Mumbai, July 26 Turmeric prices in the major mandis in Nizamabad and Erode are set to rise further till September on good demand in both domestic and international markets. Spot prices have gone up by Rs 500-6,000 a quintal in the last one month.
Arrivals in the Erode markets have improved from 4,000 bags (of 70-75 kg) to 9,000 bags a day.
Turmeric inventory with the stockists and farmers wasabout 13-14 lakh bags on lower production last year.
Carryover stocks for 2009 were at 5 lakh bags, down 58 per cent from last year’s 1.2 million bags, due to lower output in 2008, said a trader. Stocks are expected to remain low till the fresh crop arrives in January.
Turmeric futures in NCDEX made a low of Rs 5,572 a quintal on Monday and surged to close at Rs 5,824 a quintal on Friday on expectations that inadequate rains may hit output.
Farmers have earned good profits this time around and are not ready to sell turmeric even if profit booking was seen in the futures, said Ms Nalini Rao, Research Analyst, Angel Commodities.
Monsoon dependant
Turmeric being a rainfed crop, the output is largely dependent on monsoon in Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra. Except for Karnataka, none of the other States has received adequate rains till the first week of July.
Turmeric sowing commences in the last week of May and lack of monsoon rains in June may have adverse impact on the yield.
Production of turmeric was estimated at about 55 lakh bags against 42 lakh bags in 2009.
In the last two years, turmeric output has been on thedecline as farmers have shifted to more remunerative crops such as chilli and cotton, especially in Andhra Pradesh, which is known as the turmeric bowl.
According to the Spices Board, turmeric exports in April and May were at 10,500 tonnes against 9,010 tonnes logged in the same period last year.
Exports looking up
The country exported 52,500 tonnes valued at Rs 249 crore in the financial year 2009-10 against 49,250 tonnes valued at Rs 157 crore in the same period last year. Demand from the overseas markets has been good and may remain strong in the coming months, said an analyst.
India exports less than 10 per cent of the total output and is the largest consumer of turmeric in the world. Though other producing countries such as China and Myanmar export most of their output, India continues to be the largest exporter due to higher production levels.
In the long term (from October), prices may depend on the demand from the overseas and domestic markets besides progress of sowing in the Nizamabad and Erode and inventory levels with the stockists and farmers.
Source : Business Line