Turmeric prices have dropped by ₹500 a quintal over the last couple of weeks on an “unexpected” slump in domestic and export demand, traders have said.
“We usually witness demand before the Navratri, but this time it has been lacking,” said RKV Ravishankar, President, Erode Turmeric Merchants Association in Tamil Nadu.
“Even export demand is slack. It might be a case of selling centres holding old stocks and wanting to exhaust them first,” he said.
Lack of liquidity
“Trading in turmeric has been dull over the past few weeks. The lack of liquidity in trade and prices on the futures market have dropped by ₹500 a quintal. The turnover among traders is low,” said Sunil Patil, proprietor, Varadlaxmi Trading Company, Sangli, in Maharashtra.
“With the new crop due in 3-4 months, demand is slack for turmeric. Export demand is weak,” said Amrutlal Kataria, a trader from Nizamabad in Telangana.
According to NCDEX data, turmeric November contract prices have dropped to below ₹7,000 a quintal currently from about ₹7,432 on September 16. In the spot market, Nizamabad turmeric prices have declined to ₹7,199.40 a quintal from ₹7,406.60 during the same period.
Production revised higher
At the Erode agriculture produce marketing committee yard, the modal price (that rate at which most trades take place) for the finger variety turmeric dropped to ₹6,544 a quintal from ₹6,679 at the start of the month.
One main reason for the trend could be the production of turmeric being raised in the second advanced estimate of horticultural crops by the Ministry of Agriculture in July.
Turmeric production in the 2021-22 crop year (June-July) has been projected at 13.31 lakh tonnes against 11.24 lakh tonnes the previous year with the area increasing to 3.5 lakh hectares from 2.93 lakh hectares. In the first advance estimate, the crop was pegged at 11.76 lakh tonnes.
“Processors are not willing to sell turmeric at current rates. Inventories with them are good. But slack demand could put further pressure on prices, which could drop to around ₹6,000,” Patil said.
Exports up 18%
Even good grade turmeric delivered in Mumbai for export is quoted at ₹6,800-7,000 a quintal. There is no parity with regard to superior grade Rajapuri which is quoted at ₹8,000 a quintal, he said. Though overseas demand is weak now, shipments during April-July increased in volume and value.
According to Spices Board data, turmeric exports during April-July this fiscal increased 18 per cent to 62,246 tonnes fetching ₹623,27 crore compared with 52,875 tonnes earning ₹530.18 crore in the year-ago period.
Kataria expects turmeric prices to head lower towards ₹6,000-6,500 a quintal. “The new crop is reported to be good with no report of any damage. If rains don’t create any damage, we will have a good crop,” he said.
“This year, we have not heard anything adverse. If there is no damage due to rains in October-November, the crop will be good,” said Ravishankar.
“There are talks of the crop being lower here or there but no clear details are available. It is likely that the trade might take advantage of the rain in October-November to push up prices around ₹9,000 in December before cooling down,” Patil said.