Heavy rains in the states of Tamil Nadu and Andhra Pradesh are causing concerns on the state of the standing turmeric crop. Unabated rains in the coming days could lead to substantial damage of the crop in most of the farms due to flooding. The turmeric market is already battling reports that the new crop would be lower than last year in both Tamil Nadu and Andhra Pradesh. 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.
N Raveendran, former national consultant, National Agricultural Innovation Project (NAIP), said that continuous rains could damage the standing crop as it would deter the growth of turmeric fingers.”Rains in Andhra Pradesh are not good for the crop and yield may suffer. Erode region in Tamil Nadu can stand good rains as the drainage is better. But if the rains continue it will damage the quality of the crop and the market will move up further. Already the market is firm on anticipation of a lower crop,” he added.
“Conversely, there are reports that Erode is likely to compensate for the projection of declines in production in other areas due to recent heavy rains and good irrigation facilities in the district. The current spell of rain is likely to improve the yield and quality of standing crops. Turmeric output in Tamil Nadu is expected at around 1.2-1.4 million bags, compared with 0.6 million bags last year, “ Vishida Vijayakumar of Geofin Comtrade told FE.
Ritesh Kumar Sahu, an analyst at Angel Commodity Broking feels that the quality of the standing crop would be affected due to the continuous rains. “Traders are buying good quality turmeric at higher rates from the farmers anticipating that the next lot would be poorer in quality. Traders are holding to the stock ,” he added.
Spot prices of turmeric on Monday evening at the NCDEX counter recorded Rs 9,823.8 per quintal.
“Turmeric prices are trading higher due to good demand for the spice in spot markets following likely delay in new crop arrivals. The concerns that lower acreage and dry conditions in Telangana and Maharashtra may affect turmeric production this year, too support the price uptrend ,” Vishidha said.
Kotak Commodities quarterly report says that total supply of turmeric for the season is estimated to decline by 21% due to sharp decline in production and higher exports. The report adds that stock to usage ratio for the year 2015 is forecasted at 26%, lowest in last 5 years.