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Turmeric Futures Hit Lower Circuit Tracking Weak Spot Markets amid Surging Arrivals; Tech Analysts Hold Bullish View

8 Mar 2021 7:03 pm
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Mumbai (Commodities Control) - Turmeric futures on NCDEX collapsed on Monday after touching five year highs last week. The drop came tracking decline in spot markets, as apex spice mandis registered drop across major varieties amid rising arrivals and reduced buying at elevated levels.


Turmeric futures had rebounded by nearly 2.9% on Friday, after it collapsed over Rs 300 on Thursday amid profit booking from five year highs. It is to be noted that the most-active future contract surged over 45% since February 1.

This, traders, attribute to expectation of a smaller crop is in 2020-21 (Jul-Jun) while demand remains firm. Production is likely to decline 10-15% due to fall in yield and heavy rain in key growing states. Lower carryover stocks too supported prices, market participants said.


Recently, Arrival of fresh turmeric and an increase in demand pushed the price of turmeric to Rs 10,000 a quintal at the regulated markets here.


On Monday, apex Nizmabad mandi witnessed a steady trade only in Finger variety that surged Rs 300/Quintal, while all the other varieties sunk Rs 100-200 amid increased arrivals of 45,000 bags vs 16,000 bags in the last session.


Mandis of Sangli and Erode reported declines in the range of Rs 100-300 per Quintal amid increased arrivals of 32,500 bags vs 15,376 bags in the last session for the former. Erode mandi registered arrivals of 2,700 bags of yellow spice today. Even at Nanded mandi, where Finger variety touched Rs 10,000 per Quintal levels witnessed a drop of Rs 50-500 for both the varieties of turmeric.


On Monday, April and May futures contracts ended with a 4% lower circuit and 3.21% lower at Rs 8894 and Rs 8976 respectively. On Friday, the two contracts settled sharply higher at Rs 9,282 and Rs 9,300 respectively.Last week, the most-active April contract hit over five-year high of 9,522 rupees on Wednesday.


Having said so, spice traders do not see rising prices being a deterrent for a long period of time as demand from local buyers, stockists or even exporters is fierce ahead of Holi and Ramadan. They add that demand is here to stay until mid-May.


Erode Turmeric Merchants and Godown Owners’ Association note that due to COVID-19, the demand for turmeric, that helps boost immunity, has picked up both at domestic and global markets whereas there is a shortfall in supply. They add that ‘Area under cultivation across the country dropped by 20% in 2020 while there is a good demand in 2021’, and added that the price of turmeric is expected to increase in the next three months.


Meanwhile, technical analysts are bullish in the short-term on weekly charts and see the next resistance at Rs 10,000/Quintal, while a strong support lies at Rs 8,500/Quintal.


Commodity

Market

Variety

Price

Price

Prev_Price

Prev_Price

Change(Max Today-Prev Max)

Arrival

Turmeric

Nizamabad

Gattha

7600

7700

7700

7800

-100

45000

Turmeric

Nizamabad

Finger

7800

8800

7500

8500

300

Turmeric

Nizamabad

D P Finger

8800

9000

9000

9200

-200

Turmeric

Nizamabad

D P Gattha

8600

8800

8700

8800

0

Turmeric

Sangli

Kadapa

8600

8700

8700

8800

-100

32500

Turmeric

Sangli

Rajapuri

9400

9500

9700

9800

-300

Turmeric

Erode

Finger

9000

9200

9100

9300

-100

2700

Turmeric

Erode

Gattha

8800

9000

8700

9100

-100

Turmeric

Hingoli.

Finger

7300

8700

0

200

Turmeric

Nanded

Gattha

8000

8500

8000

8550

-50

550

Turmeric

Nanded

Finger

8000

9500

8500

10000

-500



       
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