Turmeric futures soar past ₹10,000 a quintal on supply concern

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NCDEX turmeric prices rose on the decline in the fall sowing area, crossing the $10,000 quintal mark for the first time since last February.

Turmeric futures for October delivery on the exchange jumped four percent to 10,326 quintal rupees on Friday. Given the tight supply situation, the October contract jumped nearly 60 percent in two months from a low of $6,452 a quintal.

The August near contract also joined the rally, gaining four percent to reach INR 9,862 on Friday.

Besides the declining area, the turmeric market has witnessed a significant price hike driven by fear of crop damage caused by the recent rains in Maharashtra and Andhra Pradesh. This sparked concern about a possible lower yield and sent turmeric prices up more than seven percent in a week and to a five-month high.

This is coupled with concerns about the lack of precipitation due to a threat El Nino It also added to the upside in the market.

Ajay Kumar, Director of Kedia Commodities, said sowing of turmeric has been delayed by 15-20 days as farmers in major developing countries anxiously await the monsoon rains.

He said that the area for sowing turmeric in Kharif is expected to decrease by 20-25 percent this season as farmers choose other crops which will further tighten the supply of turmeric leading to an increase in prices.

The turmeric cultivation area in Maharashtra, Tamil Nadu, Andhra Pradesh and Telangana is expected to decrease by 10-25 percent compared to the previous season. In addition, sudden rains in various places in Andhra Pradesh damaged turmeric crops, leading to disruption of supplies.

Exporters have started buying high quality turmeric due to fears that it will not be available in the future.

He said that the outlook for turmeric prices remains bullish due to the expected weakness in monsoon rainfall and the expected decrease in area, which will likely affect turmeric production.