High exports to keep turmeric prices firm

By: | Published: August 7, 2015 12:11 AM

Turmeric exports in FY15 were at 86,000 tonne and worth Rs 744 cr compared to 77,500 tonne and Rs 666 cr in FY14

Turmeric prices are likely to stay firm due to low inventory and robust export demand.

Traders also expect the domestic demand to gain pace in the coming days due to festival consumption. Sowing of the commodity is seen marginally higher on a year-on-year basis but lower from the historical average.

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. Kotak Commodities quarterly report says that total supply of turmeric for the season is estimated to decline by 21% due to sharp decline in production and higher exports.

The report adds that stock to usage ratio for the year 2015 is likely to be at 26%, lowest in last 5 years. Kotak estimates the turmeric market to stay bullish on robust demand and low inventory in pipeline.

“Domestic demand is seen good ahead of festivals and export demand is expected to remain strong till September,” Kotak sources added.

According to Angel Commodities report, the turmeric fundamentals look bleak and the prices may surge to more than Rs 8,000 per quintal in medium to long term. Spot prices of turmeric on Thursday evening at the NCDEX counter was recorded at Rs 7283.65 per quintal.

“During this lean period, the price movement will mainly depend on the sowing progress and weather in the sowing areas. The regular seasonal and industrial demand will support the price on reports of lower stocks in domestic market, but the export may be lower on quality concern. Meanwhile, deficient rains in turmeric growing areas have not only slowed down pace of sowing, but may affect the quality and yield, resulting in a shortage of quality turmeric,” Angel report said.

“Turmeric futures are trading lower on reports of sluggish demand amid higher arrivals and ample carryover stocks. However, prospects of rise in demand from domestic and overseas market may limit sharp fall in prices” said Vishida Vijayakumar, research analyst at Geofin Comtrade.

As per the data provided by state-run Spice board turmeric exports for 2014-15 was 86,000 tonnes worth Rs 744.35 crore compared to 77,500 tonnes and Rs 666.75 crore in FY14.

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