As turmeric prices have surged to a seven-year high, growers are likely to be lured by the spice crop and recover a fair part of the acreage that was feared to be lost due to deficient rainfall in growing areas initially. Hopes of a rise in turmeric cultivation comes after initial projections pointed to a nearly 20 per cent fall in acreage. 

The area under turmeric increased to 3.33 lakh hectares in 2021-22. The Centre is yet to come out with the acreage and production data for 2022-23.

On Tuesday, turmeric August contracts (farmer polished) closed at ₹9,842 a quintal and October futures at ₹10,320 on NCDEX. In the spot market, turmeric (farmer polished) closed at ₹8,901.50 a quintal at Nizamabad. 

Two reasons

“There are two reasons for the rise in turmeric prices. One, standing turmeric crop was damaged during the unseasonal rains in March-April. Now, there has been deficient rainfall in the growing areas, particularly Karnataka,” said Sunil Patil, proprietor, Varadlaxmi Trading Company, Sangli, in Maharashtra.

The continuous rains for 8-10 days resulted in high moisture of the crop allowing no time to dry it. This affected nearly 7-8 lakh bags (50 kg each) or 35,000-40,000 tonnes of the crop in Maharashtra. “Rains resulted in a huge crop loss in the Marathwada region. The quality took a hit as the crop turned red,” said Ankit Agarwal, Director of Erode-based Amar Agarwal Foods India Pvt Ltd.

The delay in the south-west monsoon setting in has also had an impact, he said. 

Blessing in disguise

“There are fears that the area under turmeric might decline by 25 per cent in the current planting season,” said Nizamabad-based turmeric trader Amrutlal Kataria.

“The rise in prices could be a blessing in disguise as farmers may now show interest to plant more turmeric,” said Agarwal. 

The optimism of a recovery in the acreage stems from the fact that some of the farmers in western parts of Tamil Nadu and Karnataka are showing interest.

Turmeric sowing which normally begins in May continues till July. Since there is still time left for the sowing to be complete, hopes are that the acreage can be made up to some extent. 

Export demand

“Over 90 per cent of the farmers in western parts of Tamil Nadu are showing interest to sow turmeric,” Agarwal said. The loss could be set right by 5-10 per cent and the acreage could be around 90 per cent of last season’s coverage, he said.

For example, Tamil Nadu produces 13-14 lakh bags annually. In view of the price surge, it could produce 12.5-13 lakh bags, Agarwal said. 

Patil said demand for quality turmeric has pushed up prices in view of the crop loss due to rains. “Due to deficient rains, turmeric coverage is 30 per cent lower in Karnataka and 20-30 per cent in Maharashtra, particularly in the Sangli-Kolhapur belt,” he said. 

Shift to other crops

Also, farmers are expected to shift to sugarcane from turmeric in view of flat prices over the last 3-4 years, Patil said. 

Agarwal said tur (pigeon pea), and soyabean could turn out to be the alternative crops that turmeric growers could look at. Currently, pigeon pea prices are surging on short-supplies. Fears of El Nino impacting the south-west monsoon will likely lead to further rise in prices. That way, it could be a beneficial switch for growers. 

The development comes at a time when export demand is good. “Demand for export is on the rise, though the same cannot be said about the domestic market,” Kataria said. “Demand for export has increased while we are seeing some movement in the domestic market too,” said Patil. 

According to Geojit Commodity, turmeric exports increased 11 per cent in the 2022-23 financial year to 1,70,085 tonnes. “Turmeric will likely be bullish over the next few months,” Patil said.

Geojit Commodity said turmeric prices rising above ₹10,380 may improve sentiments. Wednesday’s trading on NCDEX may provide clues on the direction of the spice’s prices.

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