Turmeric likely to surge on strong demand

Prices have gone up 37% since October, may touch Rs 3,000.

Turmeric prices are likely to touch Rs 3,000 a quintal in a fortnight on the back of strong overseas and domestic demand.

The post-harvest contract (April) has seen a steady rise in prices since mid-October last year. The market zoomed from Rs 2,118 a quintal to Rs 2,895 a quintal, up about 37 per cent. The bullish sentiments were stoked by expectations of lesser output this season following a fall in acreage.

Faiyaz Hudani, a commodity analyst at Kotak Commodities, said, "As the market has broken the resistance of Rs 2,875, it is set to shoot up to Rs 3,000 a quintal level." The bullish trend would continue in the current year as well as in the coming ones, he said.

However, some traders are keeping their fingers crossed on whether the commodity would sustain at higher levels. "It could come down as turmeric is already trading at higher levels," said Manu Shah, a Mumbai-based turmeric trader.

Commodity analysts at Motilal Oswal said the Rs 3,000 mark was within reach but warned that it may not sustain at those levels.

Market reports suggest that stockists in Sangli (a major turmeric production centre in Maharashtra) are heavily into buying. "Such buying activities with the expectation that the output will be on the lower side is stoking market sentiments," said commodity analysts at Angel Broking.

According to market sources, the market may not turn bearish as corporate buying was strong. On the National Commodities and Derivatives Exchange, the April contract closed on Thursday at Rs 2,886, against the previous close of Rs 2,895 a quintal.

Output paradox
Meanwhile, commodity analysts said the turmeric output may come close to 45-46 lakh bags (each of 75-80 kg) this year against the earlier market estimate of 42-43 lakh bags.

According to them, a better yield may tone down the effect of decline in acreage. "The overall output will be lower than the last year's output. But there won't be a drastic fall in production," said Sudha Acharya, a commodity analyst at Agriwatch Commodities. Hudani was also of the view that the crop could go beyond 45 lakh bags this season.

However, many traders have put the output at around 43 lakh bags, with some expecting a much lower production. Milan Shah, a Sangli-based trader, said, "The overall crop could drop down to 40 lakh bags as the crop from Andhra Pradesh (Warangal, Nizamabad) is poor."

Though the crop from Andhra and Tamil Nadu is said to be damaged, market sources expect the crop from Maharashtra to fill the gap in production. Last year, the country produced 52 lakh bags. Currently, the carry forward stock is around 10-12 lakh bags.

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UPWARDLY MOBILE

Turmeric futures to cross the Rs 3,000 mark

Market surged 37% since October last year

Commodity may not sustain the high levels

Stockists buy heavily in Sangli

Crop output could see an upward revision of 7%

Turmeric with high moisture content has started arriving

Supply pressure to be felt by the first week of March