Futures have appreciated by more than 10 percent over the last month. As the unlocking of the economy started, household consumption picked up and similar trends were seen in the healthcare industry as well as exports. So, it can be inferred that local as well as overseas demand for turmeric has started improving.
The agriculture ministry’s efforts and increasing awareness about spices being an immunity builder, especially turmeric, has led to an increase in the consumption of the spice in the last few months.
Out of the estimated production of 9,38,955 tonnes in 2019-20, annual exports till December 2019 stood at 1,01,500 tonnes, trade sources said.
India is the world's largest supplier of turmeric, contributing nearly 70-75 percent to global production. As the perception of turmeric being an immunity booster gains ground, domestic and export demand, too, has started picking up.
Since April, retail chains in the UK, Germany and Holland have seen an uptick in the purchase of Indian turmeric, exporters say. In fact, the entire spices basket has fetched good returns for the country in June.
Sowing prospects reduced as markets moved in a moderate price band of Rs 500-7,000 per quintal since last three years. There are reports of farmers likely to shift some of the turmeric cultivated areas to soybean, maize, cotton, etc. Therefore sowing prospects are lower for the coming season, indicating a drop in production outlook.
All in all, growing demand prospects—export as well as domestic—ongoing festival season, cheaper prices and lower sowing possibilities should keep price outlook positive for the coming month. Most of the inventory is with farmers and they are willing to sell only after noticeable price appreciation.
Turmeric October contract has strong support at Rs 5,700-5,750 per quintal.
Immediate resistance is at Rs 6,120 per quintal, above which prices may touch Rs 6,300 per quintal and Rs 7,000 per quintal mark over the next 20 days.
(The author is VP - Retail Research at Religare Broking Ltd.)Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.