Turmeric prices in Andhra Pradesh and Telangana have come under pressure over reports suggesting that there would be an abundant production of the crop. A declining trend was seen in the spot and futures market with reports coming in from the farms that the cyclonic rains have not damaged the standing crop.
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.
Broking house Angel Commodities reports turmeric market to trade sideways to down as new season turmeric comes to the physical market.
“Expectations of increasing production in coming harvesting season and lowering export demand in recent months are putting pressure on turmeric prices at higher levels. Turmeric acreage in Telangana and Andhra Pradesh was higher this year as compared last year,” the report said, adding that up-country demand for the new season crop may support prices.
Turmeric spot prices in the NCDEX counter on Thursday evening closed lower at R7,664.7 per quintal. Turmeric prices touched a record high of R16,350 per quintal in November 2010 and touched a low of R3,360 per quintal in 2012. Very high returns from turmeric prompted farmers to switch from cotton, tapioca and soybeans in many places.
However, N Raveendran, former National Consultant, National Agricultural Innovation Project (NAIP) remains convinced that the market will remain firm on lower production.
“Lower moisture in the soil in Tamil Nadu is likely to reduce the yield, while heavy rains in Telangana and Andhra would damage the crop there,” he said. He expects the market to remain firm till March and rally higher on the demand.
Domestic and Export Market Intelligence Cell of the Tamil Nadu Agricultural University forecasts the turmeric market to remain firm on harvest. The report says that the floods in Telangana and Andhra Pradesh are expected to reduce the production of fresh turmeric in the current season.
“The standing crop in Karnataka and Tamil Nadu are reported to be damaged due to long dry spell. The carryover stocks of turmeric from 2016 are expected to be around 7-10 lakh bags (one bag equals 75 kg). Currently, the arrivals have started coming from Bhavani, Sathyamangalam and Mysore.