Good News! Turmeric Farmers Likely to get Good Returns in coming months

Turmeric markets have shown price appreciation of more than 10% over last month. As the unlocking of nation’s economy started, household consumption picked up and similar trend was noticed in medicinal industry as well as exports. This means that local as well as overseas demand for turmeric have started improving lately. Thanks to the efforts of the Aayush Ministry and traditional knowledge about spices being a strong immunity builder, especially turmeric, number of Indians preferring increased consumption of turmeric has risen in last few months.

All these factors have favored trade opportunities in turmeric, leading to better price realizations by farmers, stockists or retailers in recent months. Out of the estimated total production of 938,955 tonnes in 2019-20, annual exports till December 2019 stood at 101,500 tonnes as per trade sources. India is the world's largest supplier of turmeric contributing nearly 70-75% of global production.

DOMESTIC/EXPORT DEMAND IMPROVES:

As the perception of turmeric being an immunity-boosting product increases, domestic and export demand has started improving. According to Mr. U Karthik, general secretary at Federation of India Spices Stakeholders, “Right after the COVID outbreak, turmeric sales was continuously increasing and overall in 2020-21, we are expecting the sales to go up by 25% to 30%”.Prices in recent weeks have appreciated by roughly 5-6% to Rs.60-62 a Kg, with export orders from the Middle East, the US, Europe and Southeast Asia.

Few exporters affirmed that overseas purchases have been increasing for Indian turmeric since April in retail chains in the UK, Germany and Holland. In fact the entire spices basket has fetched good returns for the country in June. India's spices exports in the month of June has registered a growth of 23 per cent to USD 359 million (around Rs 2,690 crore) as against USD 292 million (Rs 2,190 crore) last year same month.

Strengthening dollar versus the rupee was an added advantage due to which Indian exporters benefitted by earned the extra dollars per sale. India every exports spices like pepper, cardamom, ginger, turmeric, coriander, cumin, celery, fennel, fenugreek, nutmeg, spice oils and mint products. India leads in spices exports and major consumers of Indian spices are the US, UK, Germany, France, Italy, Canada, Australia, UAE, Iran, Singapore, China and Bangladesh. Exporters in last few months have signed new contracts, for supplying to destinations of Dubai, Malaysia, Iran, US and Europe. Even Bangladesh was demanding turmeric in good quantity, in the month of July.  “The rupee weakness is also helping the spice exports.

NEAR TERM OUTLOOK POSITIVE, FARMERS LIKELY TO FETCH GOOD RETURNS:

Sowing prospects have reduced as markets had moved in a moderate price band of Rs. 50-70/kg since last 3 years. There are reports of farmers likely to shift some of the turmeric cultivated areas towards planting of soybean/maize/cotton etc. Exports demand has revised and so is the domestic demand situation. Rupee weakness is another factor that can support export deals in coming months. Festive season has started and will continue for another 3 months. Spices importance as immunity boosters to avoid infection is growing therefore demand prospects have improved significantly for remaining part of the year.

The spice processing factories are gradually resuming the operations as the lockdown restrictions are being lifted. There is a 3% rebate under the merchandise export incentive scheme, which has helped the exporters to increase their sales to the overseas. The guidelines issued by the ministry of Ayush regarding numerous health benefits is another factor is scaling up consumption of turmeric in juices and immunity booting drinks in the domestic market. All in all, growing demand prospects – export as well as domestic, ongoing festive season, cheaper prices and lower sowing possibilities shall keep price outlook positive for coming months. Most of the previous season’s inventory is with the farmers.

Therefore unlike last few years, farmers of turmeric are expected to fetch decent returns if they continue holding for another 2-3 months. As per traders, stockists and exporters, prices may rise further from current level of Rs.60/kg to Rs.68-69/kg in next 2-3 months.