The average weekly futures price of NCDEX turmeric descended to INR 8,155/100kg in the week ending 2nd May, down 5% m-o-m and a decline of INR 1,159/100kg (-12%) since peaking during the second week of March. Prior to that, the weekly average price rallied from INR 6,338/100kg in the week ending 24th January, to INR 9,314/100kg in the week of 8th March.
Prices have recently been pressured by an influx of new crop supplies from this year’s harvest, and concerns over domestic demand, due to surging COVID-19 cases in India. At the beginning of May, the seven-day average of new COVID-19 cases surpassed 380,000, up from an average of 15,000 at the end of February. The alarming surge in COVID-19 infections resulted in the imposition of new curbs and restrictions on business activity and mobility, which could hinder demand for spices.
However, export demand has been strong, with India shipping 99,000 tonnes of turmeric between April and September 2020, according to the Spice Board of India, 42% above the same period in 2019. The strong pace of exports continued through the remaining months of 2020, according to trade sources. The US imported significantly more turmeric in 2020 than during any of the previous ten campaigns, shipping in 9,350 tonnes, an increase of 29% year-on-year, according to the USDA. This illustrates firm demand for turmeric during the pandemic, supporting bullish prices.
This years’ Indian turmeric production is anticipated to fall from last year, following a reduction in planted area and a decline in yields. Heavy rains in the second half of the 2020 monsoon season, between August and October 2020, in the main producing states of Telangana, Karnataka and Maharashtra, adversely impacted the crop. Concerns over the production shortfall led to the recent February price rally.