MUMBAI (Commoditiescontrol) - With good buying, there is a possibility of a rise in red chilli prices, while fresh purchases can increase demand for turmeric.
However, bumper production may pressurise jeera prices. On the other hand, lacklustre demand and limited buying are likely to lead to weakness in coriander.
Turmeric
Buying at lower levels and reports of decline in production can support turmeric prices. Moreover, prices can be strengthened in the spot market in the coming weeks due to low arrival.
According to sources, the total arrival of new crop in the spot market during May 1-21 was 40,400 tonnes as against 56,568 tonnes in the corresponding period last year, which reflects lower production this year.
According to analysts, prices may remain positive due to thin stock with traders, fresh domestic buying and export enquiries.
The prices may increase due to low production in 2017-18, but at the same time, report of low export can put pressure. India's April-December exports declined by 6 percent to 80,400 tonnes.
June futures of turmeric on NCDEX opened the week at Rs 7,250 and closed at Rs 7,122 on Friday due to selling pressure.
Due to slowing of arrivals in spot markets, limited selling and good demand from North India, buying can increase, which is likely to support prices from lower level in the coming period.
Around 60 to 62 lakh bags of turmeric is expected to be produced in India this year while the old stock of last year can be around 20 to 22 lakh bags. So the total supply is expected to be around 80 to 82 lakh bags this year. While the total domestic and export demand/consumption can be around 72 to 75 lakh bags, resulting in reduction in the carry forward stock by around 7 to 10 lakh bags for 2019.
But on the other hand, farmers in Tamil Nadu, Maharashtra, Andhra Pradesh-Telangana and other key producing areas, may increase sowing/acreage next year owing to better realisation. Because of this, this year, uptrend may sustain for only a few months. However, buying may increase gradually, resulting in an upside in prices from next month.
Coriander
According to the local trader, due to heavy selling pressure, there is not enough support for coriander, which can reduce the prices during the coming week.
In the last one year due to losses in the coriander, this year farmers had reduced the sowing, hence in India, the production has decreased this year.
The Federation of Indian Spices Stakeholders (FISS) has estimated coriander production in India at 4.82 million bags in 2017-18 due to decline in sowing areas. During April-October 2017, a total of 27,255 tonnes of spice was exported, which was higher than last year's 23,603 tonnes. However, due to weak global prices, the value of exports has dropped by 4 percent.
According to traders, this year the coriander crop is low, but due to bumper crop last year, good quantity of carry forward stock has left. At this time there is pressure on the prices due to the arrival of old crop amid the arrival of new crop.
Weakness in the prices of Badami and Eagle varieties is increasing but stability can be seen in good quality and green coriander.
According to some traders, there may be a pause in the fall during the next one or two weeks, because prices have become more vulnerable than they should be, due to which the traders can stock the spice at the lower level, which can ultimately stop the decline.
Red Chilli
Chilli prices are showing upside due to lower production, local demand and fresh export enquiries.
Guntur is the largest red chilli market in the country and due to summer, it is closed for one month during May-June every year. The market of Guntur will reopen from June 10.
This year, the production of chilli has decreased because the farmers had sown in lower areas. Last year, the farmers had suffered huge losses due to decline in prices owing to the bumper production.
India is the biggest contributor to the international market. By exporting 353,400 tonnes, chilli earned Rs 3,241.83 crore in April-December 2017 as against 260,250 tonnes and Rs 3,460.83 crore respectively during the same period in 2016.
Demand for red chilli is seen in North India at this time, but due to the closure of Guntur's market and limited arrivals in other markets, buying is on the rise.
According to traders, out of the total stock lying at Guntur's cold storage, 60 to 65 percent of stock is of exporters while the remaining is of Indian traders. This can be judged from where can the prices go up due to the lack of supply in the Indian market?
On the other hand, due to the constant increase in consumption, the demand for red chilli in Indian markets is steadily rising, which could lead to the upside in the market.
Jeera
Prices of jeera are expected to move up sharply on the back of rising exports, but bumper production is causing pressure on the prices, due to which there is a possibility of trading in the limited range.
Although export demand may be increased in the coming weeks, therefore slight increase in prices can be expected.
India exported 104,260 tonnes of jeera during April-October 2017, compared to 91,024 tonnes during the same period a year ago on the back of growing demand from China and Bangladesh. Although demand is still coming slowly from China and Bangladesh.
Prices may be supported by light demand in the spot market amidst limited supply. Export demand for jeera is expected to strengthen the existing level.
The supply may be reduced from other producing countries due to geo-political tension. Meanwhile, there is continuous rain in Syria which is positive for the Indian spice as it might affect the export.
Meanwhile, traders are waiting for the monsoon. As per the India Meteorological Department (IMD), the southwest monsoon is expected to hit Kerala on May 29, three days ahead of its normal onset date.
On the other hand, the crisis of dollar (foreign exchange) in Bangladesh is increasing. The Bank of Bangladesh is deciding the guidelines for foreign remittances. If this crisis persists then the export of jeera can be affected as remittance can stop due to the crisis of banks due to which the supply of jeera will not be available which can cause pressure on the prices.
Although the demand from Taiwan and China is increasing, due to which the pressure coming on the prices may be reduced for some time.
According to market sources, the possibility of limited trade is increasing because prices are getting support from demand at both domestic and export fronts. But due to higher production, consistent pressure may develop.
(By Commoditiescontrol Bureau; +91-22-40015567)
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