M Sathyamoorthy, secretary of the Erode Turmeric Merchants Association, told FE, the lower rainfall and water level in reservoirs has led to many farmers refraining from farming turmeric.
The Turmeric market is firming up with reports of lower than normal rainfall in the regions that grow the commodity. 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.
M Sathyamoorthy, secretary of the Erode Turmeric Merchants Association, told FE, the lower rainfall and water level in reservoirs has led to many farmers refraining from farming turmeric. He estimates that area under turmeric would be 30-40% lower than the previous year with many farmers in Erode region switching to tapioca.
“Turmeric has moved up by Rs 500 per quintal in the last one week and we expect the market to remain firm due to the expectations of a lower crop next season. The water level in Bhavani dam is low and irrigation of the crop during the ten month cycle would be a concern,” he added.
Turmeric spot prices in the NCDEX counter on Thursday evening closed at Rs 6,700 per quintal. Turmeric prices hit a record high of Rs 16,350/quintal in November 2010 and touched a low of Rs 3,360/quintal in 2012. However, commodity report by broking firm Angel reports that there is a revival in monsoon rains in turmeric growing districts in south India. The rain deficit in south peninsula is seen lower at 20.8% from about 30% deficit last week.
Angel reports that turmeric exports during April is lower by 1.61% to 10,744 tonne as against 10,919 tonne during the same month a year ago. However, turmeric exports in first four months in 2019 is higher by 10% to 42,000 tonne compared to 38,171 tonne in the same period of last year.
Last year, the country exported about 1.33 lakh tonne of turmeric compared to 1.11 lakh tonne in the previous year.
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.
Report from broking firm Geojit adds that turmeric seeds which are stored on the field itself for sowing purpose reportedly damaged by 10 -15% due to dry weather. The report adds that the next two weeks are crucial, and if the rainfall continues to be lower, the area is likely to go down.
Experts from the Tamil Nadu Agricultural University said non-traditional areas like north-east 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.
State-run Spices Board data showed that turmeric was grown in 2,24,260 hectare during 2017-18 with an approximate production of 11,07,920 tonne , which is lower to 2,48,050 hectare and 12,15,520 tonne during 2016-17.