Poor prices to hit turmeric output

Last year's poor price realisation has hit the turmeric acreage during the current year. The market estimates that the lower acreage may lead to around 15 per cent decline in the crop output this season.

The country produced around 52 lakh bags (each of 75 kg) of turmeric in 2006-07, which, according to initial market estimates, is expected to dip to 46 lakh bags this year.

According to commodity analysts, turmeric farmers in Tamil Nadu and Andhra Pradesh, the two major producers in the country, have shifted to oilseeds, maize and pulses. This has brought a straight fall of 25-30 per cent in the acreage of the crop.

Market sources said turmeric, being a nine-month crop, had lost favour among a majority of farmers and shrinking realisation gave them good enough reasons to shift to other crops. "Other crops such as maize and oilseeds are short of duration with better realisation," said a trader based in Sangli.

The crop outlook was better only in Maharashtra. Normally, the state contributed 3.5-4 lakh bags. But this year,the state's output might go up to 5 lakh bags, said Manu Shah, a Mumbai-based spices trader.

He added that the overall stock at the harvest, along with the carry-forward stock, would be around 52 lakh bags in 2007-08 against 60 lakh bags in the previous year (52 lakh bags of output in addition to 8 lakh bags of the carry-forward stock in 2006-07).

So far this year, the average turmeric prices have been range-bound between Rs 1,700 and Rs 2,200 a quintal. "This is the lowest price of turmeric. Last year, the average rates were between Rs 3,000 and Rs 3,500 a quintal," said Sharad Shah, a Sangli-based trader.

Sowing in major areas has almost been completed. The new crop is expected to hit the market by the January-end next year. Sudha Acharya, an analyst at Agriwatch Commodities, said, "The crop output is on the downside this season, but at the same time, the yield should also to be taken into consideration. The crop, so far, is in a pretty good state. If the yield betters, some deficit of the crop could be avoided."

The country consumes around 85-90 per cent of its output domestically, with the main export markets being the Gulf countries, Japan, Europe and America.

"On an average, the country exports around 45,000 tonnes (6 lakh bags) a year," said Manu Shah. He indicated that the turmeric market would turn a bit bullish by at least Rs 300-400 a quintal by the next May, adding that the market would remain weak and range-bound till then.

On the National Commodity and Derivatives Exchange (NCDEX), the contract for September delivery closed down on Thursday at Rs 2,136 a quintal against the previous close of Rs 2,158.