Turmeric spot and futures prices in the domestic market turned bearish this week and may continue to remain low in the next one month or so on expected higher fresh inflows in the states of Andhra Pradesh and Tamil Nadu in view of good crop prospects. NCDEX April futures fell by nearly Rs 100 to trade at Rs 3,665 per quintal in the past one week, but spot prices at Nizamabad were higher at Rs 3,921 per quintal last week on scattered demand.
In 2009, the overall crop is expected to be better than 2008 at around 45-48 lakh bags. Acreage in Tamil Nadu, especially in Erode, is expected to increase by nearly 25% as the farmers in the region have realised better profits from the previous crop, trade sources said.
?Estimates for 2009 being better,may pressurise the prices once the fresh inflows commence at the terminal markets,? an analyst with Angel Commodities said. Fresh arrivals are expected to commence by the last week of January and would reach to peak by the end of February or March, a local trader said. Fresh inflows normally commence after Pongal celebrations.
?Higher supplies and anticipated low export demand would definitely affect the market sentiment. Currently, there are some enquiries from north India, but very few deals heard. I think stockists? buying will come in the month of March and April. Till that time prices will remain under pressure,? he said.
Production in the year 2008 was lower at about 40-42 lakh bags. The decline in production was on account of erratic and inadequate rainfall at major growing areas like Nizamabad and Erode. ?Technically, prices are expected to trade in the range of Rs 2,000-Rs 3,500 in the first half of 2009. During the second half, prices may be determined by the export and domestic demand prevailing at that time,? an analyst said.
The third quarter of 2008 witnessed a decline in exports due to the global financial turmoil which led to decline in demand and consumption of the commodity.