The Hindu Business Line : Turmeric prices seen weak

Chennai, Aug. 19 Turmeric prices are likely to decline in the short term on concerns that demand may be sluggish and also due to ample stocks with traders . Besides, rains that lashed North India last week led to piling up of stocks in various mandis and stockists may not come forward to place fresh orders.

According to Sharekhan, spot prices are expected to rule at the current level of Rs 2,100-2,150 a quintal.

But a section of the trade is betting on a rise in demand from exporters, especially from West Asia due to Ramzan.

A note by Kotak Commodity Services Ltd, turmeric prices could test Rs 2,080 levels despite festival demand from stockists and exporters. On the upper side, turmeric could face resistance at Rs 2,152 and beyond that at Rs 2,203. Last week, turmeric witnessed a bearish trend and remained range-bound on the NCDEX. Trading in August contract was dull throughout the week. The week began with negative tone and finished lower. Downward trend and dropping open interest at the fag end of the week point to long liquidation. Added to this, the volume with decreasing price also suggests that the commodity is likely to do a lacklustre performance in the markets.

Angel Broking Ltd in its analysis said there are chances for the prices to look up in the near term in view of reports that farmers are shifting to other crops, leading to lower acreage of the crop thereby paving way for higher demand.

According to it, turmeric production this season could be 42-45 lakh bags compared with 51 lakh bags last year. In the spot market, there is possibility for the prices to rule stable.