Turmeric prices will likely rise further despite 80% gain year-on-year

After having gained about 80 per cent year-on-year, turmeric prices will likely rise further on lower production as a result of the sowing of the crop dropping by at least 20 per cent this year, say traders and analysts.

“Overall, prices are higher compared with the same period last year due to lower acreage. Prices have jumped as the stakeholders anticipate low production,” said Biplab Sarma, Senior Research Analyst, AgriWatch. 

“Turmeric prices on NCDEX have gained over 70 per cent in 2023. Delay in sowing this kharif season, erratic monsoons and concerns over yield is pushing up turmeric prices amidst robust export demand,” wrote Anu V Pai, commodity research analyst, Geojit Financial Services, in businessline’s website while discussing spices prospects for 2024.

Current prices

“Production, for example, in the Erode market is projected to be 65-70 per cent of last year. We hear even in Nizamabad the output is 20-25 per cent lower,” said Ankit Agarwal, Director of Erode-based Amar Agarwal Food India Pvt Ltd. 

In Erode agricultural produce marketing committee yard, the modal price (the rate at which most trades take place) of the finger variety turmeric is currently ₹11,504 a quintal compared with ₹6,384 a year ago. According to NCDEX, spot prices of polished turmeric in Nizamabad, Telangana, is ₹13,943. In the futures market, the April contract ended at ₹15,540 on Wednesday. 

Turmeric prices have topped ₹15,000 only in the futures market, said RKV Ravishankar, President, Erode Turmeric Association. “Prices have been hovering between ₹12,500 and ₹14,000 in the spot market. We are told that the crop is low this year,” he said. 

“Turmeric prices on NCDEX gained over 70 per cent in 2023. The yellow spices had hit a record high of ₹16,720 in August 2023,” Pai said. 

Opting for remunerative crops

“Prices in Maharashtra’s Sangli region are double than what it was during the same time a year ago. The crop has been 30 per cent lower than last year in Maharashtra. Prices could rise by another ₹2,000,” said Sunil Patil, Proprietor of Sangli-based Varadlaxmi Trading company. 

“The sowing of the yellow spice is reported lower in 2023-24 kharif season by 10-20 per cent in Maharashtra, 10-15 per cent in Tamil Nadu and by 18-22 per cent Telangana and Andhra Pradesh, respectively,” said Pai. 

Farmers have opted for more remunerative crops such as oilseeds and cotton, leading to lower acreage this season, he said.  

Sarma said per AgriWatch’s first advance estimates, turmeric production for 2024 is likely to be around 4.45 lakh tonnes (lt), reflecting a 15.40 per cent decrease from last year.  “Last year, it was around 5.26 lt. The current year is witnessing price support as a consequence of the reduced acreage,” he said.

May turn volatile?

The arrival of the new crop has begun in Nizamabad over the past one week, averaging between 1,200 and 1,300 bags. But they have a high moisture content of around 15-25 per cent, Sarma said.

Arrivals in Tamil Nadu will begin around the middle of this month. “Only after the new crop arrives, we can see how the demand is,” said Ravishankar.

Patil said turmeric could rule firm at least until April and then there could be volatility.

Agarwal said the spice’s prospects were bullish and prices could top ₹180-200 a kg. “We have to also account for the turmeric that farmers will be holding back for sowing again. That will lead to some more shortages. We expect turmeric production to more than double next year,” he said. 

Set to ape jeera?

“We expect prices to be volatile, moving in a range of ₹4,000 a quintal on either side after April. Once the monsoon arrives and we get a clear picture of the next crop sometime in September, prices could begin to ease,” Patil said.

For now, turmeric could ape the behaviour of cumin (jeera) when the latter’s prices more than doubled before plunging sharply now. 

According to the third advance estimates issued by the Ministry of Agriculture and Farmers’ Welfare, turmeric production in 2022-23 has been estimated at 11.69 lakh tonnes. Estimates for the current crop year to June are yet to be released.