Turmeric spot and futures prices may fall from the current peak in the short term, on increased fresh supplies and higher carryover stocks, despite reports of lower output estimates for the current season. Despite the fact that the current season?s crop is estimated lower by 15-20% over the previous season, local prices may come under pressure in the next few days due to long liquidation supported by fresh inflows of new crop in the physical market. On the other hand, fresh demand from bulk buyers is reportedly good.
Turmeric output during the current season is anticipated to decline to 7-7.5 lakh tonne, against 8.9 lakh tonne in the last season. Carry forward stocks in the beginning of the season are expected to be around 1 lakh tonne, according to a special seasonal report released by Karvy Comtrade Ltd. Andhra Pradesh accounted for 60% of total turmeric production in the country, followed by Tamil Nadu (17%) and Orissa (7%). Since the inception of the May 2008 contract on the NCDEX platform, prices were on an up trend and tested a historical high at Rs 3,554 levels in the first week of March, witnessing an overbought condition in the market. The domestic market is in an overbought condition and a correction has not been overruled on this rally in the near term. ?We expect a good correction on this unprecedented rally. We expect the price to trade in the broad range of Rs 3,100 levels on the down side and a breach of Rs 3,100 may see prices to test Rs 2,900-2,950 levels,? An analyst with Karvy comtrade said. The May and June 2008 contracts prices are trading at Rs 3,470 and Rs 3,530 levels respectively. Spot prices are quoting at Rs 3,100 per quintal, leaving a difference of Rs 300-400 a quintal.
Daily inflows of turmeric in the physical market at Nizamabad mandi are around 15,000-20,000 bags and expected to increase to 25,000.