Turmeric futures in NCDEX dropped as festive demand was not picking up at the expected pace in the spot market, ended marginally down on profit booking due to weakness in the species complex and moderate demand in physical market. Exporters were sidelined in the spot market, but may resume buying by end of the month as demand usually increases in winter season
Indian turmeric carry-over stocks for 2009 are likely to stand at 500,000 bags, 58 percent lower from last year's 1.2 million bags due to lower output in 2007/08, India, the world's biggest producer, annually consumes an estimated 4.3 to 4.5 million bags, while it exports about 500,000 bags each year. This year (in 2008/09) acreage is almost steady and we are expecting output to stand at 4.1 million bags.
Traders estimate reduced acreage and unseasonal rains in March cut output in 2007/08 to 4.1 million bags of 70 kg each from 5.4 million bags a year ago.
̀Influencing Factors:
Profit booking
Moderate domestic demand
A likely rise in the production in 2008/09
Sufficient rain fall in major growing regions
Turmeric arrivals in Nizamabad spot market dropped
Decreasing exchange stocks
Weaker rupee may promote exports
Turmeric arrivals in Nizamabad spot market dropped by 16.8 percent to 50,317 tonnes in first eight months of 2008
A traders estimate turmeric output in 2008 to fall to 4.2 million bags of 70 kg each from 5.4 million bags a year ago
Turmeric cultivation starts with the arrival of monsoon rains in June in southern and western states, the major producers.
Technical Outlook
Technically Turmeric October Closed below 9 day EMA and 21 day EMA
Today’s Recommendation
NCDEX Turmeric Oct buy above 3830 stop loss below 3790 Targets 3854,3888,3914
Courtesy: JRG Wealth Management
