Turmeric’s Price Surge in Tamil Nadu
The turmeric market is experiencing a significant upturn, particularly in the Erode district of Tamil Nadu, where prices have hit an astounding $2,56 per kg, marking a 200% increase. The sudden spike has left many questioning the extraordinary value being placed on this typically humble, yellow spice. From an initial auction price of $1,80 per kg at the season’s start in February, prices swiftly escalated to $2,52 per kg, sparking expectations of further increases.
Factors Affecting Supply and Prices
According to the Erode Turmeric Traders and Warehouse Owners Association, fresh turmeric arrivals from Karnataka, Erode, and surrounding districts have been notably scant in March. This scarcity has been attributed to potential severe drought conditions impacting this year’s cultivation, resulting in reduced turmeric availability nationwide. These supply shortages, coupled with farming difficulties, have propelled turmeric prices to unprecedented levels. Despite global market dynamics, India continues to lead the international turmeric trade, significantly influencing market trends. The current surge reflects a substantial 205% increase from last year’s low of $77.42 in April.
Impact of Weather and Farming Challenges
This year, turmeric production has suffered a decline of 30 to 35%, largely due to unfavorable weather conditions. The major production areas, including Dharmapuri in Karnataka and parts of Erode district, have reported lower than expected yields. Nationally, land used for turmeric cultivation has decreased by over 30%, further contributing to a decline in per hectare yield and overall production forecasts.
Market Dynamics Post-COVID and Global Influence
Post-COVID, the increase in Indian turmeric prices has led to reduced demand from key importing countries, although India still accounts for 80% of global turmeric production. Competing turmeric-producing countries are offering their produce at lower prices, affecting the market. However, the anticipated reduction in supply, combined with rising export demand and concerns over the new crop’s quality, is expected to support high turmeric prices. Delays in harvesting and decreased yields are additional factors driving price increases.
Supply and Demand Forecasts
For the 2023-24 season, India’s total turmeric supply is estimated at 9.44 million bags, a decrease of 6 million bags from previous levels. Nevertheless, consumption is on the rise, and with exports increasing, demand is likely to surpass supply, potentially leading to stock shortages. Price projections for the season suggest a fluctuating pattern, with current levels exceeding $2,28. As the season progresses from April to June, prices could stabilize between $2,60.40 and $3,00, although a slight decrease is anticipated in July. Prices are expected to adjust downwards in August due to factors such as the arrival of new crops and changes in consumer behavior.