Anticipated Surge in Turmeric Prices Amidst Production Decline and Escalating Export Demand

Will Turmeric Prices Rise?

Mintec Global
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The price of turmeric is on the brink of a significant hike by July 2024, propelled by a drastic reduction in production and a steep decrease in old stock. The impact of market movements, including the futures market, cannot be overstated in this imminent rise.

Reduction in Production and Stock

The production of turmeric has taken a staggering hit, plummeting by 45%, and the levels of old stock have nosedived by a shocking 92%. This double blow has led to a significant shrinkage in the overall availability of turmeric. A recent survey report reveals that the turmeric stocks, of the past five years, have been completely depleted. Furthermore, the newly harvested turmeric crop has been ravaged, with market arrivals at a mere 40-41% compared to the same period last year.

Old stock, which previously stood at around 2.4-2.5 million bags, has dwindled to just 0.5 million bags. Consequently, the combined availability of new and old turmeric is less than half of the consumption demand. This significant reduction in supply is expected to drive up prices.

Current Market Trends

Currently, there is no significant pressure from the new turmeric crop in any South Indian markets. The old turmeric stock from the 2022-23 period is nearly depleted, with older stocks already processed. This scarcity is reflected in the price movements in the futures market. Recently, the price of turmeric from the Erode Age ETs bundle increased moderately within four days.

Given these conditions, an additional rise is expected. The shortage of old turmeric stock for delivery in the future, coupled with the anticipated production of only 6.4-6.5 million bags. And total availability of 7.0 million bags (including old stock), is significantly lower than the domestic and export consumption of around 13.5 million bags.

The turmeric market is at the precipice of significant price increases due to a sharp decline in production and a rapid depletion of old stock. Exporters must be proactive in adapting to these market conditions. As the scarcity of supply is projected to persist, driving prices further up. Vigilantly monitoring future market trends and flexibly adjusting strategies will be paramount in capitalizing on this rare situation.