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Turmeric Update

posted Mar 4, 2011, 7:23 AM by NAVYUG Info
Prices crashed for Turmeric since the beginning of the year till mid-Feb as traders waited for arrivals of the new crop for initiating fresh demand. Demand started picking up at lower levels once the arrivals started and that supported the falling market rates for the commodity towards the later part of the month. 

With arrival of the new crop, demand has also risen. Export demand from Dubai has been there. The export demand from other countries is likely to pick up in coming weeks. Reports of arrivals in the mandis getting adversely affected due to some disturbance in certain regions in Andhra Pradesh too had a bullish impact on the prices. 

The crop output is however expected to be far better than the previous year aided by good rains in the growing areas of AP and Karnataka. Reports of farmers switching to this crop due to the high returns they got last year too resulted in increased sowing area for the crop. 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). Latest reports from Spice Board of India indicates the expected Turmeric exports for the period April-January have fallen by 13% to 38,000 MT in 2010-11 from 43,825 MT in 2009-10 same period. 

The arrivals expected to rise in coming weeks could pressurize prices to some extent but traders believe export demand would determine the trend for the commodity. Low stock levels could support the rates further. Thus some firmness could be noted for the commodity amidst high volatility depending on the reports on the production and export front.