Turmeric prices are under pressure in the near term due to higher arrivals in the terminal markets and lower exports, traders said. However, the fundamentals support a firm market on the basis of reports that the production in Tamil Nadu, Andhra Pradesh and Telengana would be lower than last season. 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. Sunand Subramaniam of Kotak Commodities told FE that the harvesting has started and is expected to peak by February and extend till March. He is bullish in the short and long term on the commodity estimating that the supplies to be lower by 20% compared to last season. “The pressure in the market is due to fresh arrivals and this may lead to lower prices in the near-term. Some traders say that the decline would be limited due to lower quality of the fresh supply.
Lower stocks will also support a firm market in the short- and long-run as the current stock of 6 lakh bags is way shorter than the 10 lakh bags of year ago period,” he added. Turmeric spot prices in the NCDEX counter on Monday evening closed lower at Rs 7,675 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. Broking firm Angel Commodities reports that turmeric are futures expected to trade sideways to down due to weak physical demand and higher supplies. “The supplies have improved during last one month due to new season arrivals, government auctions and lower exports data. The arrivals have been higher during December this year at 19,938 tonne compared to 10,922 tonne last year same period according to Agmarknet data. The export of turmeric is down by 17% to 63,395 tonne for the first 7 month of FY 2017-18 compared to last years’ exports,” Angel sources said.
Increased global demand for turmeric, especially in the pharmaceutical sector, drove its exports to 1,16,500 tonne in volume and Rs 1,241 crore in value terms in 2016-17. There are expectations of improved demand in coming weeks from the export market. 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 the extractors and grinders.