Demand, Hoarding Drive Up Turmeric

MUMBAI: Turmeric prices have risen by Rs 400 per quintal over the past month on demand and holding by stockists. Indications of low crop this year have also pushed up futures prices on NCDEX. The commodity is currently trading at Rs 2,425-2,500 per quintal in Nizamabad while at Duggirala, turmeric loose is trading at Rs 2,250-Rs 2,350 per quintal.

NCDEX December contract has moved up by over Rs 300 per quintal over the past month and the contract closed up 2.2% at Rs 2,376 per quintal on Thursday. The April contract has also moved up by Rs 336 per quintal and closed 1.6% up at Rs 2,663 per quintal on Thursday.

Duggirala-based trader Dungarchand Kanungo said that with low crop projection for the coming year, stockists are holding their stocks expecting a rise in prices. “There are good stocks, but stockists will bring their crop to the market only after March, expecting prices to move up,” said Mr Kanungo. Usually, there is no demand from stockists during December. But this year, there has been demand looking at futures prices.

Though it is too early to project the production, traders feel acreage has fallen this year as farmers got low prices. However, since carryover stocks are good at around 10-12 lakh bags (one bag weighs 70 kg), the total availability will be almost the same as last year.

Nizamabad-based trader Manmohan Daliya also feels stockists will not offload carryover stocks to the selling centres next year, which will keep prices high.

Meanwhile, arrival of new crop will start from Nizamabad and Erode followed by Duggirala and Warangal from mid-March. As many as 52-55 lakh bags of turmeric were produced last year and 45 lakh bags are expected to be produced this year. With favourable weather conditions, the quality is expected to be good.

A research analyst from Angel Commodities feels the futures price for the April contract will be at these levels for sometimes and will come down only after December end to January.