Turmeric: Futures Price Rises 8% in Two Sessions as NCDEX April'21 Nears Rs 9,000/Q; Spot Mkt Rally Intact

Mumbai Commodities Control - Turmeric futures on NCDEX hit 4% upper circuit, for the second straight session resulting in price gains of 8% this week so far, for April and May '21 contracts on Tuesday. Futures prices have been closely tracking a strong rally in spot markets amid firm demand and fears of lower output in the spot markets.

On Tuesday, the apex Nizamabad mandi registered price gains of Rs 200-300 per Candy amid unchanged arrivals of 20,000 bags. Even at Erode mandi, the yellow spice prices rose by Rs 300-500 per Candy amid arrivals of 3,100 bags vs 3,200 bags in the last session.

The crop is feared to be 20-25 per cent lower in the Nizamabad region as unseasonal rains hit the growing regions last year.

The April contract of turmeric on the National Commodity and Derivatives Exchange ended Rs 344 higher at Rs 8,978/Quintal and May futures settled past Rs 9008/Quintal. Futures contracts of Turmeric on the National Commodity and Derivatives Exchange hit the 4% upper circuit for the second straight session due to expectations of a smaller crop in the current season.

This sharp rise in the price of yellow spice, according to the market experts, is affecting export prospects of turmeric.

“Prices have topped Rs 9,000 in private markets in Erode. They have surged on talks of crop shortage,” according to Erode Turmeric Merchants Association. Prices have increased by Rs 3,000/quintal in the past fortnight until February-end.

Meanwhile in Maharashtra, rumours claim that the crop is 10-40% lower. This fear is keeping turmeric prices elevated in Sangli and Nanded mandis as well.

Meanwhile technical experts see turmeric April’21 futures on NCDEX on an upward trajectory with a strong resistance at Rs 9,000/Quintal.

Lower returns from the crop and labour shortage due to the pandemic led to a 15% drop in sowing. Further, yield loss because of rains at the growth stage has hit production this season. Production is likely to decline 10-15% in 2020-21 (Jul-Jun), owing to a drop in yield and heavy rains in key growing states in October. Lower carry-forward stocks may continue to support prices, market participants said.