Turmeric prices have topped Rs9,000 per quintal in private markets in Erode and are at Rs8,700 in Nizamabad. The sharp rise in turmeric prices are due to fears of crop damage in the Nizamabad region of Telangana and also Maharashtra.
According to the Ministry of Agriculture and Farmers’ Welfare data, turmeric prices increased to Rs8,294 a quintal for the finger variety on February 27 at Erode in Tamil Nadu as against Rs6,250 on February 2. Prices of the bulb variety increased to Rs7,649 from Rs5,994 during the same period.
The crop is feared to be 20-25 per cent lower in the Nizamabad region as unseasonal rains hit the growing regions last year. In Maharashtra, the market participants claim that the crop is 10-40 per cent lower On the demand side, there had been good demand from Bangladesh and Gulf destinations.
Initially, turmeric futures April contract is expected to witness some minor correction as in the present scenario, export prospects of turmeric have been affected following a steady rise in its prices since the beginning of this month across various primary agricultural markets in the country. However, as there is shortage on the supply side and demand is higher, it shall take support near Rs7,900/quintal. Bargain buying shall again fuel the rally towards Rs9,000.
The mandis are flooded with farmers from across Tamil Nadu and Karnataka as they want to sell their produce at the current market price.
Considering the high demand, cultivators hope that this price would continue for a few more months. The source of the bullishness is firstly, the area under cultivation has been reduced by half. Secondly, there’s a huge demand for Erode turmeric from Bangladesh, Singapore, Malaysia, US, UK and the Gulf countries. Erode-based merchants are transporting to Nizamabad in Telangana, from where it is being forwarded to Bangladesh on Kisan Rail.
Jeera futures (March contract) is waiting to surpass the 200-day moving average of Rs13,800 per quintal, after which we can see higher levels of Rs14,000-14400/quintal. The near term support is around Rs13,200/quinal. On the supply side, compared to last year, cumin production in the country is likely to remain 10 to 15 per cent lower. Last year, cumin production was around 92 lakh bags (55 kg per bag) in India. This season, it would be around 85 to 90 lakh bags due to early exit of winter in the cumin-growing areas of Gujarat.
As per data from the state agriculture department, cumin sowing in Gujarat has gone down to 4.69 lakh hectares from last season’s 4.88 lakh hectares. On the spot, the demand for Holi and Ramadan are keenly watched and the market awaits better quality spice with lower moisture content.
It is reported that some forward bookings have started to take place in anticipation of reduction in moisture content of the new arrivals, amid rising temperature in the producing regions. Traders reveal that the new arrivals currently have a moisture content of over 12 per cent, which is likely to reduce in a fortnight’s time. It is being estimated that cumin exports from India are likely to cross 2 lakh tonne by the end of the current season, in the next couple of months.
The trend of dhaniya futures (Apr) is bullish and can see Rs8,000-8,500 per quintal, taking support near Rs7,000-6,800 levels in days to come. Local spice millers are active in Rajasthan mandis aiding price gains in Black, Eagle, Badami and Scooter variety. Spice millers from UP, Delhi, Maharashtra, Karnataka and Tamil Nadu have been the active buyers at Rajasthan mandis.
At Ramganj mandi, new coriander was quoted between Rs4,300-4,500/quintal on the lower side and Rs5,850-6,000/quintal on the higher side. Exporters crowded the mandis of Ramganj and Kota mandis. New crop supplies reported moisture content of 8-11 per cent. Rising temperature and clear skies are helping lower the moisture content in coriander. Reduced moisture content is attracting exporters exceedingly. Most of the mandis are experiencing robust buying interest due to which demand beat arrivals in the markets.
- The writer is a senior research analyst (agri commodities) at SMC Global Securities Ltd