Turmeric prices are likely to remain steady and not rally, due to good stocks in the pipeline. Lower production in the last crop season may support the market a bit but reports of a normal monsoon may cap a rally. India is the largest turmeric producer with 75-80% of global production. Demand has been rising rapidly from the medicinal and cosmetic industry.
N Raveendran, former national consultant, National Agricultural Innovation Project (NAIP) , told FE that demand and supply is likely to be in equilibrium despite lower production due to good carry-over stocks.
“Production was lower in Andhra Pradesh by 20-25%, while Tamil Nadu managed to produce the same volume. Maharashtra’s production increased. But the major impact is the stocks in the pipeline, which along with the new crop, is sufficient to meet the demand,” he added.
Tamil Nadu Agricultural University (TNAU) reports that India’s domestic consumption and export demand requires 65-75 lakh bags of turmeric per annum. Moisture stress was observed in Telangana, Karnataka and Maharashtra as the intensity of monsoon rain decreased during July and August. Acreage slipped lower in Nizamabad, Kadappa in Andhra Pradesh, Karnataka and Sangli in Maharashtra. However, in Tamil Nadu, due to better irrigation facilities and sufficient rains, acreage increased by about 10-12 %.
Turmeric spot prices in the NCDEX counter on Thursday evening closed lower at R8,357.5 per quintal. Prices touched a record high of R16,350 per quintal in November 2010 and 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.
Raveendran estimates the market to remain steady and move up on robust export demand to a high of R10,000 a quintal.