Turmeric at 5-Year Peak: Traders See Price Rally Far From Over; Firm Demand Expected Until Mid-May

Mumbai (Commodities Control) - Shining at Five year highs, firm demand and shortage of good quality supplies is consistently pushing turmeric prices northward in spot and futures markets. Turmeric futures on NCDEX hit 4% upper circuit, for the third straight session, while the most-active futures contract has surged 45% since February 1.

During the week so far, turmeric futures have upped 12%, similar to last week. Futures prices have been closely tracking a spot markets’ trend amid firm demand and fears of lower output in the spot markets.

On Wednesday, the apex Nizamabad mandi registered steady price levels amid unchanged arrivals of 20,000 bags. However, mandis of Erode, Sangli and Nanded have reported price gains for all their respective varieties in the range of Rs 100-400 per Quintal today. Erode mandi, the yellow spice prices rose by Rs 200-400 per Candy for Finger and Gathha variety, amid arrivals of 2,100 bags vs 3,100 bags in the last session. Prices upped Rs 300-500 per Candy in the last session.

The April contract of turmeric on the National Commodity and Derivatives Exchange ended with yet another upper circuit at Rs 9,336/Quintal,hitting past a strong technical chart resistance of Rs 9,000. May futures settled at Rs 9368/Quintal. Futures contracts of Turmeric on the National Commodity and Derivatives Exchange hit the 4% upper circuit for the third straight session due to expectations of a smaller crop in the current season.

In the last session, the most-active April contract of the spice rose 4%, hitting a five-year high of 8,978 rupees per 100 kg.

Unseasonal rain in key turmeric-growing states like Maharashtra, Karnataka and Telangana may hit yield this season, Kotak Securities said in a report. Production is likely to decline 10-15% in the 2020-21 (Jul-Jun) season, and lower carry-forward stock may support prices, market participants said.

Mumbai-based spices trader Pankaj Thakkar reveals, “Rising prices would not deter fierce demand from local buyers, stockists or even exporters, as Holi is just weeks away and Ramadan falls in early this year”. “Demand is here to stay until mid-May and prices can easily head higher by another Rs 10/Kg from here, adds Thakkar.