Turmeric, one of the must spices in every Indian kitchen, could pinch your pockets in 2024 as indifferent weather this year will likely lower its production by 25 per cent, traders and analysts say. However, demand, which was seen at a record low in October-November, could be subdued and offer some relief.

Jagdeep Grewal of Gujarat-based Shreeji Agri Commodity Pvt Ltd, said as per market reports, turmeric plantations are lower by 25-30 per cent versus normal area.

Shift to other crops

“Turmeric production in 2023-24 is expected to be lower on unfavourable weather conditions during the sowing season and farmers shifting to other remunerative crops,” said Anu V Pai, analyst at Geojit Financial Services.

“Turmeric crop could be 20-25 per cent lower in Tamil Nadu, 20 per cent in Telangana and 20-25 per cent in Andhra Pradesh. On an average, the crop is expected to be 20-25 per cent lower,” said Ankit Agarwal, Director at Erode-based Amar Agarwal Foods India Pvt Ltd. 

“The crop in the North, such as Maharashtra, is feared to be 30 per cent lower, while in Tamil Nadu it is expected to be 20 per cent lower,” said RKV Ravishankar, President, Erode Turmeric Merchants Association. “The market is estimating a crop of 4,87,500 tonnes compared with  7,35,000 last season, which is 33 lower. That is why prices made a run after that, though they have cooled a bit from highs,” said Grewal.  

Record low demand

“The standing crop conditions are seen as average. According to the Spices Board, turmeric production during 2022-23 was estimated to be around 1.16 million tonnes and market estimates are that the production in 2023-24 season will be 10-12 per cent lower,” said Geojit’s Pai.

“The crop was affected by a prolonged dry period across the country. Though it rained later and some have sown the crop, we have to see how much has been made up,” Ravishankar said.

Agarwal said initially prices had run up to ₹16,000 a quintal in the futures market before dropping to about ₹12,000. “Prices declined mainly since demand was totally slack in the previous two months. Now that the prices have dropped, demand is back. Probably, people are comfortable with these prices,” he said. 

Ravishankar said, “I have not seen such a low demand in my 50 years in the trade, particularly during October-November.”

Currently, turmeric for delivery in April is quoted at ₹14,320 on NCDEX. Spot price of polished turmeric in Nizamabad, Telangana, is quoted at ₹13,282.60 a quintal. The premium Rajapur turmeric is ruling at ₹14,710.

Trend setters ahead

At the Erode agricultural produce marketing committee yard, the modal price (the rate at which most trades take place) of finger turmeric on Friday was ₹10,850 a quintal, while in Nizamabad, it traded at ₹10,926. “Prices have cooled a bit now… (But there is a) very significant decrease (in production)... We may see prices being range-bound with little bounces or dips till January. After that, with more clarity of crop production, prices will start moving up. There will be more upward tilt,”  Grewal said.

Pai said, “The new crop arrivals are expected to begin after mid-January. Production, climatic conditions during the harvest and post-harvesting period, festival season demand and export demand may set the trend in the days ahead.”

Agarwal said since prices will be good, probably record high, farmers will feel encouraged to go for turmeric next year. “This means, another 5-7 lakh bales (50 kg each) of the production will be retained for sowing. So, there could be an additional shortfall in supplies to that extent,” he said. 

Pai said April turmeric contracts on NCDEX will rule at ₹15,400-16,400 a quintal on the upper side and ₹12,900-12,400 a quintal on the downside.

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