NCDEX Turmeric under short covering; Resistance seen at 6268
Commodity Online | January 20 2021
UPDATED 11:40:15 IST

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Technically Turmeric market is under short covering as market has witnessed drop in open interest by 2.85% to settled at 7830 while prices up 130 rupees.

Now NCDEX Turmeric is getting support at 6102 and below same could see a test of 6000 levels, and resistance is now likely to be seen at 6268, a move above could see prices testing 6332.

Turmeric yesterday settled up by 2.14% at 6206 amid expectation of decrease in Turmeric sown area in the kharif sowing season 2020 across Nizamabad and Marathwada regions.

However upside seen limited due to excess stocks which will be 50-60% of the excess in the current year as carry forward in the next year.

Covid-19 raised expectations regarding the consumption of turmeric as a body immune enhancer, but it did not last long. Poor quality of arrivals is another reason for the drop in demand.

Therefore, many traders in Erode started buying turmeric from the markets of Andhra Pradesh and Maharashtra as the prices were low there. Despite 2% freight, they are saving 5% on costs.

Apprehensions are there that water logging and higher moisture due to recent rains in October in major Turmeric growing regions of Telangana, Maharashtra, Karnataka is likely to have adverse impact on overall productivity of Turmeric.

Stockiest are getting active and started purchasing actively due to factors like decreasing sowing area and increasing demand.

On the export front, India exported around 0.86 lakh tonnes of Turmeric in April-August, 2020 which is 51% higher than April-August, 2019 at 0.57 lakh tonnes. In Nizamabad, a major spot market in AP, the price ended at 5845.25 Rupees gained 3.55 Rupees.

Trading Ideas:
--Turmeric trading range for the day is 6000-6332.
--Turmeric gained amid expectation of decrease in Turmeric sown area across Nizamabad and Marathwada regions.
--However upside seen limited due to excess stocks which will be 50-60% of the excess in the current year as carry forward in the next year.
--Stockiest are getting active and started purchasing actively due to factors like decreasing sowing area and increasing demand.
--In Nizamabad, a major spot market in AP, the price ended at 5845.25 Rupees gained 3.55 Rupees.

Courtesy: Kedia Commodities
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