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Turmeric

NCDEX Turmeric Future price initially traded higher during the August month due to sluggish sowing progress, but then later in the second half of August and first week of September prices fell with monsoon recoveries closing at Rs.7606/quintal on 6th September, higher by 3.20% compared to Rs.7370/quintal as on 30th July. Steady buying in the domestic market amid high medicinal value including the proven anti-inflammatory qualities kept the prices sustained in the higher zone in the past couple of weeks.

Fundamentally for the month ahead, we are estimating NCDEX Turmeric futures to trade bearish, with the reports of good monsoon in the southern peninsula. As per IMD reports, the south west monsoon is expected to remain favourable in Tamil Nadu, Karnataka, Andhra Pradesh and Telangana. This is expected to improve the yield scenario in the said states. The domestic APMC markets have reopened and supplies/arrivals are slowly rising with vaccination process picking up pace. The demand on the other hand has similar with reports of higher exports of turmeric that continue to rise on a monthly basis. The state of Telangana and Andhra Pradesh have nearly completed sowing and with favourable weather along with higher prices is expected to increase acreage in the said states by 10-12% compared to the previous year. Sowing in Karnataka and Orissa is likely to be similar compared to the previous year with Assam likely to increase sowing by 5-10% due to higher demand for premium quality turmeric spice in the domestic and international market. In the case of Maharashtra, sowing has shown recoveries and traders have forecasted bumper yellow spice crop during the year 2021-22 as compared to 2020-21.

On thedaily chart, NCDEX Turmeric (Oct) future has been trading in a Sideways Trend for the last fewweeks. The price has reversed from the prior supply zone and settled below the Middle Band of Bollinger formation, which is supportive of the bearish momentum. In addition, the indicator MACD also indicates the short position with negative crossover. However, on a four hourly chart, an oscillator Stochastic RSI suggested positive crossover, which indicates slightly recovery in the counter. Hence, based on above technical structure, we are recommending sell on rise strategy in NCDEX Turmeric (Oct) future , so one can initiate a short position in NCDEX Turmeric (Oct) future around 8340 or arise in the price till 8450 levels can be used as selling opportunity for the downside target of 7420. However, the bearish view will be negated if NCDEX Turmeric (Oct) future close above the resistance level of 8900.

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