The Hindu Business Line : Turmeric prices tumble

On Wednesday, turmeric was quoted at Rs 10,300 a quintal in the Nizamabad market in Andhra Pradesh. In Erode, where the spice fetches a premium, it ruled at Rs 10,500-11,500 a quintal. On November 17, prices at Nizamabad had touched a record Rs 12,800. In December last year, spot prices had ruled at Rs 3,800.

On NCDEX, the December futures contract ended at Rs 9,504 a quintal against Rs 12,006 on November 17. On the same day, the current month contract, which has ended, zoomed to Rs 13,791 a quintal.

“You can call the sharp decline a correction, especially with new arrivals being 30-40 days away,” said a trading source from Erode.

BUMPER CROP

“The new crop is reported to be in good condition. Therefore, prices have begun to drop,” said Mr Poonam Chand Gupta, a trader in Nizamabad. “However, the prices are looking to stabilise,” he said.

Traders estimate the new crop at 55 lakh bags (of 70 kg each). This is against 42 lakh bags this year.

“Barring Duggirala in Andhra Pradesh’s Guntur district, where the crop has suffered 30 per cent damage, it is in excellent condition in the other growing regions,” Mr Gupta said.

“It will be a bumper crop in Erode and the neighbouring parts of Tamil Nadu,” said the trading source.

The effect of the new crop reflected on the April futures which closed at Rs 6,855 a quintal on Wednesday.

“Prices may stabilise at current levels since the carryover stock could be around two lakh bags this year,” Mr Gupta said. But the trading source said the factor had been discounted. “We are unlikely to see a further rise in prices. Already, people are hesitating to buy,” the source said.

The record prices have led to poor physical and export demand. “After the prices dropped to around Rs 10,000, we have witnessed some export enquiries. It could result in some deals in the next couple of days,” Mr Gupta said.