Agri Business

30% price surge takes colour off turmeric exports

Subramani Ra Mancombu Chennai | Updated on February 26, 2021

No demand for shipments at current prices of around ₹9,000, say traders

Export prospects of turmeric have been affected following a 30 per cent increase in its prices since the beginning of this month across various primary agricultural markets in the country.

According to the Ministry of Agriculture and Farmers’ Welfare data, turmeric prices increased to ₹8,294 a quintal for the finger variety on Friday at Erode in Tamil Nadu as against ₹6,250 on February 2. Prices of the bulb variety increased to ₹7,649 from ₹5,994 during the same period.

On NCDEX, April contracts for delivery from Nizamabad increased from ₹6,402 a quintal to ₹8,420.27 and May contracts from ₹6,480 to ₹8,439.90 during the period. Nizamabad and Erode are the primary trading centres for turmeric in the country.

“Prices have topped ₹9,000 in private markets in Erode. They have surged on talks of crop shortage,” said RKV Ravishankar, President, Erode Turmeric Merchants Association. “Prices have increased by ₹3,000 a quintal in the past fortnight to a month,” he said.

Fear of crop damage

“Prices in Nizamabad are currently at ₹8,700 a quintal. The sharp rise in turmeric prices are due to fears of crop damage in the Nizamabad region of Andhra Pradesh and also Maharashtra,” said Amrutlal Kataria, a Nizamabad-based trader.

Fears of damage to the turmeric crop are the reason why prices are also higher compared to the last six years. During the same time last year, prices ruled at less than ₹5,700 a quintal.

“The crop is feared to be 20-25 per cent lower in the Nizamabad region as unseasonal rains hit the growing regions last year. In Maharashtra, rumours claim that the crop is 10-40 per cent lower but we think the crop loss may not be huge,” said Kataria.

Poonam Chand Gupta, another trader in Nizamabad, said that excess rainfall during October affected the development of the crop in Telangana, Andhra Pradesh and Maharashtra.

Even in Tamil Nadu, which is another major producer of turmeric, production has been hit due to the non-availability of farm labour post-Covid-19.

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.

No clear estimates have been made, though Kolkata-based analyst Premchand Motta has pegged at 89-90 lakh bags (70 kg each) compared with 97-98 lakh bags last year.

Crop production

According to data by Ministry of Agriculture, turmeric production was estimated at 9.46 lakh tonnes during the 2019-20 season (July-June), compared with 9.61 lakh tonnes the previous year, despite the area under the crop rising by 4,000 hectares to 2.57 lakh hectares. “Rains also lashed the growing parts of Maharashtra last month and are feared to have had an impact on the crop,” Kataria said, adding that if losses were severe in the western State then “the rate can be anything”.

Arrivals, on the other hand, have a different story to say. During February 1-26, provisional arrivals of turmeric in the country are 35,070 tonnes compared with 26,494 tonnes during the same period a year ago.

Arrivals in Maharashtra have trebled at 16,154 tonnes compared with 5,099, while in Telangana they are 15,476 tonnes against 14,694 tonnes. Tamil Nadu, however, is witnessing a drop at 1,767 tonnes against 2,830 tonnes during the period.

Export demand

Gupta said that turmeric prices have run up quickly on export demand. “There has been good demand from Bangladesh and Gulf destinations,” he said.

However, Kataria said that the demand from Bangladesh and the Gulf was a case that existed last year. “At current prices, there is no demand for turmeric export. Even domestic demand is subdued,” he said.

Ravishankar said that at the current prices, there was no new demand for exports. “There is no demand for exports at these rates,” he said.

According to data by the Spices Board, turmeric exports during the April-September period of the current fiscal were 99,000 tonnes compared with 69,500 tonnes during the same period a year ago with the value of the shipments rising 35 per cent.

Kataria said that prices have run up too high within a short span of time. “Where prices should have gone up ₹1,500, they have increased by ₹2,500. We expect that additional ₹1,000 to be set right through correction, which has already begun,” he said.

Ravishankar asked where the demand could come from since they have run too high now. “We think prices have peaked for turmeric and expect a decline next week,” Kataria said.

Published on February 26, 2021

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