Bullish trend may not last long, feel experts

Though the turmeric market saw an uptrend last week following announcement made by the Andhra Pradesh State Cooperative Marketing Federation (AP Markfed) to procure the commodity, experts believe the bullish trend is a temporary phase.

They said once the phase was over (within a week), prices might fall by more than 10-12 per cent in the spot market owing to surplus production (56 lakh bags, each bag of 70 kg).

"Rates have to go down. Bullish trend is now almost about to recede. After Ram Navmi, demand is expected to go down and prices will head southwards," said Milan Shah, a Sangli-based trader. Normally, turmeric market sees firmness and good demand between March 10 and March 25, he said.

"At present the rates are around Rs 2,200 a quintal. By the first week of April, it will start going down. We see it reaching Rs 1750-1800 a quintal," Shah added.

Traders and commodity analysts feel unless AP Markfed makes the picture clearer as to how much and at what rate it would procure turmeric, any further firmness is ruled out. "The question is how much will AP Markfed buy and to what extent it can go forward?" asked Shah.

He added prices were going down and it could not be held at such levels for long.

With more supply centres at Warangal, Kadapa, Nanded and Duggirala coming up in addition to the existing centres at Sangli, Nizamabad and Erode, turmeric will see weakness, sources said. According to them, stockists are shying away from turmeric as they failed to recover cost last season.

On the National Commodity and Derivatives Exchange (NCDEX), near month delivery contract of turmeric closed at Rs 2,260 a quintal as against last week's close of Rs 2,176 a quintal, up 3.86 per cent. Sources attributed the jump to speculative buying.