Weekly: Spot Turmeric Rises To 2-Month High; Other Spices Positive As Well

MUMBAI (Commoditiescontrol) - Spot Turmeric rose to 2-month high during the week ended Friday on better domestic demand supported by bullish futures with positive tone witnessed in Coriander, Chilli, Jeera and Black Pepper (Garbled). Activity in the market was thin amid GST, but lower supply and positive movement on futures helped prices to trade higher.



Turmeric
Turmeric prices rose fourth straight week by 5.85% at Rs 6,288/100kg at the key Nizamabad market of Andhra Pradesh due to good domestic export demand followed by concern about fall in area.

Buyers were active in the market, but demand was not as strong as reflected in prices, said a trader from Nizamabad. Actually buyers have procured material in the recent times, but with hesitation due to rollout of GST as they were with not very much aware about procedures and rules of GST, he added.

However concern about fall in area prompted them to procure enough material to make if trend turn more bullish ahead, he said.

Farmers in Maharashtra is expected to shift to Sugarcane from Turmeric as prices were not good so far this season, which has disappointed them to change their minds. Farmers fetched good rates for Sugarcane last season, which is encouraging farmers to shift from turmeric, said traders.

Further there is also probability of fall in acreage in Tamil Nadu in specific region mainly due to poor rainfall and less rainfall, however acreage may recover in case of good rainfall in turmeric producing belts.

Turmeric outlook for the near term seems positive, but a lot will depend of sowing progress followed by rainfall.

Turmeric July futures ended this week at 2-month high. It rose 3.70% at 6,378/100kg, highest level afer April 26, on the National Commodity & Derivatives Exchange Ltd (NCDEX). The contract during the week traded between Rs 6,100 to Rs 6,550. Open interest and volume dropped gradually during the week, which is a indication that bulls are getting out at higher level and hence one should approach cautious trade next week.

Coriander
Coriander rose as much as 2.43% at Rs 5,386/100kg at the Kota market of Rajasthan during the week ended Friday due to lower supply of commodity with some improved off take at the lower level.

Coriander prices also got support of delay in rainfall in key producing regions of Rajasthan, however it's a temporary as Coriander is sown in October-November, so delay rainfall will not impact much the current fundamentals, said traders.

Stocks in the country is ample to cater demand, but slow farmers selling may help prices to trade around these level, they claimed.

Coriander could rise this FY 2017-18 mainly after setback in the last couple of years, due to lower prices. However any major upside in prices will make it competitive, so we don't see any sharp rise in coriander this season, they added.

The supply-demand balance sheet is very much balanced and any major order in front of export could make it tight, other wise there is no concern about availability, they noted.

NCDEX Coriander July futures closed this week 1.42% lower at Rs 5,033/100kg after trading between Rs 5,024 to Rs 5,310. Actually the uncertain fundamentals of coriander prompted buyers to lock their profit this week after previous week rise in prices. Open interest dropped significantly this week, but volume stayed mostly flat. Range-bound trade could be seen next week in Coriander futures.

Red Chilli
Red Chilli gained 1.71% at Rs 4,933/100kg at the key Guntur market of Andhra Pradesh. Activity in the market was not great due to steady supply and the rise in prices were mainly attributed to increased rates by sellers. Few good trade observed in premium quality at elevated rates, however trade as whole was mostly flat.

Red chilli export demand is likely to stay flat or increase this FY 2017-18 after robust export in last season. Red chilli prices are very attractive for overseas buyers as they are getting it now at more than 50% less rate compared to last year.

Red chilli stocks in the country is ample and thus prices are likely to trade steady to week in the near term, however prices may see some minor upside in case of good export demand.

Jeera
Jeera remained positive during the week with gain of 0.88% at 18,705/100kg at the Unjha market supported by good domestic and export demand followed by some positive cues from futures.

Domestic demand during the week was normal, but export inquiry was much better, said a trader from Unjha. Domestic buyers were hesitant to make major deals mainly due to GST. However it is likely to turn better in next few weeks, he added.

Jeera is fundamentally positive as demand-supply is tight. Now very thin stock left with farmers and still 8 month remaining for next new crop to arrive in the market.

Jeera stocks with farmers are now expected somewhere around 15 lakh bags (55bags) and with monthly consumption of 3 lakh bags, it will be difficult to meet demand. However there are stocks with stockists, but they are likely to release their stocks in gradual manner at the higher level.

There is higher possibility of Jeera prices to test 21,000-23,000 level this season, according to trade sources.

NCDEX Jeera July futures edged higher by 1.72% at Rs 18,910/100kg. The contract during the week hovered between Rs 18,480 to Rs 19,275. Open interest and volume were lackluster in the contract during the week mainly due to less trade participation ahead of GST. Jeera price may trade steady with positive bias next week.

Black Pepper
Black pepper prices at the key Kochi market moved up by 0.79% at Rs 50,800/100kg due to some good buying interest for high bulk density pepper. There are specific markets for high bulk density material and that in turn has aided the price rise. Tamil Nadu based dealers reported to have bought high bulk density Rajkumari Pepper at Rs 515/kg.

Trade activity in the market was mostly thin amid doubts and confusions over the GST process were keeping buyers away from the market, probably till the new system gets into smooth operation.

Indian parity in the international markets was at $8,125 a tonne cf for Europe and $8,375 a tonne cf for USA.

(By Commoditiescontrol Bureau; +91-22-40015533)