The NCDEX turmeric extended the bearish trend for 4th consecutive week. Prices at futures started the week on slightly positive note on short covering on previous losses.
However, later on futures turned bearish due to lack of any fresh cues from spot market. Spot market remained close till Thursday as farmers’ boycotted auction due to prevailing lower prices. They asked Government to procure their produce at Rs. 10,000 per quintal.
Friday spot market opened but farmers brought very less quantity. Therefore, reacting to prevailing fundamentals futures also ended the week on negative note.
Outlook
Turmeric prices are expected to open on lower note on extended correction in coming week. However, short covering at huge losses can be seen initially in the week.
Farmers are expecting prices might recover in coming week on fresh buying. Traders are also waiting for fresh orders from north Indian buyers as sample has been sent to them.
Therefore, if good demand comes from north India then it might push the prices on higher side.
Factors to watch out
As per trade sources, arrivals at spot market of Erode were hovered in the range of 6300-8200 bags (1bag=70Kg.)
According to trade sources, Harvesting has been started in Erode and after drying and processing arrivals will start by 2nd - 3rd week of February
As per data released by Spices board, during Apr-Nov, 2011 Turmeric export from India were reported up by 63% to 58,000 tonnes against the same period last year
As per Spices Board data, international price of Turmeric in New York market remained unchanged to $5.62 per kg during the week ended January 20th 2011 lower from $5.29 per kg quoted in the same period last year
Derivative Analysis
The NCDEX Turmeric April contract prices, volumes and open interest have declined. It is a good indication that the price decline is being caused by disgruntled long position holders being forced to liquidate their positions.
Technicians view this scenario as a strong position technically because the downtrend will end as all the sellers have sold their positions, creating fresh buying opportunity at lower levels.
Courtesy: Karvy Commtrade Ltd.
