Decline in Turmeric Arrivals Boosts Market Prices

The arrival of new turmeric has begun to slow down, leading to a noticeable increase in its market prices. This year, the production of turmeric is less than the previous year. Which has also contributed to the rise in costs. There has been a significant increase in the prices of turmeric this month. Turmeric futures rising by USD 42 over the last 12-15 days.

Reduced Supply Drives Price Increase

The drop in arrivals has been a key factor in the price rise of turmeric. Commodity expert Indrajit Paul noted that around 18,900 tonnes of turmeric have arrived so far this month. This is about 70 percent less compared to the same period last year. Last month saw approximately 54,000 tonnes of turmeric entering the market. Which was indicating a sharp decrease in this month's arrivals as well.

Production Trends and Forecast

The lower production rates are further pushing prices upwards. According to the Commodity and Currency Head at HDFC Securities, the reduced supply is the primary driver behind the rising turmeric prices. Industry estimates suggest that turmeric production may drop to between 50 to 55 million bags this year, significantly lower than last year's output of 80 to 85 million bags (60 kg each).

Future Price Movements

Paul mentioned that the strong fundamentals due to low production will likely keep turmeric prices on an upward trajectory. Once the futures price of turmeric surpasses USD 2,36 per kg, it might climb as high as USD 2,64 per kg. Despite the recent bullish trend, prices might temporarily dip due to profit booking, but they are expected to remain high in the long term.

The market dynamics indicate that turmeric prices are set to remain elevated. With reduced arrivals and lower production impacting the supply side, the commodity is poised to maintain its upward price momentum, reinforcing a bullish outlook for turmeric in the foreseeable future.