Turmeric prices have not eased as expected despite poor demand as farmers are holding on to their produce and not willing to sell at lower levels.
Traders said though the peak demand season is coming to a close, prices have eased only a tad. Meanwhile, prices in the futures market firmed up a bit on Wednesday on short covering. Spot prices in Erode was quoted at Rs 147 per kg on Wednesday.
?Sluggish demand has seen farmers holding on to their stocks rather than sell. They are not keen to sell at low prices. The market may ease a bit as big demand is over,? RK Viswanathan of Erode Turmeric Merchants Association said.
During monsoon season, the quality of turmeric stocks goes down due to high moisture content. Turmeric farming has been extremely rewarding in the last few years as prices have rallied because of robust demand and lower stocks.
According to a Spices Board data, price for one kilogram of turmeric at Erode in the week ending May 22 was quoted at Rs 143.96 per kg as against Rs 137.46 during the same period last month.
During the same period last year, one kilogram of turmeric fetched just Rs 59.50, which translates into 140% increase in just one year.
Good returns from turmeric and a normal monsoon would mean increase in area next season, Viswanathan said.
A Karvy Comtrade report said that normal and timely monsoon is expected to push up turmeric acreage by nearly 30% during this year?s kharif season.
But most of the analysts and traders don?t see the market coming down in the near-term.
? Prices may ease a bit because of poor demand but it will not go down much because of stockholding by farmers,? Viswanathan said.
Sudha Acharya of Kotak Commodity Services feels that the market is firm and bullish. ?The demand is still good. We have good export demand from the Middle East and Japan,? she said.
Nalini Rao, a research analyst at Angel Commodities Broking is however bearish on turmeric on the long-term over reports of good monsoon and increased farming of turmeric.
Turmeric availability in the last financial year was estimated to be lower at around 42-45 lakh bags as against the earlier estimate of 52-54 lakh bags.
