Low export, competition hit turmeric price

Our Commodities Bureau in Chennai

Stiff competition from China, leading to a drastic slip in export demand coupled with a mounting stock position has hit the turmeric prices badly in the domestic market. Turmeric prices have nosedived to Rs 14.50-15.50 per kg level in August compared to Rs 25 per kg prevailed in the same period in the previous year.

Industry sources told The Financial Express that the turmeric prices, which was recovering from Rs 14 per kg during the beginning of the season to Rs 20 per kg May 2001, have crashed to a record low of Rs 14.50-Rs 15.50 per kg level in August. Sources attributed the crashing of prices to the piling up of stock position and lack of demand in the domestic market.

Currently, the stock position in the market is around 32 lakh bags (a bag is 75 kgs) as against the offtake of 12 lakh bags leaving a surplus of 20 lakh bags. The surplus is sufficient to meet the demand till the next season. Turmeric season starts in January.

A major reason that pushed down the prices was drastic fall in exports during April-June 2001. The country exported 10,500 tonnes of turmeric during the period compared to 12,308 tonnes in the same period in the previous year. This is basically due to stiff competition from China both in terms of quality and pricing in the international market.

Market sources also feel that the price situation is likely to worsen in the coming months, as the surplus stock would hit the demand for the commodity furtherdown.

They also feel that, if the trend prevails there is a possibility of farmers shifting to other cash crops, which offer better prices in the ensuing season.

Turmeric is mainly cultivated in Tamil Nadu, Andhra Pradesh, Madhya Pradesh and Orissa. Tamil Nadu and Andhra Pradesh account for a major portion of the production.