The Hindu Business Line : Turmeric to remain bearish

Mumbai, Oct 5 The downtrend in turmeric futures in NCDEX is expected to continue in the short term on weak sentiment in the spot market besides a slowdown in demand from overseas market.

Markets took a cue from dismal output predictions due to scanty rainfall in the initial crop season. However, prices started falling mid-July after monsoon revived the growing areas.

Sowing activity started picking up in fully swing mid-July. Area under turmeric cultivation in the kharif season is expected to be about 1.69 lakh hectares against 1.64 lakh hectares registered in the same period last year, according to trade estimates.

With most of the agriculture commodities trading at its historic high levels, cropping pattern in the ongoing kharif season was disturbed. In Andhra Pradesh, most of the farmers shifted from turmeric to soyabean as it is a short duration crop and less labour-intensive.

Due to offseason and lower arrivals from the last year crop resulted in dull trading activity in the physical market. Moreover, domestic buyers have been staying away from the market in anticipation of further fall in prices.

Inventory levels are expected at about 1.2 lakh tonnes.

Price trend

In recent times, prices rallied to a historic high of Rs 5,267 in July on low production estimates. The revival of monsoon and marginal increase in area under cultivation brought the prices crashing to Rs 3,845 in October.

The fall in prices was further supported by favourable weather conditions in Andhra Pradesh and Maharashtra, besides a slow down in domestic and overseas demand. In Nizamabad markets, turmeric prices touched a high of Rs 4,600 a quintal, but came down to Rs 3,900 level on Friday.

If the prices break Rs 3,500 a quintal support level, it may further drop to Rs 3,500 a quintal which may trigger a good buying interest, said Mr Sushil Sinha, Assistant General Manager, Karvy Comtrade.