Though turmeric futures on the National Commodity & Derivatives Exchange (NCDEX) hit 2% lower circuit on Tuesday, price outlook may remain firm over the next few days on poor advancement of monsoon in south.
Futures on NCDEX hit 2% lower circuits and traded day?s low of Rs 5,292 per 100 kg on Tuesday on reports that sowing is expected to increase in the coming season due to better realisation in recent months, a trader said. ?There is still uncertainty in the market as advancement of monsoon will decide the fate of this commodity,? he said.
June futures rose nearly 11% in June so far due to improved buying in domestic market and there are some overseas enquiries for export. Futures rose 61% during the current season on lower supplies. Forecast by India Meteorological Department (IMD) reveals the monsoon delay by another one week has supported the prices, said Tarun Satsangi, assistant vice-president Bonanza Commodity .
There are lower stocks of turmeric left with the stockists and farmers and and the latter are also hoarding their stocks creating tight supply position in the domestic market, he added.
?Delayed advancement of monsoon over east, north peninsular and adjoining central India would have a negative impact on the kharif sowing activity in MP, Maharashtra and Gujarat. The sowing activity needs to be rescheduled. Soybean, cotton, sugarcane, pulses, turmeric and groundnut crops would be impacted,? Nalini Rao, analyst with Angel Commodities said. Total arrivals till May 2009 registered a fall of 12.5% to 41,594 tonne compared to 46,808 tonne against same period last year. ?The supply shortage is very pronounced and a very protracted stage,? Anand James, analyst with Geojit COMtrade said. Technically, futures are seen capped between Rs 5,258 to Rs 5,460 and one may go long around Rs 5,320-5,280 with stop loss below Rs 5,258 for the target of Rs 5,390-5,460 and above Rs 5,460, prices may test Rs 5,600.