NCDEX Turmeric Future price has traded bearish during the month of November so far and closed lower by 2.89% at Rs.5664/quintal on 23rd November, compared to Rs.5828/quintal as on 30th September. Weak demand in the festive season and steady arrivals in Nizamabad market led to pressure in Turmeric future prices.
Moreover, farmers have also been holding back their stocks due to prevailing partial lockdown situation in many states and lower prices. This has created a supply tightness situation in the domestic market to a certain extent and has also supported prices from extreme bearishness. Fundamentally for the month ahead, we are estimating NCDEX Turmeric futures to trade bearish, as the export demand from India is lower at the point of the year even though Indian rupee is trading at the lower levels (Rs.74-75) with respect to US Dollar. Moreover, possible another curfew and lockdown situation in southern states of India with rising covid-19 cases to weaken demand for turmeric.
Due to higher stocksin the spot market buyers reported inactive. As per Andhra Pradesh (AP) Govt., final Turmeric sowing was reported at 23,558 hectares as compared to 17,737 hectares in the corresponding period last year. Based on traders sources, turmeric sowing is completed in major growing regions in AP, Telangana, Tamil Nadu and Karnataka, standing crop is at good condition.
As per agro expert estimates for the year 2020-21, Turmeric (Dry) production in Andhra Pradesh is around 43,523 Metric tonnes (MT), similar compared was 45,534 MT of the year 2019-20 and in Maharashtra, production is expected to be around 62,809 MT, higher compared to was 52,341 MT (2019-20). In Karnataka, production likely to be around 38,010 MT, previous year’s production was 32,098 MT. Overall, we are estimating bearish trend in NCDEX Turmeric futures for the month ahead.
On the daily chart, NCDEX Turmeric (Dec) future has given trend line breakdown and also shifted below lower line of Bollinger Band formation, which indicates that bearish move to be continued further for near term. Moreover, price has also sustained below 100 days Exponential Moving Averages, which supports the bearish trend for medium term, Additionally, a momentum indicator RSI reading is at 35.10 levels and Stochastic Oscillator is showing negative crossover. So based on the above technical structure, one can initiate a short position in NCDEX Turmeric (Dec) future at CMP 5600 or a rise in the prices till 5630 can be used as a selling opportunity for the downside target of 5200. However, the bearish view can be negated if NCDEX Turmeric (Dec) moves above the resistance of 5800 level.
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