Factors affecting turmeric prices
The anticipated surge in the international price of turmeric, commonly known as Haldi in India, is expected to reach a substantial increment of USD 0,244 per kg due to a noticeable reduction in production and a surge in export demand. Adverse weather conditions have triggered a decline in turmeric cultivation across all regions, resulting in a supply shortage.
Production might be half for the current year
Farmers cultivating turmeric in South India have been grappling with diminishing yields as the production of this spice continues to dwindle. It is estimated that the overall production for this year will merely reach 5.5 to 5.6 million bags, while domestic consumption remains at 10.1 million bags, with an additional 1.5 million bags being exported to neighboring countries.
Traders mindset
In recent times, turmeric traders have encountered significant losses, compelling many to offload their stocks. The inflated prices of turmeric have dissuaded potential buyers, leading to reduced cultivation efforts and diminished arrivals in crucial turmeric-growing regions such as Erode, Warangal, Cuddapah, Duggirala, Nizamabad, Sangli, and Idukki.
As per the latest market rates, the average Turmeric price in Andhra Pradesh is USD 0,845 per kg. The lowest market price is USD 0,659 per kg. The costliest market price is 0,90 per kg. The scarcity in supply, coupled with heightened demand from both domestic and international markets, has fueled the surge in prices.
Accusation by companies
Prominent companies have commenced procurement of turmeric for grinding and packaging purposes, further amplifying the price surge. It is projected that turmeric prices may experience a hike of at least USD 0,3 per kg in July, potentially even reaching a long-term increase of USD 0,60 per kg.
Traders are poised to reap significant profits from these price hikes, with expectations of attaining 1.5 to 2 times the usual profit margins this year. However, the supply shortage and soaring prices may pose challenges for consumers and industries heavily reliant on turmeric as a pivotal ingredient.
In conclusion, the dwindling turmeric production, coupled with escalating export demand and adverse weather conditions, has triggered a notable price surge in the turmeric market. Traders stand to benefit from the expected price hikes, while consumers may encounter difficulties in accessing turmeric at affordable prices.