Ground Report

  • Total Turmeric arrivals are expected to be around 45-50 lakh bags during 2016. Arrivals in the market in 2016 are 8 to 10% less compared to last year due to poor quality hence, prices too are low. Liquidity position is tight, so farmers will release stock after Monsoon which will bring better situation in the market conditions.
  • Turmeric traders are not willing to clear their stock from the warehouses at such low prices. They will continue to preserve it in the cold storage till the end of Monsoon and will release in the months of August-September which will see an increase in the prices.
  • There are around 3-5 lakh bags in the cold-storage which include current as well as carry forward stock which will fetch a good price in the coming months. Around 75 lakh bags are consumed in India for both domestic as well as export purpose.
  • Buyers are hesitant and outlook is uncertain for Turmeric, whereas stocks at the trading centers is said to be higher. Turmeric prices are currently hovering around Rs.7800-8200 per quintal and expected to touch Rs.9000 by the year end and likely to touch a bottom of Rs.6000 during the off season. Prices are in a medium range now and expected to rise in October-November due to arrivals from the cold storage.
  • Major buyers will prefer to source Red Chilli for stock as Monsoon ahead may lead to increased moisture level leading to quality loss. Farmers are likely to increase acreage for Chilli sowing next season due to better rates and expected to begin in July after Monsoon sets in. The shortfall in harvested crop and rising demand from overseas, particularly China, have raised Chilli prices to a new peak.
  • Black Pepper prices witnessed a steady trend on sluggish activities because of the heavy rains. Black Pepper arrivals are exceptionally low and last year's carry forward stock is circulated currently which will surely fetch a good price at the end of 2016. Citing high moisture content above 13.5 per cent due to the rains buyers were quoting lower rates while sellers not ready to sell at those levels.
  • Black Pepper Prices were hovering around Rs.520/kg last year this time which is now ruling around Rs.680/kg. Hence, farmers will continue to cultivate Black Pepper this season too. Black Pepper prices are expected to rise gradually in the coming months and may touch Rs.750 as production has reduced.
  • Rs. 20 million has been allotted by the Central government through Spices Board for Idukki farmers for Black Pepper which has failed to reach them and the scheme has flopped fully. Also, Black Pepper imports from Vietnam have hammered the local prices to some extent.
  • The Black Pepper farmers have got at least 60% of their last years produce stocked up which will be released in the market shortly after the rains. Black Pepper prices are expected to rise from November onwards due to the demand and low supply.
  • The Black Pepper flowering season has already been affected due to the delay of 1 month of Pre-monsoon showers so there will be around 20-40% lower production in 2017 compared to the last season which saw a bumper crop.
  • Cumin Seed supply is dull so far this season mainly due to lower crop unable to cater rising demand from domestic and overseas market. Supply so far during the current season began from March 01, 2016 dropped 17% to 1 lakh tonnes.
  • Most farmers have off-loaded their Jeera crop. Of the total estimated crop of around 42 lakh bags for Indian states of Gujarat and Rajasthan, close to 70% already been sold in the market. The local demand for Jeera itself is pegged at 30 lakh bags, putting further pressure when exports rise. Current fundamental is strong for Jeera and any sharp fall likely to attract strong buying.
  • Cardamom prices improved so far on good demand amid decline in supply at auctions held in Kerala and Tamil Nadu. As the harvesting has ended and much of the stocks are believed to have been released so far, the arrivals at the auctions declined. The next Cardamom crop would arrive at the market only by August end and it is likely to be comparatively lower than that of the current season.
  • Cardamom demand to pick after Ramadan as currently sales are on in the upcountry markets and thus by mid-July the inventories in these markets would be exhausted and that in turn would push up the demand.

Policies

  • Second advanced estimates by Indian government for 2015-16 forecast Jeera output to lower by 23% to 0.37 million tons from 0.49 million tons of 2014-15. Area under sowing for Jeera in 2015-16 was 0.70 million hectares from 0.89 million hectares last year.
  • India tentatively shipped around 45000 tonnes of Jeera between March to May as against 15000-20000 tonnes a year ago.
  • Spices exports during April 2015 to March 2016 declined by 5 per cent to 0.84 million tonnes from 0.89 million tonnes a year ago though in monetary terms, it increased by 10 per cent.
  • Red Chilli production for 2015-16 is predicted marginally higher by 2% to 1.63 million tonnes from 1.61 million tonnes last year.
  • Pepper production estimates lower by 17% while Turmeric and Cardamom output set at 0.83 million tonnes and 24000 tonnes. India's Pepper production this year was 40000 tons, 53 percent lower as against last year’s 75000 tons. Domestic consumption of Pepper also increased to 50000 – 55000 tons.

Global

  • Jeera exports expected to cross 100000 tons this year with China being a major buyer at around 35,000 tonnes.
  • New Jeera crop season is going to start in Turkey and Syria soon. Jeera from Turkey will arrive after July 15.
  • Jeera crop in Turkey and Syria expected to be around 25000-30000 tonnes. Syria is expected to produce 12000-15000 tonnes and Turkey is expected to have 10000-15000 tonnes Jeera.

Outlook

  • Sowing of Turmeric has resumed in many parts of country on time. Traders and farmers-who are holding stocks on hopes of rise in prices, may turn sellers as rains would brighten the crop prospects. This season, Turmeric production is estimated to increase 8 lakh tons from 7.50 lakh tons last year.
  • During February-May, quantity of Turmeric arrival from growing regions were 71 percent higher compared to the last season. Turmeric demand from traders and stockists will pick up in coming months as exports gather pace during June-July. A clear picture of the actual progress of the monsoon and sowing will drive Turmeric prices.
  • Cardamom prices fluctuation in prices on daily basis in the range of Rs.25-50 has affected arrivals which is 30-40% less compared to last year. No fresh arrivals due to inadequate rains but there is carry forward stock of last season which would quantify around 2500 quintals. Cardamom prices may see positive movement in September-October season.
  • Next Cardamom arrivals would be only around September, subject to sufficient rains. Current prices of average quality ranges between Rs.650 to 700/kg and prices are low now but expected to increase from the next season in September and likely to touch Rs.1100/kg by year end due to the mis-match in supply-demand ratio.
  • Stockists are optimistic for Jeera and targeting Rs.20000/100 kg this season during October-November.
  • Activity is dull at present in Red Chilli mainly due to heavy rainfall in the region with sufficient stocks with consumers for near-term. Demand is expected to improve sooner or later.

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