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Turmeric CropSurvey & Analysis 2015
Turmeric CropSurvey & Analysis 2015
16th October, 2015
Turmeric Crop Survey and
Analysis 2015
1
16th October, 2015
The Turmeric crop year of 2015-16 began on a good note this year as the southwest monsoon
arrived on time. Weather conditions were ideal at the start of the sowing season. Turmeric price
witnessed a gradual correction from June as the pace of sowing picked up. Turmeric prices
corrected from the high of Rs.9348 per quintal recorded in January 2015 and fell to Rs.6664 per
quintal by July 2015.
The fall in prices did not sustain and Turmeric prices began its up move by the mid of August as
the progress of southwest monsoon was disappointing. Turmeric prices moved up and hit a high
of Rs.8728 per quintal by the end of August 2015 as weather conditions turned unfavourable for
the crop.
Turmeric prices have remained on the higher side since August 2015 as below average rainfall
from July till the end of September has severely impacted the yield and dented the prospects of a
bountiful crop this season. Lower carry forward stocks in the 2015-16 season has further fuelled
the price rally.
Source: NCDEX, Reuters
Daily Turmeric Price :
Market Recap
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Ravi Dsouza
Research Analyst
Nikhil Murali
Research Associate
Kunal Shah
Research Head
Turmeric Crop Survey and
Analysis 2015
2
16th October, 2015
Source: Traders, NB Research Note: Each bag is 75Kg
The year 2015-16 is going to witness a serious demand-supply crunch as we will begin the year
with an all time low carry forward stocks of 15.57 lakh bags as compared to 31.87 lakh bags in
2014-15. In the year 2014-15 we have seen production drop by 15 percent to 45 lakh bags due to
lower acreage and unfavorable climatic conditions. The shift of acreage was mainly caused due to
poor realization rates to cultivators in the last marketing year i.e. 2013-14.
Through our crop survey and analysis in the main turmeric tracts of India, we came to a
conclusion that the turmeric production of India in 2015-16 will be in the range of 375,000 –
390,000 metric tonnes (i.e. 50-52 lakh bags) which is slightly more than last year’s figures of
337,500 metric tonnes (i.e. 45 lakh bags). It has to be noted that last year, the turmeric production
was least in the near past due to harsh weather conditions. Though this year we had a deficient
monsoon in some turmeric growing areas, the increase in acreage in Tamil Nadu and Andhra
Pradesh owing to favourable climatic conditions will compensate for the lower production in
other areas.
In the year 2015-16 we expect supply-demand situation to worsen as the total supply is expected
to drop by 17 percent to 65.47 lakh bags as compared to 76.87 lakh bags, while demand is
expected to be in the range of 63-64 lakh bags leaving the carry out stocks at a minuscule figure of
only 2.8 lakh bags. Stock to usage ratio is expected to fall to an all time low of 4.46 percent as
compared to 25.19 percent in 2014-15.
Particulars(In lakh bags) 2012-13E 2013-14E 2014-15E 2015-16F
Opening Stock 25 40.2 31.87 15.47
Production 75 52 45 50
Total Supply 100 92.2 76.87 65.47
Dom. Consumption 48 50 51 53
Exports 11.8 10.33 10.4 9.67
Total Consumption 59.8 60.33 61.4 62.67
Closing Stock 40.2 31.87 15.47 2.8
Stock to Usage Ratio 67.22 52.82 25.19 4.46
Balance Sheet
Turmeric Crop Survey and
Analysis 2015
3
16th October, 2015
Source: NB Research, Trade Sources
Source: Spice Board of India
Exports
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A.P & Telangana Karnataka Maharashtra Tamil Nadu Others
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Area Under Cultivation
Turmeric Crop Survey and
Analysis 2015
4
16th October, 2015
India is the largest producer and consumer of turmeric in the world. Despite this, India has the
largest share in world exports. Top export destinations of Indian turmeric are U.A.E., Bangladesh,
Malaysia, Iran, UK and USA.
Exports of turmeric have risen significantly since 2011 due to quality control initiative undertaken
by the Spice Board of India on quality control. Many of the developed countries like the US, the
UK and Japan are showing keen interest in purchasing Indian turmeric due to high degree of
quality consciousness being followed by Indian exporters.
Turmeric exports are expected to fall to 80,000 tonnes in 2015-16 from 86,000 tons in 2014-15 as
exporters will find it difficult to procure Turmeric due to higher prices and lower availability.
Our research team visited the major turmeric growing regions – Nizamabad, Karimnagar and
Warangal (Telangana) and Sangli (Maharashtra) in the first week of October 2015. We had
detailed discussions with each of the VCPs - Farmers, Brokers, Traders, Exporters, etc. which gave
a clear picture regarding climatic conditions prevailing there, the crop growth status, the
intricacies involved in the turmeric trade, trade opportunities prevailing in the sector and so on.
Key Findings
Telangana
Nizamabad region of Telangana is a major contributor to India’s Turmeric production,
accounting to about 25 percent of the total production. We visited the Armoor belt of Nizamabad
which comprises the villages of Ankapur, Anksapoor and regions of Karimnagar like Metpally
and Jagtial. Turmeric is mainly intercropped with maize in this region. Sowing of turmeric in this
region normally starts in the first week of June and this year also it was on time as it mostly
depends on the timely onset and progress of monsoon. But the months of July and August were
rain-deficient and it raised many eyebrows regarding the growth of the crop. When we visited the
turmeric farms, the crops were almost 4 months old. To our surprise, the deficient rainfall in this
region hadn’t taken a heavy toll on the crop as most of the fields were drip-irrigated. But we can’t
ignore the fact that the soil is under moisture stress and the diminishing water table coupled with
the prevailing high temperatures (About 35-37 C compared to ideal temp range of 30-33 C) has
visibly affected the growth of the crop.
Key Observations from our Crop Survey
Turmeric Crop Survey and
Analysis 2015
5
16th October, 2015
The crops were only 1.5-2 feet tall as against the normal height of 2-2.5 feet within 4 months
duration. Normally the fingers of the plant must be 5-7 in numbers and 3-4” long; but we found
that this year it’s less in number i.e. about 3-4 only. Considering all these factors we conclude that
there will be a dip in the yield of the crop. This year we expect the yield to be around 6.47
tonnes/ha compared to last year’s figure of 6.59 tonnes/ha. Also considering the decrease in
acreage of turmeric in this region from 13,655 ha to 12,747 ha, we expect the production to be in
the range of 78,750 – 82,500 metric tonnes.
In Warangal region, turmeric acreage dropped from 8,956 ha last year to 7,558 ha this year. So we
expect the production figures to be in the range of 18,750 – 22,500 metric tonnes which is slightly
lower than last year.
From our survey we got to know that there is a dip in the acreage of Turmeric in Telangana from
44,623 ha to 40,830 ha. Considering the looming concerns regarding yield, we expect the total
turmeric production in Telangana to be less this year, around 97,500 metric tonnes.
Nizamabad Crop Scenario
Ankapur
Anksapur
Stunted Growth
Stunted Growth
Turmeric Crop Survey and
Analysis 2015
6
16th October, 2015
Andhra Pradesh
In Andhra Pradesh, there is an increase in the turmeric acreage- from 12,333 ha last year to 19,377
ha this year. The acreage in almost all the major turmeric growing districts - YSR Kadapa, Guntur,
Krishna, Kurnool, and Visakhapatnam increased this year. Though the crop is in the vegetative
stage, any major crop damage hasn’t been reported till now. Considering these facts we expect the
production figures to be around 45,000 – 48,750 metric tonnes for 2015-16.
Maharashtra & Karnataka
We visited Sangli, the “Turmeric City” of Maharashtra, an epithet proven true by the fact that it’s
India’s largest turmeric trading centre. The turmeric growing belt of Sangli comprises of villages
in and around Sangli like Islampur and areas like Athani in Northern Karnataka. In these regions
turmeric is mainly intercropped with Sugarcane. Sowing in this region is normally carried out in
the period of 25 May – 15 June. This year we witnessed a drought-like scenario in parts of
Northern Karnataka and Marathwada, as we observed a decline in the turmeric acreage in
Karnataka from 16,801 ha to 11,761 ha for 2015-16.
79
Sangli Crop Scenario
Islampur
Tasgaon
Sangli Crop Status
Turmeric Crop Survey and
Analysis 2015
7
16th October, 2015
But the situation was not that worse in Sangli region which was visible in the condition of the
crops. The crops were approx 3 feet tall (4 months old crop) and were devoid of any pests or
diseases. Overall, the crops are in good condition and we expect the yield to be more this year. So
in Sangli region, we expect the production to be higher this year around 60,000 metric tonnes.
But the acreage in Maharashtra as a whole dipped from 9,887 ha in 2014-15 to 6,920 ha in the
current season. And it has to be noted that other major turmeric growing regions of Maharashtra
such as Hingoli, Basmat and Nanded received a deficient monsoon this year and the crops are
obviously under moisture stress. So we expect the production in this belt to be around 45,000
metric tonnes, slightly lower than last year’s figures.
Tamil Nadu
Erode region in Tamil Nadu is one of the major turmeric growing regions of the country
contributing around 30% of the country’s total production. Sowing season in this region starts
from June end only. The acreage in the whole of Tamil Nadu rose from 46,160 ha last year to
53,129 ha this year, about 15% increase owing to good and timely rainfall. The plants in Erode
region are reported to be around 1-2 feet high (3 months old) as on now which shows that the
plants are in good condition. Taking all these facts into consideration, we expect the production to
be in the range of 97,500 – 105,000 metric tonnes this year.
Non-traditional/Small growing areas
Other turmeric growing tracts comprising Kerala, Assam, etc. account for about 38,160 ha of
turmeric cultivation. But these are mostly grown for household consumption and other domestic
purposes.
Indian Production Scenario
Through our crop survey and analysis in the main turmeric tracts of India, we came to a
conclusion that the turmeric production of India in 2015-16 will be in the range of 337,500 –
375,000 metric tonnes ( i.e. 45-50 lakh bags) which is slightly more than last year’s figures of
300,000 metric tonnes (i.e. 40 lakh bags). It has to be noted that last year, the turmeric production
was least in the near past due to harsh weather conditions. Though this year we had a deficient
monsoon in some turmeric growing areas, the increase in acreage in Tamil Nadu and Andhra
Pradesh owing to favourable climatic conditions will compensate for the lower production in
other areas.
Turmeric Crop Survey and
Analysis 2015
8
16th October, 2015
The crop year 2015-16 is going to witness a tight supply and demand situation as lower carry
forward stocks coupled with a marginal rise in production will leave the supply side with a huge
strain. We expect prices to rise during October-November 2015 as demand for spices generally
rises during the festive season in India. Turmeric Prices will witness a correction during the
period of January-March 2016 as new crop arrival generally arrives during this period, but we do
not see a sharp fall in prices during the arrival season this year due to lower availability. Looking
at the demand and supply situation we are bullish on Turmeric and recommend buying the
NCDEX December turmeric futures contract for a target of Rs. 9,000- 9,500 per quintal by the end
of this year i.e. December 2015.
Outlook
Turmeric Crop Survey and
Analysis 2015
9
16th October, 2015
Disclaimer: This Document has been prepared by N.B. Commodity Research (A Division of Nirmal Bang
Commodities Pvt. Ltd). The information, analysis and estimates contained herein are based on N.B.
Commodities Research assessment and have been obtained from sources believed to be reliable. This
document is meant for the use of the intended recipient only. This document, at best, represents N.B.
Commodities Research opinion and is meant for general information only. N.B. Commodities Research, its
directors, officers or employees shall not in any way be responsible for the contents stated herein. N.B.
Commodities Research expressly disclaims any and all liabilities that may arise from information, errors or
omissions in this connection. This document is not to be considered as an offer to sell or a solicitation to buy
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Address: Nirmal Bang Commodities Pvt. Ltd., B2, 301 / 302, 3rd Floor, Marathon Innova, Opp. Peninsula Corporate Park, Ganpatrao Kadam Marg, Lower Parel (W), Mumbai - 400 013, India
RESEARCH TEAM Name Designation E-mail
Kunal Shah Head of Research [email protected]
Devidas Rajadhikary Sr. Technical Analyst [email protected]
Harshal Mehta Sr. Technical Analyst [email protected]
Mohammed Azeem Technical Analyst [email protected]
Somya Dixit Research Analyst [email protected] Ravi D’souza Research Analyst [email protected] Nikhil Murali Research Associate [email protected] Anish G Research Associate [email protected] Smit Bhayani Research Associate [email protected]
