July contract expiry to set turmeric prices

Farmers in many states, who have stored up to 22-24 lakh bags (70 kg each) of turmeric in warehouses, are eagerly waiting for the deliveries on the National Commodity & Derivatives Exchange (NCDEX) fixed for July-end following the expiry of the July contract.

If the delivery passes off well, farmers hope that prices in the physical market would look up by August 15, when northern Indian traders would actively purchase the crop.

They see prices going go up by Rs 300-400 a quintal. Traders peg the turmeric at the NCDEX warehouses to be around 3,000 tonnes. Following the strong delivery, trading would take off to a flying start against the backdrop of an insipid domestic market and a colourless export market.

However, commodity market experts place the turmeric at the exchange's warehouses at 9,090 tonnes, of which 1,283 tonnes are expected to be delivered after the expire of the July contract. About 4,506 tonnes are lying at the NCDEX's warehouse in Nizamabad, 3,794 tonnes in Warangal, 770 tonnes in Erode and 20 tonnes in Duggirala.

Analysts expect the market to witness a selling pressure in the entire week. In Duggirala, farmers have stored up to 2.70 lakh bags, their counterparts have stocked 3 lakh bags in Nizamabad, 1.5 lakh bags in Warangal and 75,000 bags in Kadapa. About 20,000 bags of the crop is expected to hit the Duggirala marketyard in the coming months.

Similarly, 9 lakh turmeric bags, the largest number, are lying in warehouses in Erode. Farmers have stored about 3 lakh bags in Maharashtra and 1.5 lakh bags in Orissa.

Exporters and traders said that the turmeric harvest would go down by 25-30 per cent in 2008. Farmers are likely to harvest 40 lakh bags compared with 55 lakh bags of the crop harvested last year. About 10 lakh bags will be carried over from the last year.

Sowing is almost complete in Andhra Pradesh. A number of farmers have moved away from turmeric cultivation and those who have sown have reduced the acerage. Traders said reports suggest that the trend could be seen all over the country.

Turmeric is selling the highest at Rs 3,200 a quintal in Rajapur (Maharashtra). The crop fetches Rs 3,000 a quintal in Salem. In Andhra Pradesh, the highest price of Rs 1,950-2,000 a quintal is ruling in Tekuripet, followed Rs 1,875-1,925 a quintal in Kadapa and Rs 1,825-1,850 a quintal in Duggirala, Nizamabad and Warangal.