Crop estimate shows potential for turmeric price rises

India’s 2016 turmeric crop which is being harvested now will be smaller than expected, industry sources in the country have warned.

According to trade estimates total turmeric output will reach around 402,000 tonnes compared with 625,000 tonnes in 2015.

In a March 8 market report, Manoj Grover of Mumbai spice importer and exporter Grover Sons suggested that this outlook could spur increases in prices from mid-2016 onwards.

He noted that domestic demand is around 475,000 tonnes and export demand is 75,000 tonnes. “So, clearly this season, the demand is set to outstrip supplies as we go into 2016 and the games on the exchange can start to play up too,” Grover said.

On March 11, a second Indian trader told that the estimated figures looked accurate to him and had been discussed at the World Spice Congress, which was held in Ahmedabad earlier this month.

“It is true that this year’s turmeric crop would be less and the previous year’s stocks have also hit all-time lows. Therefore the demand would outstrip the supply,” he added.

The Indian trader revealed that he had expected turmeric prices to increase a few days ago as this is the peak demand period for the spice in India, starting from the middle of February and running up to the end of May. However, contrary to his expectations, prices have not risen as demand is slow and stockists are reluctant to take additional cover because of the turmoil in the commodity market.

The Indian trader added: “I expect prices to shoot up in the next few days if the demand picks up. But if they do not rise now they would rise near September as that is the second peak demand season for turmeric in India and we could see all time high prices of turmeric this year.”

The Grover Sons report indicated turmeric powder Nizamabad grade of 2% to 2.5% curcumin content at USD1,600 per tonne cif EMP for March/April shipment. Steam sterilised turmeric powder of 2% to 2.5% curcumin content was listed at USD2,050/tonne cif EMP for the same shipment positions.

Upward pressure all round

Grover added that in just over a week prices of all Indian spice products have risen sharply due to the US dollar being 2% weaker against the Indian rupee in only seven working days as the stock markets were up 1,500 points. In addition, prices have been underpinned by freight rates to main European ports rising to USD500 per 20 ft full container load from USD125 on this basis earlier.

Moreover, there are downward revisions to estimates on other mainstream Indian spices.

There are reports that rains last week in Rajasthan have damaged the cumin seed crop there by as much as 20%.

In addition, the new crop of nigella seed is not as much as expected due to lower yields and there has been massive domestic demand for fennel seed.

Grover explained that exporters who sold for the first half of March onwards are now covering at higher prices for fennel seed and cumin seed and now China has emerged to purchase these Indian spices.

Strong internal demand on cumin

Grover acknowledged that Indian new crop cumin seed arrivals of around 40,000 bags as of March 8 were a record high for this stage of the season but domestic off-take is also at a peak.

The new crop is said to be close to 300,000 tonnes while domestic demand is seen as nearly at 165,000 tonnes and export demand at around 150,000 tonnes. There will also be stocks to be added to the commodity exchange and buying from stockists to follow.

Hence, for now Grover sees the new season supply and demand on Indian cumin seed as evenly matched.

Initial suggestions that Syria and Turkey will have decent new crops in June indicate that, as usual, the actual trend in prices will not be known until these crops come through and it is clear whether these origins will be supplying the global market.

Grover Sons’ own price indications on Indian cumin seed put 99.5% pure, sortex cleaned material at USD2,300/tonne cif EMP; 99% pure, machine cleaned at USD2,150/tonne cif EMP; and 99.5% pure, pesticide free (as approved by Eurofins laboratory tests) at USD2,500/tonne cif EMP.

Meanwhile, India’s new fenugreek seed harvest is under way and prices have reached a very attractive level for buyers, Grover feels. The colour of the new crop seeds is said to be favourable and the seeds are nice and clean. Grover added that India exports around 40,000 tonnes of fenugreek seed a year.

Fenugreek seed of 99.5% pure, sortex cleaned was put at USD720/tonne cif EMP and 99% pure, machine cleaned at USD690/tonne cif EMP.

Slow arrivals on fennel

Arrivals of new crop fennel seed are slow. A bumper crop is expected but this has yet to be proved and in the meantime domestic buying is strong and there is massive overseas demand, according to Grover. As a result, prices are “pretty firm right now”, he observed. Grover puts India’s annual exports of fennel seed at 20,000 tonnes.

New crop fennel seed of 99.5% purity, sortex cleaned and extra green was listed at USD2,050/tonne cif EMP and normal green on the same specifications at USD1,750/tonne cif EMP. Fair, average quality new crop green fennel seed of 99.5% purity, sortex cleaned was quoted at USD1,550/tonne cif EMP.

The new crop of chillies is arriving from Guntur and prices are quite firm on this spice.

The company advises that due to a smaller crop of chillies from Madhya Pradesh buyers should contact it for non-EU demand crushed chillies and chilli powder. In addition, it will also have steam sterilised and crushed chillies available soon.

In May, India’s new celery seed crop will come through. “Due to life time high prices, the crop should be pretty big and we are still a good three months away from new crop harvest,” Grover remarked.

Machine cleaned celery seed was quoted at USD1,750/tonne cif EMP.

Grover added that Indian celery seed exports are around 5,000 tonnes a year, of which some 75% goes to the US alone, the biggest global buyer of celery seed.

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