Turmeric Report 2010-2011

1 Commodities Research JRG Wealth Management Ltd.

Turmeric

Turmeric Seasonal Report 2010-2011

Date : 13 Dec 2010

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Turmeric

Turmeric known as ‘Indian Saffron’ is originated from Southeast Asia. Turmeric

is used as an important ingredient in Indian foods and the root of turmeric plant

is used to prepare yellow spice. The botanical name of turmeric is Curcuma

Longa and belongs to Zingiberaceae family. Erode a city in Tamil Nadu, is the

world's largest producer and an important spot market of turmeric in Asia.

Popular varieties of turmeric are China scented, Thodopuza, Red streaked,

Alleppey, etc.

Seasonality

Turmeric is a kharif crop and requires temperatures between 20°C and 30°C and

an annual rainfall of 1500 mm or more. The main sowing season begins from

June and extends up to August. It is harvested from January and ends by

March. Arrivals start during February-April period.

Indian Scenario

India is the world’s largest producer and supplier of turmeric. The other major

producers are Bangladesh, Pakistan, China, Indonesia, Myanmar, Taiwan and

Burma. Global production of turmeric is estimated around 10 lakh tonnes. And

India leads the turmeric market and contributes 80 percent to the world

production. The major consumers are India, Japan, Srilanka and other African

countries.

Source: Spices Board of India


Turmeric


The southern states like Andhra Pradesh, Tamil Nadu, Karnataka and the

eastern state Orissa are the key producers. In the year 2006-07 Andhra Pradesh

was the major producers and has highest share of 36 percent of overall area. And

in the year 2010-2011 the production is likely to increase as the farmers are

expected to have increased the area under turmeric cultivation by 25 percent

from previous year to take advantage of higher prices. As per market estimate

around 70 lakh bags would be the next year’s production in national level

against a normal 45-50 lakh bags.

Import and Export of Turmeric

Based on price difference in domestic and international market the country

imports turmeric for it value addition requirements. In the year 2008-2009 the

country imported 2,525 tonnes of turmeric, less since 2005-2006. And India is

the largest exporter of turmeric and exports important varieties like Allepey

Finger, Rajapuri, Erode variety, etc.


Turmeric


Export of turmeric in 2008-09 was an all-time high both in volume and

value. The country shipped out 52,500 tonnes of turmeric valued at Rs 248.58

crore against 49,250 tonnes valued at Rs 157 crore in 2007-08. In April-

September, 2010-2011 the country’s total spices exports rose 8 percent to 2.73



Turmeric

lakh metric tonnes compared to same period in 2009-2010. Turmeric export

during April-September were 25,750 tonnes, down from 30,275 tonnes in 2009-

2010. Increased demand from overseas market has pushed up exports on

turmeric in April-September. During April-October, 2010-2011 the country’s

total spices exports grew 6 percent to 3.17 lakh metric tonnes. However, India’s

export of turmeric in April-October declined 14 percent to 29,500 metric tonnes

compared to same period in 2009-2010. In October 2010-2011 the turmeric

export was 3,500 tonnes, down compared to 3,975 tonnes same period in 2009-

2010. The major importers of turmeric from India are United Arab Emirates,

Japan, Sri Lanka, Bangladesh, etc.

Price Analysis

The price of turmeric in India had witnessed a sharp increase for the past few

seasons. From the year 2008-09 there was an upward movement in the price

trend. On 18 October 2008 the futures price of turmeric was Rs.3528 and in 19

October 2010 it hovered to Rs.15498. The spot price also witnessed a sharp

increase. In November 2008 the price was at a range of Rs.3750-3850 and in

November 2010 it touched around Rs.16000.

Spot and Futures price movement of Turmeric

Source: NCDEX


Turmeric

Limited carry over stocks and strong demand from domestic and overseas

market helped the market to gain in the year 2010-2011. Increase of turmeric

price in the futures market favored the farmers to a great extent. The price is

expected to decline by the end of the year 2010 onwards, as the farmers had

increased their area of turmeric cultivation. And it is estimated that the

production will increase to 70 lakh bags against 45-50 lakh bags of normal

production.

Current scenario

As per market sources, production of turmeric is likely to touch 70 lakh bags n

2010-2011 compared to 45 lakh bags in last year. However, there are concerns of

quality loss to the crop due to excessive rains in Nizamabad region. Fresh crop

arrivals are likely to start from Mar-April in Andhra Pradesh.

Price outlook for 2010-2011

Market is likely to remain stable in medium term as new crop arrivals start only

after four months. The April and May NCDEX contracts are trading near Rs 9000

per quintal are likely to remain in the range of Rs8000-10000 for next couple of

months. However, long term trend remain bullish due to negligible stocks in the

spot markets and sustaining demand from export market. Farmers may hold

back if prices fall substantially as they received better prices for last two years. In

the long term, prices are likely to move up towards Rs12000 per quintal, which

may come by June 2011.

Turmeric Report 2010-2011

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