Turmeric gleams as fears over lower crop area grip the market
Turmeric prices jumped to the highest level in nearly 13 years due to fears of a decrease in acreage with the crop this year and a shortage of seeds in some areas that farmers could replant.
Traders fear that prices will touch the 2010 high of 170 rupees per kilogram or 1,70,000 INR per quintal in the spot market.
On Tuesday, October turmeric futures crossed 13,000 quintals to rise to 13,042 quintals before settling at 12,832 quintals. In the spot market, the typical price (the rates at which most trades take place) for finger variety turmeric was quoted at ₹9,898 quintals in the yard of Nizamabad Agricultural Products Marketing Committee. In Nanded in Maharashtra too, the prices have climbed to $9,800 levels.
Anu V Pai, Commodities Research Analyst at Geojit Financial Services, said, “Amid good demand for exports, the drop in arrivals coupled with delays in sowing and unfavorable weather has sent turmeric prices higher.”
Low supply
AgriWatch endorsed the view saying that strong sentiment is being observed in turmeric markets due to lower supplies in key markets, along with concerns that sowing in key growth areas will be affected, slow sowing and good export demand.
Turmeric exports, which rebounded after the Covid pandemic, increased by 11 percent year-on-year to 1,70,085 tons in the 2022-23 fiscal year. There are two sides to the high price of turmeric. There is a significant lack of rainfall in the Marathwada and Vidarbha districts of Maharashtra. Ankit Agarwal, director of Amar Agarwal Foods India Pvt Ltd, Erode, said the shortage is around 50 per cent and if the El Nino factor comes into effect, it could affect the space further.
High seed prices
Besides these two regions, Tamil Nadu, Telangana and Andhra Pradesh are also experiencing area reduction due to lack of rain, said Amrtool Kataria, a trader from Nizamabad.
Even if the monsoon makes up for the shortfall, farmers in Maharashtra will find it difficult to replant as they are facing a shortage of seeds. “The price of seeds has tripled because of the shortage,” said Poonam Chand Gupta, another trader from Nizamabad.
“Farmers in Tamil Nadu and other southern states may be able to get the needed seeds,” Agarwal said. “Right now, agriculture is only 65-70 percent of last year’s coverage,” said Gupta.
Interesting reason
AgriWatch said sowing activities in some turmeric growing districts in Telangana, Tamil Nadu, Andhra Pradesh and Maharashtra are progressing at a slower pace over the past few weeks than in the previous season.
The research company has an interesting reason for the decline in turmeric. “Turmeric acreage is expected to decline mainly due to lower realization by farmers compared to other crops such as cotton and maize. Biplab Sarma, Senior Research Analyst – Commodities (Spices), AgriWatch said:
AgriWatch expects the area under turmeric to decrease by 12 percent compared to 1.75 thousand hectares last year. “Area may go down as much as 20 percent, which will push prices higher than in 2010, when it went up to INR 170 per kg,” Agarwal said.
It could be a good year for turmeric prices as they could go up sharply in the coming months.
Besides the low sowing in the current Khareef season, the turmeric crop was affected by the unseasonal rains in March. This affected the quality of the crop and as a result, high quality turmeric has been in demand for the past two months, driving up the prices.