Turmeric Outlook for This Season: Advise for Traders and Farmers

Turmeric prices in recent weeks have undergone a decent correction. Sharp appreciation in price levels during the last week of February prompted traders and retail investors to book profit from their purchased positions. Sentiments are soft after the Central government clarified that a turmeric board would not be set up in Nizamabad as the existing spices board was already handling 50 spices including turmeric. 

Year 2020 has been reasonably well for the entire turmeric value chain including the farmers. Domestic consumption has improved significantly after the Covid outbreak, mainly because of the efforts of the Aayush Ministry and influence of the traditional knowledge about spices being a strong immunity builder, especially turmeric, which is being consumed by a large number of Indians since the second quarter of 2020. Increase in export sales and rise in the domestic use of turmeric as an immunity builder are amongst the major positive price drivers. Turmeric prices had appreciated by 15-16 percent by end of December 2020, when compared with average prices prevailing during May 2020.  Turmeric had crossed above 9000 level after so many years in fact. 

As the peak arrival season approaches, prices are seen under pressure. But market talks indicate that from current offers there may not be any significant depreciation in the price levels. This is due to production shortage and an overall tightening inventory situation. Mandi prices have appreciated by more than 50 percent in 2021 as crop was estimated 20-25 per cent lower in the Nizamabad region, where unseasonal rains had affected the crop growth last year. The latest data from the Ministry of Agriculture puts turmeric production at 9.46 lakh tonnes for the 2019-20 season (July-June), compared with 9.61 lakh tonnes the previous year.  

According to data by the Spices Board, turmeric exports during the April-September period of the current fiscal stood at 99,000 tonnes compared with 69,500 tonnes during the same period a year ago with the value of the shipments rising 35 per cent. The increase in consumption of turmeric as an antioxidant is said to be one of the factors that contributing to the considerable increase in exports as well as prices. The Indian Embassy to Cambodia has stated recently that it will focus on increasing imports of pepper and turmeric from Cambodia. A meeting in this context was fruitful in its discussion of how to boost exports of Cambodian agricultural products to India.  Export prospects of turmeric therefore remain bright for this marketing season.  

The concept of immunity booster is very much influential these days not only in India but across the globe and turmeric is a natural immunity booster. We often hear of turmeric milk being sold in big stores and retail outlets. The government and Ayurveda practitioners recommend consuming some amount of turmeric daily for better post-COVID management. Because of the Covid-19, turmeric consumption has improved by nearly five lakh bags each in domestic and overseas markets. As a result, the inventories were absorbed rapidly, and at present India is reportedly having note more than 14-15 lakh bags of old stocks. All in all, domestic as well as overseas demand outlook remains better for this marketing season, which can result in further growth of trade volumes across the physical business centres of the country. Currently the rates are fair enough for the farmers to sell in the mandis.

However as the price view for next 4-5 months are positive, it is advisable for the farmers to sell 25-30 percent of their produce between April and May. Some of the remaining quantity can be sold between August and September and rest can be offered for sale during later part of the year. For traders and stockists, it will be a wise decision to wait for cheaper price levels during the peak arrival period i.e. between next 4-6 weeks. One should then hold and sell around 40-50 percent of their quantity during the third quarter of this year. Remaining quantity can be sold at intervals between last quarter of 2021 and early part of 2022.