Weekly: Spot Turmeric Rises To 5-Month High; Jeera Touches Nearly 1-Year High

MUMBAI (Commoditiescontrol) - Turmeric prices in the spot market rose to 5-month high during the week ended Friday supported by robust domestic demand on the wake of dry weather in producing regions. Jeera also followed the suit with rising to nearly 1-year. Coriander rose a tad tracking slow arrivals in the spot markets. Red chilli market opened after a couple of week closure due to row over GST with Black pepper ended the week in negative territory.



Turmeric Turmeric was the among the hot items in spices complex as prices during the week at the benchmark Nizamabad market rose 11.69% at Rs 7,327/100kg due to strong demand observed in the spot markets from local, upcountry buyers followed by exporters inquiry. Though prices in the spot market has rose to 5-month high, but it gained to 11-month high on futures.

Inadequate showers in the main growing regions and expectation of lower acreage for sowing have pushed turmeric on both spot as well as on futures.

Erratic rainfall over turmeric growing regions of Andhra Pradesh, Telangana, Tamil Nadu, Karnataka and anticipation of lower acreage due to a plunge in prices last year have led to the current price rally, traders said. The sowing has begun and will continue till August.

Turmeric prices had crashed over 30% a few months ago following a bumper crop in most of the growing states except Tamil Nadu, where drought reduced the output. The prices bottomed Rs 52 per kg and robust exout to ports prevented prices from falling further.

Turmeric sowing in Andhra Pradesh as on July 12 stood at 5,000 hectares against 200,000 hectares target set by state government for kharif 2017. Sowing in Telangana as on July 10 reached at 23,000 hectares versus 21,000 hectares same period last year.

Turmeric export during the first month of new financial year dropped 6.54% at 2,185 tonnes against 2,337 tonnes last year. India's turmeric export during FY 2016-17 rose at 116,500 tonnes against 88,500 tonnes a year ago.

Turmeric August futures during the week jumped up nearly 9% to close at Rs 7,520/100kg on the National Commodity & Derivatives Exchange Ltd (NCDEX). Volume and open interest during the week was mostly flat indicating that bulls may continue to dominate ahead. However one should keep a close eye on weather as good rainfall in case happens in turmeric producing regions that some good correction in prices can't be ruled out.

Jeera
Jeera was the second best performer in spices during the week with prices rose as much as 4% at Rs 19,457/100kg at the benchmark Unjha market, however it climbed up over 8% on futures. The market players are very bullish in the commodity as thin stocks left with farmers supported by strong domestic and export demand.

According to industry sources, less than 15 lakh bags left in hands of farmers, whereas stockists are holding a decent quantity of crops, but neither farmers nor stockists likely to liquidate their crops easily as there are more bullish in the commodity and expecting it to cross Rs 22,000 in next few months.

Export demand for Cumin seed is said to be strong, particularly from China, which was the main buyers of Jeera in FY 2016-17. The country's Jeea export in FY 2016-17 was much better than last year and likely to continue to dominate world market since India has sufficient quantity agaist its rival Turkey, Syria and Iran.

On futures, Jeera August futures has breached crucial barrier (resistance) of Rs 20,000 and this provide a good acceleration in prices driven by bullish fundamentals. However one should be cautious at the higher level at least on futures as some temporary correction can't be ruled out after recent sharp surge.

Volume and open interest on August contract was positive during the week and with bullish tone on prices, it seems that Jeera prices is set for another weekly gain next week.

Coriander
Coriander ended the week with marginal gain helped by lower supply in the market due to slow selling by farmers at the lower rates. Coriander futures also follow the spot market and most-Acitive August futures closed higher this week. Coriander availability in the country is said to be enough to meet domestic and export demand, and thus sharp rise in prices unlikely in the near term, however with festival demand ahead, some revival in prices can't be ruled out.

Sharp rally in Coriander prices also not likely because higher prices may prompt overseas buyers to source the commodity from cheaper destinations like Russia and Ukraine. Both the countries in FY 2016-17 emerged as largest exporter of the commodity, snatching India's dominance over the years. Even Indian buyers sources a large quantity of Coriander in FY 2016-17 from Russia and Ukraine due to very attractive rates.

Some temporary rise in Coriander expected due to festival season, but sharp rally will be capped by sufficient supplies followed by expectations of dent in export demand at the higher level.

Black Pepper
Black pepper at the benchmark Kochi market ended the week tad down due to slack demand from upcountry markets where availability of exchange released pepper and imported material is on the rise. Prices were also weighed following availability of imported pepper in the upcountry markets at lower rates. Besides, as the rainy season has arrived in north Indian states the grinding industry has also stopped buying. The reported panic sales by Indonesia of late creating a bearish sentiment in the international markets have also influenced the prices here, trade sources claimed.

Exchange released pepper is offered by cartels at Rs 490/kg while pepper allegedly imported from Vietnam via Sri Lanka was being sold at Rs 485/kg. Karnataka was offering its produce at Rs 475/kg.

Indonesia and Brazil have been quoting at $3,500- $3,600 a tonne Aug/Sep/ Oct shipments, they said. Meanwhile, Sri Lanka, where harvesting has begun, was offering at $5,500 a tonne to Indian importers under the Indo-Sri Lankan free trade agreement under which the Island nation could export duty free 2,500 tonnes.

Indian parity in the international markets was at $8,150 a tonne cf for Europe and $8,400 a tonne cf for USA. Meanwhile, Sri Lanka was offering 525 GL FAQ $ 5,650 $ 5,850 a tonne July shipment and 550 GL FAQ at $ 5,750- $5,850 a tonne August shipment. Other origins quotes: Vietnam : VASTA - with Max 3 per cent light berries $4,000 - $ 4,250 a tonne Aug-Dec shipments; Brazil - BASTA - 570 GL - FOB $3,550 Aug shipment, B1 - 560 GL - FOB basis $3,500 - Aug shipment, B2 - 500 GL - FOB basis $3,400 Aug shipment. Ecuador ASTA - with pre-payment at $3,790 a tonne Aug/Sep shipment.

Red Chilli
Red chilli opened on Thursday at the key Guntur market after a couple of week closure due to row over GST. Further Guntur Agricultural Produce Market Committee on Thursday resumed sale of red chillies from cold storages after a one-month hiatus. Arrivals of chilli in Guntur, Andhra Pradesh, were pegged lower, but likely to improve from next week onwards in the range of 50,000-100,000 bags.

Sale of chilli from cold storages was banned in June in order to help farmers sell their produce under the state government's price support scheme. Superior quality chilli from cold storages was preferred over stocks with farmers.

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