Decline in turmeric prices leads to higher exports

A sharp decline in turmeric prices has helped in higher exports of the commodity. Turmeric exports during the first ten months of the last fiscal are seen higher by 134% in volume and 129% in value when compared with the same period of FY11. Exports for the complete fiscal are likely to be more than 80,000 tonne given the fact that turmeric prices have declined sharply.

On the demand side, consumption of the commodity has been increasing robustly due to increasing usage in medical and cosmetic industry. India leads in turmeric production with 78 % of the global production, while other major producers are China (8%), Myanmar (4%), Nigeria (3%) and Bangladesh (3%).

?Exports would touch a new high given that the price of the commodity has declined by 75%. Now, the commodity is sold around R33-34 per kg in the Erode market compared to R167-170 during the same time of last year,? RK Viswanathan of Erode Turmeric Merchants Association said.

The commodity cycle has come full circle for turmeric. The price is estimated to touch the bottom by May. Arrival of the new turmeric crop normally starts from mid-January. Trickles gain momentum from March and continue through June.

According to Tamil Nadu Agricultural University (TNAU) data, during April 2009 turmeric was selling around R5, 200 per quintal. In April 2010, it increased to R12, 500 and during December 2010 it was trading in the range of R16,500-17,000.

The production is estimated around 82 lakh bags by Nalini Rao of Angel Commodities. She says it quite high when compared with the previous production of 69 lakh bags.

United Arab Emirates is the largest market for Indian turmeric. It is followed by Iran, Malaysia, Japan and US. Interestingly, India imports turmeric from other origins for its processing industry. India mostly imports turmeric from Indonesia and Vietnam. ?Curcumin content of turmeric is an important factor in the price of the commodity and trade. Indian turmeric has the highest curcumin content and is preferred by the extractors and grinders,? P Nandakumar, a trade consultant said. Indian processors imports almost 4,000 tonne per annum from Vietnam and Indonesia depending up on the price differential, he added.