Mumbai: Indian turmeric prices are set to fall further in both spot and future markets due to a bumper crop and less demand in the market, traders said.
“The demand is lower and warehouses are left with little space due to the oversupply of the crop,” said a trader based in Nizamabad, in the southern state of Andhra Pradesh.
An official with National Commodity and Derivatives Exchange Ltd. (NCDEX) said about 1,491 tonnes of turmeric are stored in the warehouse at Nizamabad, and it is not accepting any more stock.
On 4 May, the May contract on NCDEX fell Rs8 to Rs2,135 per 100 kg, down more than 4% since last month.
In the Nizamabad spot market, prices fell by Rs70 to Rs2,070 per 100 kg in the same period.
“May contracts are likely to touch Rs2,080-2,100 as higher-than-expected arrivals have come,” said Vinayak N.V., an analyst at Karvy Comtrade Ltd.
Arrivals will continue till the end of this month and prices are likely to fall to around Rs1,900 on lack of buying support, a Sangli-based trader said.
India’s average annual production is around 700,000 tonnes but this year traders are expecting an increase in output. “This year we are expecting more-than-average production. But we can’t say how much will it be,” said a senior Spices Board official.
In 2004-05 India harvested 718,210 tonnes of turmeric, according to latest data provided by the Spices Board. The official figures for the current year were not available.
India, which is the world’s largest producer of turmeric, exported 46,250 tonnes in 2006-07 (April-February). It exports the spice to Iran, US, UAE, Japan, and UK among others.
Turmeric arrivals begin from February and continue till May.
Major producing states are Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Maharastra.