Dealing room check: Outlook bullish for turmeric

Turmeric futures prices at NCDEX registered sharp gains during the week ended July 7. Prices were trading lower till mid-week as traders booked profits at higher levels. But, in the later part of the week, the market turned bullish. Decline in supplies at the spot market amid good export demand and expectations of sharp decline in sowing area in the major turmeric growing States supported the positive sentiment. The active month turmeric futures contract reached its four-month high of ₹6,874 per quintal before closing the week at ₹6,860/quintal, up by 7.56 per cent for the week.

At the Erode market, prices gained ₹100-200 over the previous week to ₹7,300/quintal and ₹6,700/quintal for finger and bulb variety, respectively, amid decreased supplies while at Nizamabad, prices closed at ₹6,590/quintal and ₹6,203/quintal for the two varieties.

Sowing activity in Telangana, top grower of turmeric, has improved post gain in prices. As on July 3, the area under turmeric was 0.18 lakh hectares, lower by 0.04 lakh hectares over last year. Monsoon in major turmeric growing States is mixed till date: Telangana (+23 per cent), Andhra Pradesh (+22 per cent), Maharashtra (+7 per cent) is above normal while in deficit in Kerala (-17 per cent), Tamil Nadu (-6 per cent) and Karnataka (-11 per cent).

Outlook

For the week ahead, turmeric futures are expected to extend gains tracking bullish sentiment in the market. Initially, prices are expected to register some loss on account of correction from higher levels. However, the fall is expected to be limited and prices are expected to recover to trade higher for most part of the week.

The writer is Head-Commodity Research, Karvy Comtrade

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