Prices of turmeric likely to drop on expanded sowing

By: | Published: August 18, 2016 6:02 AM

The turmeric market is likely to come under pressure as reports of sowing in major producing states indicate higher production for the season.

The turmeric market is likely to come under pressure as reports of sowing in major producing states indicate higher production for the season. Lower stocks and good export demand may support the market till fresh crops arrive in the market. India is the largest turmeric producer with 75-80% of global production; demand for the commodity has been increasing rapidly from the medicinal and cosmetic industry.

Vishidha Vijayakumar, analyst at Geofin Comtrade, estimates turmeric prices to trade lower on latest reports of acreage under the spice being higher.

“In Andhra Pradesh, as of August 10, acreage is seen at 10,522 hectares from 8,657 hectares reported last year, and in Telangana it increased to 43,315 hectares from 37,780 hectares a year ago. In Maharashtra, acreage has increased because of good rains after a drought-like situation for two consecutive years. India’s turmeric acreage in 2016-17 is likely to increase by 25-30% from the previous year,” she said.

“The weather across turmeric-growing regions received good rainfall and the sowing progress is seen higher than the last two-year data. The movement of prices will depend on the weather and export demand. If the weather holds good during the next two months, then it will pressurise turmeric prices, which may go down to Rs 7,800 per quintal levels,” sources at Angel Commodities said.

Turmeric spot prices in the NCDEX counter on Wednesday evening closed lower at Rs 8,118.05 per quintal. Turmeric prices touched a record high of Rs 16,350 per quintal in November 2010 and touched a low of Rs 3,360 per quintal in 2012. Very high returns from turmeric prompted farmers to switch from cotton, tapioca and soybeans in many places.

Angel Commodities reports that currently the stocks are diminishing at fast pace as carryover stocks are at a lower level and this may support the market for some period. The fresh crop starts arriving in the market only after December and the demand from exports and crushing industries may keep the prices supported over Rs 8,000 per quintal, sources said. According to reports of Angel Commodities, the production of turmeric for 2016-17 may cross 11 lakh tonne compared with 8 lakh tonne last year.

Under pressure
* The turmeric market is likely to come under pressure as reports of sowing in major producing states indicate higher production for the season
* Turmeric prices touched a record high of Rs 16,350 per quintal in November 2010 and touched a low of Rs 3,360 per quintal in 2012
* Very high returns from turmeric prompted farmers to switch from cotton, tapioca and soybeans in many places

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