Turmeric market is seen steady on supply concerns and likely to rally as seasonal demand picks up from February. Acreage is seen lower in two states and lower carryover stock is expected to support the upward move.
India is the largest turmeric producer with 75-80% of the global production and demand for the commodity has been increasing rapidly from the drug and cosmetic industry.
“Demand is sluggish and supply is low as farmers are holding back. Seasonal demand is expected to rise from February. Dry supply pipeline in north Indian markets may also encourage buying at lower levels. The market is very bullish about the commodity due to lower acreage and unfavourable weather,” Sudha Acharya of Kotak Commodity Services said.
Turmeric spot prices on the NCDEX counter on Monday evening stood at R8,602.95 per quintal. Turmeric prices touched a record high of R16,350 per quintal in November 2010 and touched a low of R3,360 per quintal in 2012. Very high returns from turmeric prompted farmers to switch from cotton, tapioca and soybeans in many places.
Angel Commodities reports that this year during the peak-sowing period, moisture stress was observed in Telangana, Karnataka and Maharashtra as the intensity of monsoon rain decreased during July and August. The quarterly report on turmeric by Angel also adds that acreage slipped lower in Nizamabad, Kadappa in Andhra Pradesh, Karnataka and Sangli in Maharashtra. However, in Tamil Nadu, due to better irrigation facilities and sufficient rains, acreage increased by about 10-12 %.
“Country’s supply scenario for 2015-16 turmeric may continue to remain bleak for the third consecutive season. Expectation of sharp fall in beginning stocks by 56% amid marginal gain in production by 6% may reduce the total supply by 24% to 9.3 lakh tonne,” Sudha said.