iGrain India - Reduction in Turmeric Production Forecasts
Recent reports from New Delhi highlight concerns regarding damage to turmeric crops, particularly due to rot in Maharashtra, one of the key producing states. As a result, forecasts for turmeric production are now being adjusted downward. Although the area under cultivation was significantly larger this season compared to last year, crop damage in areas such as Andhra Pradesh, Tamil Nadu (NSE:TNNP), and Maharashtra, except for the Nizamabad line, has led to reduced production expectations.
Originally, experts had expected production of around 85 to 90 lakh bags. However, due to the affected crops, the estimate has been revised down to 70 to 75 lakh bags.
Price Trends in Spot and Futures Markets
Despite the reduced production forecast, prices for turmeric in the spot markets have remained stable at previous levels due to lower buying activity, likely due to the ongoing arrival of the new crop. In the futures market, turmeric prices have seen modest increases. For instance, April contracts opened at Rs. 13,190 and closed at Rs. 13,490 by the weekend. May contracts similarly rose, closing at Rs. 13,442 after opening at Rs. 13,022.
New Crop Arrival and Moisture Content
The arrival of new turmeric in Nizamabad Mandi has been steadily increasing, with 12,000 to 15,000 bags arriving daily, having a moisture content of 8-10%. As the season progresses, the arrival of dry goods is expected to rise, with shipments from other producing states anticipated around the end of February or early March.
Production Estimates by Region
Trade sources suggest that this year’s turmeric production will be distributed as follows:
- Marathwada region (Basmat, Hingoli, Nanded): 30-32 lakh bags
- Sangli region: 9-10 lakh bags
- Nizamabad region: 13-15 lakh bags
- Warangal region: 1-1.5 lakh bags
- Duggirala and Kadapa lines: 2-2.5 lakh bags
- Erode and Salem lines: 10-11 lakh bags
- Other areas: 4-5 lakh bags
Total Availability and Market Dynamics
With an estimated 15-18 lakh bags in outstanding stock, the total turmeric availability this season is expected to be around 85-90 lakh bags. However, demand from both domestic markets and exports is expected to require 1-1.10 crore bags. Consequently, turmeric prices are likely to remain elevated throughout 2025. A gradual increase in prices is expected as the arrival of new goods slows down, and stockists begin purchasing as dry goods enter the market.
Limited Price Movement Expected
Experts believe that the market will likely remain in a narrow price range for the near term, given the ongoing increase in new crop arrivals. A slight drop of 3-5 rupees per kg could occur if supply pressure builds, but a significant decline is not expected due to the limited availability of stock. Once dry goods begin to arrive in full, stockists are anticipated to step in and support prices.
Export Growth
On a positive note, turmeric exports have surged, with a 10% increase in volume. Revenue from exports has seen an even more significant rise, up 68%. According to data from the Spices Board, from April-November 2024, turmeric exports generated Rs. 1,984.46 crores from 12,160.21 tonnes, compared to Rs. 1,178.42 crores from 10,745.34 tonnes during the same period in 2023. This robust export growth indicates strong global demand for Indian turmeric.