Webinar :Register now for Commodity Ki Paathshala webinar on ‘FPOs & Agriculture Marketing-The Beginning of a New Era’ on January 22, 4pm

Turmeric prices rise in India on demand pick-up, fears of lower output

On National Commodities and Derivatives Exchange (NCDEX), unpolished turmeric for delivery in April ruled at Rs 6,198 on January 13. According to NCDEX, spot prices have increased to Rs 5,725 from Rs 5,582 a week ago.

January 13, 2021 / 05:28 PM IST

Subramani Mancombu

Turmeric prices in India have increased by Rs 200-300 a quintal in primary agricultural markets on pick up in demand and fears of lower production this year.

“Prices have increased in the last 2-3 days across all centres. In some places, prices are up as high as Rs 400. Demand usually picks up after January 15 and this increase can be related to it,” said Erode Turmeric Merchants Association President RKV Ravishankar.

“Prices had bottomed out last year. They have gained now as turmeric production is expected to be 10 percent due to lower cultivation. Poor prices last year were a dampener on growers,” said Amrutlal Kataria, a Nizamabad-based trader.

According to Ministry of Agriculture data, prices of finger variety turmeric almost touched Rs 6,000 on January 12 against Rs 5,640 a week ago at Erode in Tamil Nadu.

Close

In Nizamabad, another major turmeric trade centre in Telangana State, the finger variety turmeric ruled at Rs 5,815 a quintal against Rs 5,532 a week ago.

On National Commodities and Derivatives Exchange (NCDEX), unpolished turmeric for delivery in April ruled at Rs 6,198 on January 13. According to NCDEX, spot prices have increased to Rs 5,725 from Rs 5,582 a week ago.

Last year during the same period, prices were a tad higher than Rs 6,000 a quintal.

Prices could have gained further but for the four percent ceiling on price movement on NCDEX, said Poonam Chand Gupta, another trader in Nizamabad.

“Speculators seem to be pushing prices up,” said Ravishankar.

“Prices are gaining as there are fears that there could be as much as 25 percent crop loss in states such as Telangana and Andhra Pradesh. Even in Maharashtra’s Sangli district, the crop has been affected,” Gupta said.

Excess rainfall during October had affected the development of fruit in the three States, he said, adding that even in Tamil Nadu, another major producer, production was lower due to non-availability of farm labour in the aftermath of the novel Coronavirus pandemic.

Telangana is the largest turmeric producer, followed by Tamil Nadu and Andhra Pradesh with the three States accounting for nearly half the country’s total production.

During the 2019-20 season (July-June), India’s turmeric production was estimated at 9.46 lakh tonnes compared to 9.61 lakh tonnes the previous year, despite the area under the crop rising by 4,000 hectares to 2.57 lakh hectares.

According to Telangana Agricultural Department data, the average daily arrival of the finger variety turmeric is 86.7 tonnes this year against last year’s daily arrivals of 73.7 tonnes in Nizamabad.

However, the average daily arrival of the bold variety turmeric is 19.75 tonnes this year versus 39.3 tonnes last year.

“The growth of the finger variety has been affected by the rains. Its length will be a little shorter,” Kataria said.

Ravishankar said turmeric production would be around last year’s level, though the trade was talking of plus or minus 10 percent.

“We will get to know the real position only when arrivals begin fully, though the trade may talk about crop loss here and there,” he said.

The turmeric crop has begun arriving in Telangana and Andhra Pradesh since last week, while it will start in other parts of the country in a month’s time.

Exports have helped turmeric prices gain. “Exports have increased by nearly 40 per cent this fiscal. The market is good for exports,” said Gupta from Nizamabad.

“Exports this fiscal have been good with Bangladesh being a major buyer,” said Erode Merchants Association’s Ravishankar.

Gupta said that Indian turmeric was probably finding its way into Pakistan from Bangladesh in view of Islamabad banning imports from India following the Balakot air strike in 2019.

Ravishankar said it was likely given the fact that specifications for turmeric from Bangladesh was not much different from those for India. “Bangladesh imports of Indian turmeric have doubled,” he said.

According to the Spices Board, Indian exported 99,500 tonnes of turmeric valued at Rs 8,581 crore during April-September 2020 against 69,500 tonnes worth Rs 6,338 crore during the same period previous fiscal.

According to Kataria, turmeric exports gained as its usage increased in view of Coronavirus pandemic. “People began using it more in their food to tackle COVID-19,” he said.

The rise in exports comes despite a ban by Sri Lanka on turmeric imports from India since December 2019. Colombo had banned Indian turmeric, resulting in the spice’s prices ruling over Rs 3,000 a kg in the island nation during October-November last year, to boost domestic production.

Sri Lanka was annually importing around 5,000 tonnes turmeric from India.

The ban on Indian turmeric imports had led to smuggling of the spice through the sea route.

Indian exporters were least perturbed by the ban, saying Lanka’s stoppage would not have much impact.

(Subramani Ra Mancombu is a journalist based in Chennai, who writes on topics in commodities and agriculture)

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Subramani Mancombu is a journalist based in Chennai who writes on commodities and agriculture
first published: Jan 13, 2021 05:24 pm

stay updated

Get Daily News on your Browser
Sections