Good rains in the turmeric producing areas, especially the traditional area of Erode, are likely to boost the production of the commodity this season. India is the largest turmeric producer with 75-80% of the global production and demand for the commodity has been increasing rapidly from the medicinal and cosmetic industry.
M Sathyamoorthy, secretary of the Erode Turmeric Merchants Association, told FE that Erode and the nearby regions have received adequate precipitation after five years of drought and the canals have water.
“Erode is the traditional area for turmeric, but for the past several years we have been overtaken by new regions like Maharashtra and Telangana.This season we will farm more area and hopefully the production would be double compared to last year.It is also reported that most of the turmeric growing regions in south and central India have sown more in this season,” he added.
Turmeric spot prices at the NCDEX counter closed higher at Rs 7,420 per quintal on Tuesday evening. The prices have touched a record high of Rs 16,350 per quintal in November 2010 and touched a low of `3,360 per quintal in 2012. Very high returns from turmeric prompted farmers to switch from cotton, tapioca and soybeans at many places. Broking firm Angel Commodities reports that the market is trading under pressure on the expectation of higher acreage of turmeric in Andhra Pradesh and Maharashtra following good rains this season.
Angel also adds that the export of turmeric was down by 5% at 10,651 tonne in May 2018 compared to last year’s exports. For the first five months, the exports are lower by 13.4 % compared to last year. Indian turmeric has the highest curcumin content and is preferred by the extractors and grinders. Curcumin content of turmeric is an important factor in the price of the commodity and trade.
Sathyamoorthy added that stocks in the Erode market are less by a third when compared to the past years.
Lower arrival of turmeric in the market and higher export demand may support the market .Turmeric futures are expected to trade sideways to higher on expectation of increase in physical demand during the sowing season.