Production Declines and Market Dynamics Keep Prices Robust

Last month, the futures price of turmeric softened slightly after reaching a new record high. The golden-colored spice is expected to stay high in the coming months. A decrease in production has led to reduced arrivals in major markets. Meanwhile, domestic and export demand remains strong. Some enthusiastic analysts predict that the futures price of turmeric could reach a new record level of $2,76 per KG. The spot market price might also approach $2,40 per KG by July.

Farmers Hold Stock, Anticipating Further Price Increases

Currently, the spot market price of turmeric is around $2,04-21,6 per Kg, which is 30-35 percent higher than the $1,44 per kg seen in January-February. Farmers are holding onto their turmeric stock, hoping for further price increases. This has resulted in no supply pressure in the markets. The sowing area for turmeric significantly declined during the 2023-24 season, which may keep prices high despite weak demand. As long as producers do not quickly release their stocks to the market, the bullish environment in prices may persist.

Monitoring Sowing Conditions and Anticipating Monsoon Impact

Demand from January to April has already been met, with expectations for increased demand from May to July. Prices softened slightly due to profit booking. An Erode trader mentions that turmeric prices may remain stable in May and June, with possible fluctuations of around $0,06 per kg. It is crucial to monitor this year's sowing situation while anticipating good monsoon rains. According to an analyst firm, domestic turmeric production is expected to decline by 16 percent to 9.70 million tonnes this year compared to last year. Limited arrivals in producing markets support the high price environment.

Overall, the turmeric market is experiencing elevated prices due to reduced production and strong demand. Farmers and traders are closely watching market trends and weather conditions, which will significantly influence future price movements.