Commodities

Turmeric loses lustre on slack domestic demand

Subramani Ra Mancombu Chennai | Updated on July 14, 2021

Pandemic shutdowns affect offtake; traders expect a rise in acreage

Turmeric prices at various agricultural markets across the country have dropped by about 10 per cent since the beginning of this month on slack domestic demand.

Currently, the finger variety turmeric is quoted below ₹7,000 a quintal compared with over ₹7,500 at the beginning of July. In Erode, one of the key markets, it was quoted at ₹6,889 against ₹7,578 during the period.

The superior Rajapuri variety in Maharashtra has lost nearly ₹400 a quintal to ₹7,163. In April, the Rajapuri variety topped ₹12,500 a quintal. The finger variety was quoted above ₹9,000 during the same period.

On NCDEX, turmeric futures for August delivery ruled at ₹7,430 a quintal on Wednesday, while Nizamabad spot prices were quoted at ₹7,255.95.

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Pandemic shutdowns

“Domestic demand has been affected by Covid pandemic shutdowns. Supplies have also been good,” said Nizamabad-based trader Amrutlal Kataria.

“Usually, turmeric demand is weak until August 15. In addition, this year turmeric prices surged too high too quickly at the start of the year,” said RKV Ravishankar, President of Erode Turmeric Merchants Association.

“Probably, the trade under-estimated the crop this year. We thought the yield would be lower by 30-35 per cent but it seems to be lower by less than 20 per cent,” said Sunil Patil, a turmeric supplier based at Sangli, Maharashtra.

Uncertainty, including over the lifting of the material by stockists, created by the pandemic shutdowns has affected domestic demand, he said.

Though prices have headed south over the last couple of months, they are still higher than the year-ago period, when the finger variety ruled at ₹5,840 and the Rajapuri variety at ₹6,425.

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Exports robust

“Farmers have begun to sell turmeric without waiting for the usual lean July-August sale period to get over. They need cash for Kharif sowing,” Patil said.

As a result, supplies have increased putting pressure on prices.

“Carryover stocks of turmeric are also high,” said Ravishankar. Covid shutdowns have led to build up of the inventory.

Despite slack domestic demand, exports continue to be good. “Exports to the Gulf and Bangladesh are continuing and helping to prevent prices from falling,” said Kataria.

Ravikumar said exports were continuing at a good pace. Patil said Bangladesh was buying a good volume of Indian turmeric. Currently, turmeric for exports is quoted at about ₹7,500 a quintal and above.

According to the Spices Board, turmeric exports last fiscal were 33 per cent higher at 1.87 lakh tonnes compared with 1.37 lakh tonnes in 2019-20.

Higher sowing

Growers have been encouraged by the good prices this year and are likely to bring more area under turmeric this year. “In some areas such as Nizamabad, the planting is 20-25 per cent higher than last year. In other areas, too, over 10 per cent increase in sowing has been reported,” Kataria said.

Ravishankar said that the next crop could be up by 25-30 per cent, going by the current sowing trend. “This seems to be another reason why prices are down,” he said.

Kataria said final sowing figures for turmeric would be available by the month-end.

However, Patil said the area under turmeric would be lower, particularly in States such as Maharashtra, as growers have shifted to soyabean. “This year, returns from soybean have been better. Farmers prefer to go for the oilseed,” he said.

According to the first advance estimates of horticultural crop for the last season (July 2020-June 2021), turmeric production was projected lower at 11.06 lakh tonnes (lt) against 11.53 lt the previous year.

Turmeric production was estimated lower due to unseasonal rains damaging the crop in Maharashtra, Karnataka and Telangana during September-October last year. In Tamil Nadu, dry weather impacted the crop.

Published on July 14, 2021

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