Turmeric prices are likely to move up in some days due to lower production and robust demand. The market has been trading weak for some days due to good arrivals and sluggish demand at the current price level. India is the largest turmeric producer with 75-80% of the global production and demand for the commodity has been increasing rapidly from the medicinal and cosmetic industry.
“Prices have come down sharply in the last one week due to resistance at the current level and inferior quality of the commodity offered. The market may ease a bit more, but would stabilise at R73-74 per kg range due to fundamentals. The production is lower year-on-year and overall demand is good,” Sudha Acharya of Kotak Commodities told FE. Spot price at the NCDEX counter on Thursday evening stood at R7,845.8 per quintal. “Yield and quality of the new crop is lower than estimated earlier. The market will get support,” she added. Angel Commodities reports that turmeric futures may trade on a mixed-to-positive note on good local demand for the good quality turmeric, but profit bookings on higher levels may restrict the gains. There is an expectation of good demand from up-country buyers as supplies of the good quality turmeric is seen lower. There is news of crop damage from Karnataka and Andhra Pradesh, Angel reports.
“Arrivals in the Erode market are very low compared to the past. Production is lower in Tamil Nadu by 40% and the market will move up in few days,” RK Viswanathan of Erode Turmeric Merchants Association said.
N Raveendran, national consultant, National Agricultural Innovation Project (NAIP), said that the new crop and the old stocks would not be able to cover the total demand.
Kotak reports that area under turmeric farming has witnessed a declining trend after the peak in 2010-11. In the span of 5 years, acreage under the spice has declined by 27% from the peak of 2.3 lakh ha in 2010-11.Turmeric acreage for 2014-15 is forecasted at 1.69 lakh ha year-on-year, down by 4% from 1.76 lakh ha in 2013-14. Turmeric exports in April-September of FY15 stood at 43,000 tonne, higher by 10% from a year earlier. In FY14, exports stood at 77,500 tonne, lower by 12% from a year earlier. Value realised from exports stood higher by 20% at R666.75 crore.