The year 2021 has been reasonably well for the entire turmeric value chain including the farmers. An increase in export sales and a rise in the domestic use of turmeric as an immunity booster is amongst the major positive price drivers.
Turmeric prices had appreciated by approximately 62 percent year on year, when compared with average prices prevailing during December 2020.
Turmeric was strong during the first quarter of 2021, as export and domestic consumption improved significantly. This is because, after the corona pandemic, the need to develop one’s immune system had turned all the more important. Prices reversed the gain April 2021 onwards, as the new season supply pressure increased. The downward journey was observed till October 2021. The price direction turned positive from November onwards, and has been unchanged till date.
As the supply season is still far away, trades are getting materialized without necessary bargains by the buyers, and this keeps the market supported. Reports of crop damage in the major producing regions of Maharashtra and South have added to the bullish tone. There are expectations of a 20-25 percent fall from the previous year’s production. Erratic rains during the growth period have affected the yield adversely.
The Covid-19 threat is not completely over yet therefore there will always be a need to maintain a strong immune system. This would be influential in keeping the consumption prospects better for this year as well. The participants shall continue factoring in the lower production outlook and till now there are estimations of a 20-25 percent fall in the production year on year. The new season supplies of turmeric usually begin March/April onwards. Till then there will be no supply pressure. The current level of demand and stocks indicates that as long as new season supplies are not arriving, the inventory will continue depleting. Therefore prices are expected to maintain the upward trend for next 3-4 months as well.
Exports are estimated between 1.3-1.5 lakh bags, and this quantity is usually exported by India annually. Year 2021 was an exception when due to cheaper prices and emerging ideas of immunity booster, the exports had jumped to about 1.8 lakh bags.
Except for a temporary correction during the second quarter of 2022 (Considering the new season supply availability), the primary direction is likely to remain upwards. Market talks convey that the price appreciation can be nearly 20-25 per cent even from the prevailing offers (Nizamabad rates of the farmer polished grades are around Rs.9500/qtl), which are already up approximately 74 percent over December 2020 closing price levels. So it will be another good year for the turmeric farmers in generating handsome returns, from their production cost.
