Turmeric Likely to Gain On Lower Stocks.

Turmeric rates stabilized at the lower levels as traders waited for demand to pick up in the mandis after the fall seen the last few days. Traders are reportedly waiting for new crop arrivals to initiate fresh demand. Clearer skies in growing areas in AP and Karnataka pressurized the market sentiments. Lower stocks and reports of delayed arrivals from unseasonal rains in growing areas are likely to support rates in medium term. Prospects of improved export and domestic demand in coming weeks are there. Apprehensions of damage to sown crops have also been there. Lower stocks and weak arrivals in the mandis too could support the prices. Some export queries from mid east Asian countries have been noted.

Moderate domestic demand too has been there. Overall better crop prospects this year however are expected to cool down rates to some extent. Stockists reportedly held back stocks in anticipation of a rising demand. Short term trend would remain volatile as traders wait for corrections for buying opportunities. Good rains in the growing areas of AP and Karnataka raised possibilities of a better crop this year. With sowing area in these 2 states expected to rise it can pressurize the prices to some extent.

Traders expect production to range between 65-70 lakh bags vs ~48 lakh bags last year (1 bag = 70 75 kg). Reports of low carry forward stocks are likely to support the prices in the medium term. There are expectations of farmers switching to this crop this year as the returns last year had been good. This is expected to improve the crop production aspects. Latest reports from Spice Board of India indicates the expected Turmeric exports for the period April Nov have fallen by 11% to 33 000 MT in 2010 from 37 250 MT in 2009 same period.

Source : indiainfoline.com