Kochi: Declining prices and rising stock are forcing a growing number of turmeric farmers in the southern states of Andhra Pradesh, Tamil Nadu and Kerala to shift to other crops. Prices of turmeric have dropped to Rs20-22 a kg, about 50% lower than last year’s Rs30-35.
Turmeric production in India, which accounts for nearly 90% of global produce, is expected to be lower by around 20-25% this year, according to people in the industry. In absolute terms, it may fall from around 410,000 tonnes in 2006-07 to around 300,000- 330,000 tonnes this year.
Prices of the spice crop, largely used in food additives and flavouring agents, have been heading south since 2004-05, when the country’s turmeric growers produced a bumper crop of 700,000 tonnes. Since then, farmers have been moving from turmeric to other crops.
“The prices have sharply come down. We may see a slight rise in the prices during the coming months on account of the festival season,” said R.K. Viswanathan, a leading turmeric trader and former secretary of the Erode Turmeric Merchants Association in Tamil Nadu.
Stocks of turmeric in the country on 31 March were around 90,000 tonnes; this has since increased to 165,000 tonnes, contributing to the decline in prices.
Rising stock: A wholesale market in Old Delhi. Stocks of turmeric in the country on 31 March stood at around 90,000 tonnes; this has since increased to 165,000 tonnes, contributing to the decline in prices.
Since it takes nine months to harvest a crop of turmeric, farmers in Tamil Nadu and Andhra Pradesh have shifted to the cultivation of sugar cane, maize and sunflower, which take around six months to harvest. “This gives them the advantage of using the land for cultivating two crops a year. The farmers are taking the risk as they feel that any one of the two crops may give them better prices (than turmeric),” said Viswanathan.
Mathew P., a turmeric farmer in Koothatukulam in the Ernakulam district of Kerala, has shifted to banana cultivation this season after suffering losses last year on account of declining prices of turmeric.
Faiyaz Hudani, research analyst at Kotak Commodity Services Ltd, a commodities brokerage, said domestic demand for turmeric is flagging; he expects production to be down 20-25%.
While turmeric prices have been stable in the spot market (ranging from Rs20 to Rs22 a kg), they have come under pressure in the futures market on account of low demand and swelling warehouse stocks.
Futures prices are at around Rs20-21 a kg. However, prices of the crop are expected to firm up in November.
Nalini Rao, a research analyst at Angel Commodities Broking Pvt. Ltd, another commodities brokerage, said turmeric, prices of which witnessed bearish movement in September, is expected to rise soon on account of the coming festivals.
Overseas demand, especially from West Asia, is slowly rising, too.
Indian turmeric exports were down to 22,550 tonnes (worth Rs68.44 crore) between April and August compared with 22,248 tonnes (Rs73 crore) during the corresponding period last year.
In 2006-07, India exported 51,500 tonnes (worth Rs165 crore) of turmeric. It ended the year with a market share of 14% by volume, and 4.6% by value in overall spice exports, according to statistics from the government’s trade promotion body, Spices Board.