Turmeric recovers on reduced arrivals


Turmeric futures traded higher on fresh buying on Tuesday. Futures started the day on slightly lower note on extended selling.
However, prices resumed buying on corrections and traded higher. Reduced arrivals at spot market also supported the upside and futures ended the day on positive note.
Turmeric May futures are expected to continue the gains on follow through buying on Wednesday. Reduced arrivals pressure at spot markets across India might support the prices.
On other side, sluggish demand from stockiest might pull down the prices later in the day. Therefore, we expect prices to trade very volatile today.
Daily arrivals at spot markets of Erode and Nizamabad were 10,000 and 18,000 bags respectively (Each bag=70Kg.).
Due to prevailing lower prices at spot farmer are not brining much stock for auction in lieu of rise in prices amid reduced supply. Demand from other part of country has also slowed down which is also weighing on the prices.
As per trade sources, turmeric production in 2011 is estimated around 65 lakh bags against 45-48 lakh bags last year (Each bag=70Kg.).
According to derivative analysis, prices and volumes are rising while open interest is falling. Market has a lot of traders initiating from both sides but larger traders may be liquidating into the higher prices.
The market may be vulnerable to large price swings as shorter time frame traders attempt to trade from both sides of the market but liquidating before end of day.
Courtesy: Karvy Commtrade Ltd.

(Source: http://www.commodityonline.com/futures-trading/technical/Turmeric-recovers-on-reduced-arrivals-23411.html)


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