of over a decade-and-a-half, farmers in Tamil Nadu are likely to take up soyabean cul�va�on from this year.

For more details: h�ps://www.thehindubusinessline.com/economy/agri-business/a�er-a-decade-and-half-farmers-in-tamil-nadu-set-to-plant-soyabean-again/ar�cle34769659.ece

18

News Digest

Shortage of soybean seeds drives prices

05

Farmers in Maharashtra are demanding seeds from the state-owned body, Mahabeej, which are available at Rs 2,100 to Rs 2,200 for a 30-kg pack, compared to soybean seeds from private companies that cost Rs 3,200-3,500.Ahead of the kharif season, farmers in Maharashtra and other major soybean producing regions are concerned over availability of seeds and have reported a shortage of quality seeds.Farmers in Maharashtra are demanding seeds from the state-owned body, Mahabeej, which are available at Rs 2,100 to Rs 2,200 for a 30-kg pack, compared to soybean seeds from private companies that cost Rs 3,200-3,500.

For more details: h�ps://www.financialexpress.com/market/commodi�es/shortage-of-soybean-seeds-drives-prices/2269343/

Early monsoon rains cause damage to maize crop in Bihar

06

Early monsoon rains have damaged maize crops in Bihar’s Seemanchal and Kosi regions with farmers looking for solace in higher procurement prices for the crop this year due to higher demand.A 55-year-old farmer, Ramadhar Chauhan of Gogarh village in Purnia, said, “Rains came at a �me when we were drying our harvest on the road. We have no proper place to store our harvest, which led to the damage.”According to rough official es�mates, about 20% or 600,000-800,000 tons of matured maize may have been destroyed due to early rains.

For more details: h�ps://www.hindustan�mes.com/ci�es/patna-news/early-monsoon-rains-cause-damage-to-maize-crop-in-bihar-101624425102675.html

Slow start to Kharif sowing; acreage of some pulses, soyabean high

07

Agriculture centres across 355 talukas have directed farmers to wait for a while to ensure adequate showers. They have been told to gradually start the sowing process from July first week.Sowing of summer crops in the first three weeks of the season has remained below last year’s levels in most parts of the country, according to data gathered by FE from a few states, but these are s�ll very early days to conclude that kharif area will be lower this �me around.While the southwest monsoon covered most of the country earlier than the normal schedule, causing sufficient precipita�on to create a ground conducive for sowing, a stalling of the phenomenon on June

For more details: h�ps://www.financialexpress.com/market/commodi�es/slow-start-to-kharif-sowing-acreage-of-some-pulses-soyabean-high/2279389/

Sebi allows cross margin between index, commodity futures

08

Move to reduce cost of trading and enhance liquidityIn order to improve use of margin, Sebi has decided to allow cross margin benefit between Commodity Index futures and its underlying cons�tuents futures.The move will reduce cost of trading and enhance liquidity in both the commodity index futures and its underlying cons�tuent trading.Cross margin benefit of 75 per cent on ini�al margin will be allowed for eligible offse�ng posi�ons of index and underlying cons�tuents futures.

For more details: h�ps://www.thehindubusinessline.com/markets/commodi�es/sebi-allows-cross-margin-between-index-commodity-futures/ar�cle35039930.ece

19

Circular/Regulatory Changes

For more details:h�ps://ncdex.com/public/uploads/circulars/API%20Specifica�on%20Update%20%E2%80%93%20Sectoral%20Index_1623763133.pdf

For more details:h�ps://ncdex.com/public/uploads/circulars/Physical_Delivery_Charges_Barley_Maize_Wheat_28062021_1624881986.pdf

API Specifica�on Update – Sectoral Index

Exchange is pleased to announce the launch of Sectoral Indices. The Index values shall be disseminated in a snapshot mode every second. Indices feed will be sent to clients on a connec�onless UDP Mul�cast, in the same way as Agridex and NKrishi.

Physical Delivery Charges – Barley, Maize and Wheat

NCCL levies Physical Delivery Charges of 0.15% of the value of delivery on each side i.e. seller and buyer, in all commodi�es. In par�al modifica�on of the said circular, delivery in Barley, Maize and Wheat commodi�es will not be subject to levy of Physical Delivery Charges from July 01, 2021 �ll December 31, 2021

01

For more details:h�ps://ncdex.com/public/uploads/circulars/Futures_&_Op�ons_Contracts_Launch_July%202021_Premium_Discount_30062021_1625054619.pdf

Futures & Op�ons Contracts Launch in July 2021 and Premium / Discount for grade / delivery loca�on difference

The amounts of Premium/Discount for differences in grades/delivery and loca�on cost differences which would be treated as good delivery for the Futures contracts to be launched on July 01, 2021 on the Exchange are detailed in Annexures a�ached in the circular on the website.

03

02

20

FPO Story: KPFPCL

“Come September, and we might have sold 200-300 tonnes of Soybean through deriva�ves contracts on NCDEX. That is the confidence our first deal in Turmeric futures on the exchange pla�orm have given us.”. stated as a remark by a Telangana-based farmer producer company.

Kamareddy Progressive Farmer Producer Co Ltd (KPFPCL), named a�er a district in the southern state of Telangana with the aspira�on to grow as umbrella Farmer Producer Company at the district level. It is more than a decade old FPO, set up with mentoring support from a prominent corporate founda�on with the objec�ve of crea�ng access to just and transparent markets, farm inputs, formal financial ins�tu�onal and advanced technology.

It took us 10 years to try using deriva�ves pla�orm of India’s largest agri-bourse Na�onal Commodity & Deriva�ves Exchange Limited, but it fetched us a good 10% extra income, said Shri. K. Rama Rao, director of the FPC.

“That’s not all. We got premium over and above our sale price for delivering be�er quality spice. Reimbursement of various expenses further saved us a good amount” Rama Rao said.

He was vocal on the FPC's decade-long struggle, which is bearing fruits a�er its linkage with the modern market infrastructure like NCDEX.

In 2009, the FPO took shape with ini�ally 300 farmers joining it. In the second year the number reached 990. Since then the FPO has been adding around 200 new members annually, taking the current strength to 2,322 farmers. The paid-up capital too increased from Rs. 1.8 million ini�ally to over Rs. 6.0 million today.

“A�er spending a couple of years on assessing ins�tu�onal marke�ng opportuni�es, compliances and crea�ng awareness among members etc. KPFPCL started input management ac�vi�es like

procurement and sale of fer�lizer, farm inputs to members, which saved at least 10% in our cost of produc�on,” Rama Rao said.

KPFPC also took dealerships of the water & irriga�on companies, thereby facilita�ng cost-effec�ve sprinklers and drip irriga�on systems for its members. This has encouraged its members to grow more than one be�er quality crop in a year. The region changed its iden�ty from a Maize and Co�on belt by adding cash crops like Soybean, Chana, Tur, Rajma and Jowar through be�er water and crop management.

KPFPCL sealed a supply agreement with corporates such as Chalimeda Feeds in Karimnagar district, followed by top

poultry brands such as Suguna, Sneha, Vencobb, which ensured a consistent market for its produce.

As ge�ng remunera�ve returns remained a key challenge, FPC started exploring diverse op�ons and came across NCDEX in 2016. It took a lot of �me for the FPC to start trading on NCDEX due to lack of exper�se about the futures market. However, a constant educa�on, training and hand holding by the exchange officials persuaded the FPC to start trading a couple of months ago when it sold 5 tonnes of turmeric.

“We sold turmeric on NCDEX at Rs. 7,580 per quintal when mandi rate was Rs. 6,500. Subsidies on assaying & grading, packing and transporta�on etc. further helped to save 3-4% of our expenses, compared to what we would have incurred, had we sold it in the mandi,” Rama Rao said.

KPFPCL has mega plans of aggrega�ng around 300 tonnes of soybean crop from members in the Kharif season and selling as much of the same through NCDEX. This will be replicated in Chana in the Rabi season, Rama Rao concludes.

Farmer members of Kamareddy Progressive Farmer Producer Co Ltd (KPFPCL)

Commodity Corner- Moong

MOONGGENERAL INTRODUCTION OF MOONG India is the major producer of Moong. The total produc�on of Moong in India is around 20-30 Lakh MT annually Major producer in India: Rajasthan, Madhya Pradesh, Maharashtra, Odisha and Bihar Major global producers of Moong: India, Pakistan, Bangladesh, Sri Lanka, Myanmar, Thailand Major exporter to India: Myanmar

USES - MOONG (GREEN GRAM) Moong is majorly used for human consump�on. The key value of Moong lies in the rela�vely high protein content, essen�al amino acids, an�oxidants and vital vitamins. Research shows that Moong beans have proper�es that reduces heart disease risks and also aid in diges�on

FACTORS AFFECTING PRICES - MOONG (GREEN GRAM) Crop situa�on in the countries from where India is impor�ng Moong Insufficient rainfall at the growth period and heavy rainfall at the maturity period affects the overall produc�on Prices of the other compe��ve pulses Obstruc�on in informa�on movement

21

Contract Specifica�onsCommodity: Unprocessed Whole Raw Moong (Not for direct human consump�on)Ticker Symbol: MOONGBasis: Ex-Warehouse Merta City, exclusive of GSTDelivery Logic: Compulsory DeliveryQuota�on: Rs. per QuintalTrading and Delivery Unit: 5 MTTick Size: Re.1 For more details click on the below link:h�ps://ncdex.com/products/MOONG

NATIONAL COMMODITY & DERIVATIVES EXCHANGE LIMITEDAckruti Corporate Park, 1st Floor, Near G.E.Garden, L.B.S. Marg,

Kanjurmarg (West), Mumbai - 400 078T : (+91-22) - 66406789 | F : (+91-22) - 66406899 | Toll Free : 1800 26 62339

E-mail: askus@ncdex.com | Website: www.ncdex.com

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