Good arrivals at the terminal market are seen to be pressuring the turmeric market, which has declined in the past few days. Good carry-over stocks are also adding to the sentiments.
India is the largest turmeric producer with 75-80 % of global production, and demand for the commodity has been increasing rapidly from the medicinal and cosmetic industry.
Turmeric spot prices in the NCDEX counter on Wednesday evening stood at R6,540 per quintal. Turmeric April futures declined for the second consecutive session on Tuesday as market participants booked profit on expectations arrivals to gain momentum in the coming days. Arrivals are in the range of 10,000 bags daily in Nizamabad and 5,000 bags in Erode.
“The market may remain steady at this level till March and then move up due to lower production. We estimate production to be at 60% of last season. Most farmers have shifted to maize and tapioca. Only cash-rich farmers are staying in turmeric and they are holding the crop,” RK Viswanathan of Erode Turmeric Merchants Association said. The huge volume of carryover stocks is preventing a rally. In Erode, carryover stock is 22-25 lakh bags.
Broking firm Angel Commodities reports that turmeric futures may negative note on expectations of arrivals to gain momentum in the coming days. Good demand in the physical markets coupled with crop concerns in Andhra Pradesh may restrict sharp fall in prices. Production in 2012-13 is reported around 45 lakh bags, down by 40-50%, according to Angel.
The current year?s carryover stock is estimated around 10 lakh bags. (1 bag is 75 kg). Tamil Nadu Agricultural University reports that India?s domestic consumption and export demand requires 65-75 lakh bags of turmeric per annum. The university experts are of the view that new production and existing stocks would be unable to meet demand in the current year
Exports between April-September 2013 stood at 38,500 tonne, higher than 37,736 tonne in April-June 2012. According to Spices Board data, exports in the last fiscal touched 80,050 tonne as against 79,500 tonne in FY12.
Curcumin content of turmeric is an important factor in the price of the commodity and trade. Indian turmeric has the highest curcumin content and is preferred by extractors and grinders.
