The Hindu Business Line : Turmeric may dip on good crop, stocks

Spot prices at the Nizamabad mandi, a major turmeric centre, were down about Rs 100 at Rs 3,130 per 100 kg on Friday against Rs 3,225 on October 1, on limited export enquiries and sluggish demand.

Forward prices of December 2004 and April 2005 contracts at the National Commodity and Derivatives Exchange were down around Rs 150 per quintal at Rs 3,377 and Rs 2,712 per100 kg respectively on Thursday over the past fortnight period.

"Lower forward prices over current spot prices are indicating good supply and adequate stocks as against restricted seasonal buying (especially Diwali and Ramzan) which is almost over," a local trader said.

"Overall demand for export as well as domestic market was below average. Trade enquiries for export from Gulf countries are negligible. On the other side, supply remains steady thanks to enough stocks. Currently, stocks-on-hand with traders and farmers are estimated to be around 11-12 lakh bags (of 90 kg). Looking at current demand situation, carry forward stock at the end of the current season is expected to be around two lakh bags," a leading broker of Sangli said.

Big farmers of Erode and Dugirala centres hold a majority of the stocks. They may release part of the stocks from Diwali, he said.

"The prospects of new turmeric crop are good thanks to adequate and timely rains in all turmeric producing areas. The new crop for the next season is estimated to be around 45 lakh bags compared to the actual crop of 35 lakh bags last season," the broker said.

"New arrivals at major mandis such as Erode and Nizam are expected to start by the end of December and it will pick up from the second week of January 2005. Subsequently, fresh arrivals at other major centres such as Dugirala and Warangal are expected to begin around March," a local trader said.

"Domestic prices are expected to rule lower on expectation of good supply in the short run. However, fresh demand for exports will remain good during the new season as turmeric is not just a spice but also has medicinal properties," he said.