High turmeric prices have given hope to recover its lost acreage
Turmeric prices have made a seven-year high price. But Indian farmers were not benefited from high prices, and that was the reason they are taking less interest in turmeric cultivation. Gradually, the mindset of farmers has changed and they are likely to be lured by the turmeric 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 come after initial projections pointed to a nearly 20% fall in cultivating land.
Why has the price reached a new high of seven years?
The first and foremost reason is unexpected rainfall. In the months of March & April, standing turmeric crops were damaged during the unseasonal rains. Secondly, there is deficient rainfall in the state of Karnataka. Turmeric coverage is 30% lower in Karnataka. The cultivation of any crop is dependent on the rainfall. Whether it’s excess or deficient, in both conditions it will affect the total outcome of crops.
There was regular rain for 8 – 10 days, resulting in high moisture in the crops which didn’t allow time to dry it. Due to this, approximately 35k to 40k Metric Tonne crops were damaged in the state of Maharashtra. Ankit Agarwal said that “Rains resulted in a huge crop loss in the Marathwada region. The quality took a hit as the crop turned red”. Ankit Agarwal is the Director of Amar Agarwal Foods India Pvt Ltd. (Maharashtra)
Turmeric demand is increasing for exports, farmers are showing interest
As per Geojit Commodity, turmeric exports have increased by 11% in the financial year 2022-23. Total exports were about 0.17 Metric Tonnes. Demand for export has increased while there is some movement in the domestic market too. It is expected that turmeric will likely be bullish over the next few months.
Ankit Agarwal further added that “Over 90% of the farmers in western parts of Tamil Nadu are showing interest to sow turmeric, the loss could be set right by 5 – 10% and the acreage could be around 90% of last season’s coverage.”
Let’s understand this with an example. Tamil Nadu produces 1.3 to 1.4 Million bags (of 50 kg) annually. In view of the price surge, it could produce 1.25 /1.3 Million bags.
Turmeric spot price is less
On the NCDEX board (National Commodity and Derivatives Exchange Limited) turmeric August contracts closed at USD 1,19 per kg and October futures contracts were at USD 1,25 per kg. While in the spot market turmeric price closed at USD 1,08 per kg at Nizamabad, Delhi last Tuesday.
Geojit Commodity mentioned that turmeric prices rising above USD 126 may improve sentiments. Wednesday’s trading on NCDEX may provide clues on the direction of the spice’s prices.