India is the largest turmeric producer with 75-80% share of the global production and the demand for the commodity has been increasing rapidly from the medicinal and cosmetic industry.
Higher production of turmeric is likely to put pressure on the commodity price in the current season, traders said. Fresh arrivals to the market is estimated to put pressure on the prices which are already seeing lower margin than before. India is the largest turmeric producer with 75-80% share of the global production and the demand for the commodity has been increasing rapidly from the medicinal and cosmetic industry.
Commodity report by broking firm Angel highlighted production was forecast at 11.5 lakh tonne in the first advance estimates by the government, which is little higher than last year’s production. Prices have dipped more than 6.5% in 2019 on subdued export demand and good production prospects.
Turmeric spot prices in the NCDEX counter on Tuesday evening closed lower at `6,434 per quintal. Turmeric prices touched a record high of `16,350/quintal in November 2010 and touched a low of `3,360/quintal in 2012.
Extreme high returns from turmeric prompted farmers to switch from cotton, tapioca and soyabeans in many places.
M Sathyamoorthy, secretary of the Erode Turmeric Merchants Association, told FE the market was likely to come under pressure as new arrivals come into the market.
“The crop is good in most parts of the country except Maharashtra. Drought in some parts of Maharashtra will impact production. Earlier, it was reported that the new crop will be higher by 20 %, but my assumptions that it would be more or less similar to last year’s production and trade in `6,000-8,000/quintal,” he added.
Angel reports that turmeric futures are expected to trade sideways on new season arrivals and good production prospects due to concentration of more turmeric areas in Tamil Nadu, Karnataka and Maharashtra. However, expectation of demand may support prices.
“As per data released by the commerce ministry, turmeric exports during November 2018 is up 13% on year-on-year basis to 9,722 tonne as against 8,594 tonne.
Turmeric exports in 2018-19 (April- November ) is up 13.25% at 85,756 tonne compared to 75,723 last year for the same period,” Angel sources said.
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 extractors and grinders.
Experts from the Tamil Nadu Agricultural University said non-traditional areas like Northeast have also started to farm turmeric in the past few years due to robust returns and this may upset the fundamentals of the current trade.