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Turmeric prices, which have dropped over 20% since peaking in May 2024, are expected to rebound during the upcoming festive season due to tight supplies and increased demand. Current prices are stable, with futures trading at Rs.16,400 per quintal on the NCDEX and spot prices at Rs.16,160 in Nizamabad. Limited stocks, estimated at around 50 lakh bags nationwide, could lead to a price rally, especially with the next crop still six months away. Lower ending stocks and a reduced stock-to-use ratio in 2024 will further support prices. Although turmeric acreage has increased by 20-25% across India, particularly in Maharashtra, challenges such as high seed costs and limited quality planting materials have dampened expectations. The final output will largely depend on monsoon performance in key growing regions, making the upcoming months crucial for determining market trends.

Highlights

Turmeric prices have dropped over 20% since their peak in May 2024.

Low stocks and upcoming festival demand may trigger a price rally.

Current turmeric prices are stable, with spot prices at Rs.16,161 in Nizamabad.

Higher turmeric acreage in 2024, but quality seed shortage could affect output.

Export demand expected to rise next year as turmeric stocks tighten.

After peaking at an all-time high of Rs.20,430 per quintal in May 2024, turmeric prices have seen a significant decline, dropping over 20%. Currently, October futures on the NCDEX are trading at Rs.16,400 per quintal, while spot prices in Nizamabad stand at Rs.16,160. This downturn in prices is primarily due to a combination of demand contraction and favorable weather conditions that stabilized the market.

Despite the recent decline, the upcoming festive season is likely to provide a much-needed boost to turmeric prices. A potential rally in expected as stakeholders hold limited stocks, with only around 50 lakh bags (55 kg each) available nationwide. The tight supply situation could lead to a price surge, especially with the next crop still six months away from hitting the market.

Lower ending stocks in 2024 will likely decrease the stock-to-use ratio, further supporting prices. Further, producers are holding onto stocks in anticipation of higher prices, bolstered by the upcoming festival demand.

In terms of production, turmeric acreage has increased by 20-25% across India, with Maharashtra seeing a 30-35% rise. However, a shortage of quality seeds and planting materials has tempered expectations, with overall acreage potentially rising by 30-40%. The monsoon's performance in key turmeric-growing states will be crucial in determining the final output.

Conclusion

Turmeric prices are likely to rally post-Ganesh Chathurthi, driven by tight stocks and rising demand, despite higher sowing in 2024.

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