Soaring Indian turmeric prices may help recover crop’s lost acreage

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With turmeric prices at their highest level in seven years, growers are likely to be tempted to crop the spice and recover a good portion of the acreage that was feared lost due to lack of rainfall in the planting areas initially. Hopes for an increase in turmeric cultivation come after initial projections indicated a decrease of nearly 20 percent in the area.

The area under turmeric increased to 3.33 thousand hectares in 2021-22. The center has not yet released area and production data for 2022-23.

On Tuesday, August turmeric futures (polished cultivators) closed at $9,842 a quintal and October futures contracts at $10,320 on NCDEX. In the spot market, Turmeric (farm refinement) closed at $8901.50 a quintal in Nizamabad.

Two reasons

There are two reasons for the high price of turmeric. One, the turmeric crop was damaged during the unseasonal rains in March and April. “Now, there has been a lack of rainfall in the growing regions, particularly Karnataka,” said Sunil Patil, owner of Varadlaxmi Trading Company, Sangli, in Maharashtra.

Continued rain for 8-10 days has resulted in high moisture content in the crop which does not allow time for it to dry. This affected approximately 7-8 lac sacks (50 kg each) or 35,000-40,000 tons of crop in Maharashtra. The rains led to heavy crop losses in the Marathwada district. Ankit Agarwal, Director, Amar Agarwal Foods India Pvt Ltd. said:

He said the delay in the southwest monsoon rains was also having an impact.

Grace in disguise

“There are fears that the area under turmeric may decrease by 25 percent in the current planting season,” said Amrutlal Kataria, a turmeric trader in Nizamabad.

“Rising prices could be a blessing in disguise because farmers may now show interest in growing more turmeric,” Agarwal said.

The optimism about the acreage’s recovery stems from the fact that some farmers in the western parts of Tamil Nadu and Karnataka are showing interest.

Turmeric sowing, which usually begins in May, continues until July. Since there is still time to complete the sowing, the hopes are that the land can be somewhat cultivated.

export request

“More than 90 percent of the farmers in the western parts of Tamil Nadu show interest in growing turmeric,” Agarwal said. He said the loss could be set at 5-10 percent and the area might be about 90 percent of last season’s coverage.

For example, Tamil Nadu produces 13-14 sacks annually. In view of the price hike, Agarwal said, it can produce 12.5-13 sachets.

Demand for high-quality turmeric has driven up prices in light of crop losses due to rains, Patel said. “Due to lack of rain, turmeric coverage has decreased by 30 percent in Karnataka and 20-30 percent in Maharashtra, especially in the Sangli-Kolhapur belt,” he said.

Switch to other crops

Patel said farmers are also expected to switch to sugarcane from turmeric given the stable prices over the past three to four years.

Agarwal said that tor (pigeon peas) and soybeans could be turned into alternative crops that turmeric growers could look at. At the moment, the price of peas is going up due to the lack of supply. Concerns about the impact of El Nino on the southwest monsoon are likely to lead to further price hikes. In this way, it can be a useful switch for farmers.

The development comes at a time when the demand for exports is good. “Export demand is on the rise, although the same cannot be said for the domestic market,” Qataria said. “Export demand has increased while we are seeing some movement in the domestic market as well,” Patel said.

According to Geojit Commodity, turmeric exports increased by 11 percent in the 2022-23 fiscal year to 1,70,085 tons. “Turmeric is likely to be bullish over the next few months,” Patel said.

Geojit Commodity said turmeric prices rising above $10,380 could improve sentiment. Wednesday’s trading in the NCDEX may provide clues to the direction of spice prices.