Huge stocks, drop in buying interest to keep turmeric prices subdued

Turmeric prices in the run-up to fresh sowing season is expected to remain subdued amidst various factors including huge stocks of low-quality produce and a drop in buying interest.

Barring a few spikes in prices here and there, traders are not aggressively quoting due to the quality issues.

In the Erode market, stocks were of poor quality, mostly the carried-over from the last two years. Few bouts of strong interest though emerged supported by quality arrivals. As against 2,700 bags (each bag is 100 kg) arrived on Tuesday, only half of them found buyers. However, a day ago, as against 2,100 bags that arrived, 1,700 bags were sold.

In the Nizamabad market, some 2,000 bags of turmeric were sold against the arrival of 3,300 bags. Traders have procured little quantity as they are yet to receive fresh demand from north India. Still, only medium and poor quality turmeric is coming in for sale, making traders reluctant to stock it. They are only purchasing for local supply, said a trader from the district.

Turmeric prices traded on NCDEX for delivery on July 18 today jumped four per cent to close at Rs 6,464, while the August futures contract gained equally to close at Rs 6,598.

"Prices shot up on the arrival of quality hybrid turmeric," said RKV Ravishankar, president, Erode Turmeric Merchants Association.

However, prices are expected to remain subdued in the run-up to sowing season with the sole trigger being the monsoon.

"With good quality stocks not on the anvil, traders preferring them may stay away and enter the market in the future," said Biplab Sarma, head of turmeric research at online price monitor Agriwatch.

Rains in the initial sowing period ie, July-end to August would determine the long-term price of the commodity.

"If the initial 3-4 showers are prospective, a good quality crop can be guaranteed and thereby prices would remain in the expected range of Rs 5,700-6,600 per quintal," said Sarma.

He added farmers in the traditional growing belts of Tamil Nadu, Telangana and Andhra Pradesh would continue to sow it as it is exported and has better remunerative price.

In Telangana's Nizamabad district, the area under turmeric sowing in the 2013-14 season dropped 20 per cent to 53,000 hectares as against the previous season's 68,000 ha. This was mainly on account of lower price realisation for farmers in the subsequent years.

Meanwhile, market analysts are advising buying at lower levels with an immediate support below Rs 6,000 and resistance lying in the Rs 6,500-6,600 zone.