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Informist, Friday, Apr. 4, 2025

 

By Taniva Singha Roy

 

MUMBAI – After hitting upper circuits on the National Commodity and Derivatives Exchange over the past few days, the upward movement in the prices of turmeric is likely to continue in anticipation of a fall in output and lower arrivals, market participants said. The prices had hit the upper circuits over the past few days due to firm domestic and export demand amid low arrivals. 

 

Turmeric arrivals in the domestic market was significantly lower in March, even though this was time for peak arrivals, said an analyst at Kotak Securities. All India arrivals in March was at 38,409.18 tonnes, marking a 26?cline from 51,910 tonnes in March 2024. "Whatever limited crops are arriving, it is going directly for exports as there is firm export demand and traders will get a better price from overseas," he said.

 

In March, prices rose over 39%, bouncing from a 20-month low of INR 11,138 per 100 kg to INR 15,500. According to the latest data, India's turmeric export jumped 47% on year to 15,310 tonnes in December. Total export reached up to 137,000 tonnes during Apr-Dec, up by 13% on year, which contributed to the uptick in prices, analysts said. Exports picked up in the second half of 2024, reaching a four-year high, surpassing 2020's volume of 175,000 tonnes.

 

The late onset of monsoon and patchy rainfall during October to December caused a lot of damage to the crop, the analyst said. By now, new crops should have arrived but due to lower output there is very less availability.

 

Turmeric futures on the NCDEX have exhibited strong bullish momentum amid constrained supply and renewed buying by fast moving consumer goods companies. Despite a 10% rise in the sown area at 330,000 hectares, untimely rains have limited output growth. Slow rhizome growth and low yield estimates also supported prices. With higher demand during wedding season, rising needs from pharmaceutical sector, and stock-depleted pipelines, domestic fundamentals remain robust, said Amit Gupta, an analyst at Kedia Advisory.

 

The turmeric production for 2023-24 (Apr-Mar) was at 1.01 million tonnes and for 2024-25 is estimated at 1.04 million tonnes. Nanded region, a prominent growing area, could see a 10-15?cline in productivity, according to Ajay Kedia, analyst at Kedia Advisory.

 

In the markets of Nizamabad, another major market area, almost 80% of arrivals have already come in and there is hardly any arrivals at the moment, said Amrutlal Kataria, a trader from Hyderabad.

 

There is demand in the futures market as well, which is why prices in the NCDEX are rising, but there is not enough quality stock for delivery, said Kataria. Analysts are bullish about turmeric in the coming year as carry-forward stocks are also low amid lower production. Carry-over stocks from 2024 were at a record low at 2.5 million bags due to last year's short crop. In the near term, prices at major trading centres are likely to increase as arrivals decline, with farmers expected to hold on to stocks in anticipation of an increase in prices.

 

In Apr-Dec, turmeric exports rose 13% on year to 137,000 tonnes, according to data from Spices Board of India. The US was the largest importer of turmeric from India, with an import value of $364 million. Followed by Bangladesh and the UAE. 

 

However, in the long term, analysts are bearish as concern about exports due to a firmer rupee and geopolitical tensions could weigh on prices, according to SMC Global Securities. Technically, a breakout above INR 15,300 per 100 kg may lead to a test of INR 16,540 per 100 kg, and fresh buying near INR 14,000-14,200 per 100 kg with tight stops at INR 13,400 per 100 kg, a technical analyst said.  End

 

Edited by Akul Nishant Akhoury

 

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