Yellow Spice Futures Settle Four Percent Lower .

NCDEX Turmeric extended the early losses with the futures tumbling nearly four percent on profit taking amid higher production estimation and weak export demand. Technically NCDEX turmeric futures were in the overbought zone and correction was expected in the contract.

It is expected that around 70 lakh bags would be the next year's production against a normal 45-50 lakh bags at national level as per trade sources. Right from second fortnight of December 2010, the stocks are expected into the market since farmers had this time sown turmeric in January, February itself due to water availability and in anticipation of better prices.

According to the latest updates from the spices board of India, spices exports from India during April - September 2010 gained by 8 percent to 2,73,600 tonnes and earnings spurted by 16 percent to Rs. 309,535.35 lakh against the same period last year. Turmeric exports tumbled 15 percent to 25,750 tonnes while earnings improved by 83%to Rs. 36,097.05 lakh.

Demand from the local stockiest and overseas buyers is expected to improve ahead of winter season. Turmeric stocks with the stockiest are projected lower at 12 lakh bags (each bag weighs70-75 kgs.).

After runaway rally in the NCDEX turmeric prices in the previous consecutive sessions, futures touched the four percent lower circuit in today's trading sessions. The benchmark December contract on NCDEX ended the day lower by four percent or Rs. 536 at Rs. 13456 per 100 kg. The open interest dipped 11.27 percent to 4170 tonnes and volume traded surged to 7,445 tonnes.

Near month November contract on NCDEX ended the day lower by Rs. 548 or four percent at Rs. 13370 per 100 kg and the open interest dipped 52.08 percent and volume traded surged to 4,230 tonnes from 805 tonnes.

Source : indiainfoline.com