Informist, Friday, Dec 22, 2023
By J Navya Sruthi and Romeo M. Raj
MUMBAI – Turmeric and coriander prices in the domestic market may soar in 2024 on the back of good export prospects and lower acreage, market experts said. Turmeric futures contracts have risen 69% on the National Commodity and Derivatives Exchange so far in 2023 due to lower production, while coriander prices have declined nearly 10% amid a rise in production.
Jeera prices, on the other hand, may fall in 2024 due to higher production, they said.
Of the three spices, analysts believe the country’s golden spice – turmeric – is likely to give the best returns next year, followed by coriander.
Turmeric is expected to trade within a range of 9,000-20,000 rupees per 100 kg in 2024 and coriander is seen at 6,600-13,000 rupees per 100 kg in the next five to six months, said Ravi Shankar Pandey, senior analyst at SMC Global Securities. Turmeric futures may rise to a high of 21,000 rupees per 100 kg as traders may hoard stocks in the second half of 2024, anticipating even higher rates, Pandey said.
The Turmeric April contract on the NCDEX today ended at 14,250 rupees per 100 kg, while the coriander January contract closed at 7,428 rupees per 100 kg.
The area under turmeric in Telangana is 10-15% lower in 2023-24, while in Maharashtra, it may fall in the range of 15-20%, said Vikas Nagla, a local trader from Nizamabad. According to Olam International, India's turmeric acreage is seen 40% lower during the current year. Turmeric acreage in 2022-23 was 323,838 ha, data from the Spices Board showed.
Similarly, coriander acreage in the current season is also seen lower in top-producing states, traders said. In Gujarat, the second-largest producer of coriander, the area is down 47% on year at 114,832 ha as of Monday, according to data from the state agriculture department. In Rajasthan, too, the third-largest producer of the spice, acreage is down 11% on year at 47,581 ha as of Wednesday.
Besides lower acreage, erratic climatic conditions and higher exports of turmeric and coriander will have a positive impact on prices, market participants said.
Coriander exports rose nearly four times to 70,125 tn in Apr-Oct, while turmeric exports increased 3% on year to 102,163 tn, according to Ministry of Commerce and Industry data.
India, which exports about 12-15% of its total turmeric production, accounts for 84% of total worldwide shipments of the spice. Bangladesh is the largest importer of Indian turmeric, followed by the US, United Arab Emirates, Malaysia, and Morocco.
Coriander exports are expected to rise to 3.2-3.5 mln bags (1 bag = 40 kg) by the end of the current year (Apr-Mar), from the usual average of 1.2-1.5 mln bags annually, said Satyanarayan Gupta, a local trader from Kota, Rajasthan.
JEERA THE SPOILSPORT
Usually, jeera is the most expensive spice in the lot. Jeera futures have been falling recently, and for the next year, the trend is set to continue with acreage set to be on the higher side, analysts and traders said.
Jeera acreage in Gujarat, the top producer, surged 103% on-year to 530,030 ha as of Monday, state agriculture department data showed. As of Wednesday, in Rajasthan, the second top producer, acreage was higher at 668,306 ha compared with 575,970 ha a year ago, according to the state agriculture department data. The two states account for the bulk of the spice produced in India.
Predicting the price for jeera may be difficult as sowing is likely to increase substantially this year, Riteshkumar Sahu, an analyst at Kotak Securities, said.
Many farmers started investing heavily in jeera because of the profitability of the crop, which led to higher acreage in key growing states, SMC Global's Pandey said. Many farmers in Gujarat and Rajasthan have shifted from coriander to jeera in the hope of better returns, he added.
Analysts say that once the price drops below the levels of 30,000 rupees per 100 kg, it could further fall to 24,000 rupees in five or six months. Exports will pick up at lower prices and this could lead to a rise in prices later in 2024, Pandey said.
Jeera January contract on NCDEX ended at 38,150 rupees per 100 kg today.
This year has been an exception as India has imported jeera significantly, Anuj Mittal, a trader based in Unjha said.
According to the Ministry of Commerce's data, jeera imports in Apr-Oct rose a staggering 1,122% on year to 15,498 tn, while exports contracted 34% on year to 76,367 tn.
India usually exports large quantities of jeera and imports only a minuscule amount. As prices touched record highs in India due to the lower acreage last season, India started importing from China, contributing to a surge in imports, Mittal said.
If the harvest is good, jeera prices will drop to 20,000-25,000 rupees per 100 kg when the new crop hits the market in February-end or early March, Sahu said.
By the looks of it, the overall trend points to a rosy 2024 for both turmeric and coriander, but not quite for jeera. End
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