Prices of turmeric,the yellow spice that enjoys huge demand from the domestic and international markets for cooking and medicinal purpose, are all set to go northbound in the next couple of months because of a gap in demand and supply, after a brief lull of a few weeks.
Turmeric price is currently ruling at Rs 15,000 per quintal compared with Rs 13,500 in the year-ago period.
According to Natarajan, secretary of the Turmeric Merchants Association (Erode), the overall demand for turmeric across the country including the export market is estimated at about 45 lakh bags (a bag contains 75 kg). Nearly 15% of the production is exported. But, this year, even after taking into account the carryover stocks, the availability would be only 40 lakh bags.
?There is going to be a demand-supply gap and the effect will be seen towards the end of the year or early January. Prices might go up in coming months owing to the shortfall. The next season crop will determine whether the trend will continue till early next year. Erode alone accounts for nearly 35% of the overall production in the country. This year, production in Erode was at 12 lakh bags,? he said.
On one hand, there is a growing demand for Indian turmeric in the international market, especially from the West Asia. On the other hand, there is shortage of stock both for the domestic market and exports.
This situation ensures that prices remain at the present levels or would firm up further. There would be a fluctuation of atleast Rs 1,000 per quintal, said another trader. Traders feel that looking at the high prices, farmers might go for more cultivation of turmeric during the next season.
When prices were hovering around Rs 4,000-Rs 4,300 per quintal, it was not very beneficial for growers as the cost of production was high. This year, the production cost in Erode is estimated to be anywhere between Rs 3,000 and Rs 4,000 per acre, depending on the area of cultivation and the output.
