With a month left for the harvest, turmeric prices have started scorching the market on bullish speculation.. The turmeric prices were jumped by 15-20% in the Indian market in a span of just 20 days, trade sources said.
Currently the average price of the commodity surged to Rs 2,600-Rs 2,700 per quintal from Rs 2,150-Rs 2,300 three weeks ago during Deepavali festival season, according to figures available in Erode, the largest turmeric market in the country. According to the commodity research firm Motilal Oswal, decline in acreage and lower carry over stocks due to increase in exports were two major reasons that led the stockists to buy from spot and future market sensing the good run up in the prices.
In Erode belt, which contributes around 35-40% of the total turmeric production in the country, the turmeric acreage has declined by around 20% this year as the farmers have shifted to other cash crops following lower prices for turmeric during the last two years, said RK Viswanathan, ex-secretary of Erode Turmeric Merchant Association. In fact the commodity was sold at around Rs 2,000 during May-June, Viswanathan added.
He said the harvesting season in January is expected to start with a carry over stock of 13-14 lakh bags (75-kg bag) while the production would touch 44-45 lakh bags, taking the total availability to 58-59 lakh bags in 2008 season. Although the carry over stock of 9-10 lakh bags expected during the next harvest in 2009, the strong buying and holding power of stockists would keep the prices at around Rs 2,500 level, he said.
Motilal Oswal report said that the turmeric exports increased by 59% to 51,500 tonne in 2006-07 from 32, 402 tonne in 2002-03. The export has increased on the back of higher demand at international market primarily in the UAE and Iran.