After declining over 20% from peak, turmeric prices may gleam during festive period

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After having dropped by over 20 per cent since rising to a record high in May this year, turmeric prices will likely gain during the festival period because of low stocks with stakeholders.

“There could be stocks of some 50 lakh bags (55 kg each) in the country. Another six months are left before the new crop can come to the market. It could be a hand-to-mouth situation leading to another price rally,” said Ankit Agarwal, Director at the Erode-based Amar Agarwal Food India Pvt Ltd. 

“AgriWatch anticipates a rise in prices due to lower 2024 ending stocks, which is expected to impact the stock-to-use ratio, decreasing from 10.49 per cent in 2023 to 5.83 per cent in 2024,” said Biplab Sarma, Senior Research Analyst, AgriWatch.

“Producers are reportedly holding stocks in expectation of fetching higher prices, which could lend support along with upcoming festival demand,” said Anu V Pai, Commodity Research Analyst, Geojit Financial Services.

Current prices

Currently, turmeric October futures are ruling at ₹16,446 a quintal on the NCDEX, while spot prices are quoting at ₹16,161 in Nizamabad.  

Fears of a drop in production due to unconducive weather conditions despite higher acreage last year bolstered the yellow spice prices. Pai said they hit an all-time high of ₹20,430/quintal on NCDEX in May 2024. Turmeric prices on NCDEX are up by more than 15 per cent in 2024.

Sarma said turmeric arrivals in spot markets will decrease in the coming days. Pai said signals are mixed in the immediate future. 

Agarwal said prices are ruling stable now as demand during June-August is usually slack. 

“Prices went up too high too quickly. It led to demand contraction. Good monsoon, especially in Maharashtra, played a role in stabilising the market,” he said. 

Higher sowing

Despite the area under the yellow spice crop being higher and the new arrivals expected next year, there is a shortage of stocks as a result of lower production this year, said Sarma. 

Pai, quoting the Spices Board, said turmeric exports declined during April-May by 20 per cent year-on-year.

Agarwal said exports declined as turmeric prices were higher. “But next year, we will need stocks for exports as well besides normal demand as the demand is expected to pick up. As of now, it is a hand-to-mouth situation,” he said.

Turmeric could see a rally in prices after Ganesh Chathurthi, the Amar Agarwal Foods director said.

Pricey seeds

 “With prices staying higher, (turmeric) acreage is expected to be higher in the major growing States – Telangana, Maharashtra, Andhra Pradesh and Tamil Nadu,” said Pai. 

Sarma said turmeric sowing across the country has been completed as expected. “In Maharashtra, the area under turmeric has increased by 30-35 per cent compared to last year. Overall, all-India acreage may go up by 20-25 per cent compared with the last year,” said the AgriWatch Senior Research Analyst

Agarwal said initially, expectations were that the area could be 60-100 per cent higher. “But high prices for seeds and lack of quality planting material played spoilsport. Overall, the area under turmeric this year could be 30-40 per cent higher,” he said. 

Pai said, however, the output will largely depend upon how the monsoon pans out in the major turmeric growing States and the weather during the later stages of cultivation.