Turmeric market is likely to firm up in the coming months on short supply and robust demand. Lower carryover stocks and concerns about the new crop are estimated to lead to a tight situation.
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 been supported by demand from North India and concerns over crop loss due to cyclone ‘Hudhud’ that hit Andhra Pradesh in October. Report says acreage of turmeric from the major producer Andhra Pradesh will be on the downside. The area under new crops is still a major concern in states like Tamil Nadu and few areas in Karnataka due to delayed monsoon and poor price realisation,” Hareesh V, research head of Kochi-based Geofin Comtrade told FE.
Tamil Nadu Agricultural University (TNAU) reports that the crop would be lower and prices firm after February. 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 demand.
“Supply and demand balance sheet is tight with stocks to usage ratio at all-time low of 15% keeping the outlook bullish for the season with high probability of prices to test previous high,” sources at Kotak Commodity Services said. “Low coverage of area in Tamil Nadu and Karnataka year-on-year by around 6% and 10% respectively has resulted in fall in total acreage. Meanwhile, area covered in Andhra Pradesh (including Telangana), has gone up by 9% in comparison with last year. Though year-on-year the area covered is higher as compared to normal season the acreage is down by around 18-20%. Improved sowing in Andhra Pradesh has lowered significant fall in total area,” Kotak sources added.
Andhra Pradesh is the major turmeric producing state contributing 30% of the total area under the spice in the country, followed by Tamil Nadu and Karnataka.