Steep fall likely in turmeric sowing, after year's price sag

Turmeric is expected to see a drastic fall of 50- 60 per cent in the area under sowing from last year, due to a sharp fall in its price, with farmers having suffered heavy losses. The production cost is Rs 40 a kg but the current market price is Rs 30-35 a kg.

In the past year, prices have fallen 50 per cent from Rs 7,252 per quintal to Rs 3,554 per qtl on the National Commodity & Derivatives Exchange.

A senior official from the Spices Board of India said he expected sowing area to fall drastically. Last year, the area under turmeric was 81,000 hectares; this expectation this year is for 35,000 ha, according to the Andhra Pradesh agricultural department.

Farmers may resort to sowing cotton, pulses and oilseeds instead. These commodities gave better returns last year and their Minimum Support Price has been increased sharply by the government. This is similar to 2008-09, when turmeric prices fell to Rs 20 per kg, pushing farmers to grow cotton and oilseeds. This caused the price to increase to Rs 17,500-20,000 per qtl in 2010, due to lower production. Traders are expecting a replay and expect the price to rise from from September 2013 on.

Last year's production was 10 million bags (a bag is 75 kg) and the carryover stock from last year is two million bags. The export market is subdued.

“As last year's production was a bumper one, if the price of the spice falls by another Rs 3-5 a kg, which the market is expecting, then this will push farmers to sow other crops,” said Manubhai Shah, a Navi Mumbai-based trader.

 

With inputs from Dasarath Reddy from Hyderabad