Turmeric tumbles: India’s merchant association says raw material price has dropped 10%

29-Jun-2020 - Last updated on 29-Jun-2020 at 01:56 GMT

Market closures due to the COVID-19 lockdown has caused the price of turmeric to drop, according to Turmeric Merchants Association based in Erode, Tamil Nadu. ©Getty Images

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India’s raw turmeric price this year is about 10% lower than last year partly because COVID-19 lockdowns and market closures have led to a surplus, said a major merchant association in India.

The Turmeric Merchants Association based in Erode, Tamil Nadu - one of the key turmeric markets in India – said the market closure has slowed down the sales of raw turmeric which traditionally peaks in March and April.

In addition, certain states in India have beefed up their production, which led to more supply, RV Ravishanker, president of the association told NutraIngredients-Asia. The other key producing states are Telangana and Maharashtra.

The association currently has 250 members, of which 70 are traders and the remaining are commissioned agents of the turmeric farmers. About 60% of the traders in the association deal with exporters.

“All the markets were closed during the lockdown, but suddenly when all the markets reopened, it got flooded at one point,” Ravishanker said.

“So, when the markets are flooded, you can get it at a lower price, that is why prices were a bit lower this year.”

Asked if this means that the prices of turmeric has declined as a result, he said:"I think should have been cheaper right now, cheaper by around 10% nationwide."

According to him, turmeric harvesting, which was between January to April this year, was not curtailed during the lockdown.

He said that about 90% of the sales at the association went to food and nutrition companies and the remaining 10% for pharmaceutical and biotech firms.

In past years, the association sold about 500 to 600 tonnes of raw turmeric per day during the peak season.

This year, the market was forced to shut down due to the COVID-19 lockdown on March 23. It reopened on April 15, but demand remained slow as farmers were reluctant to attend.

“The traders also did not have detailed insights on the conditions and regulations involved in buying, bringing, processing, and transporting it, they were reluctant to buy as well.”

As such, less than 100 tonnes of raw turmeric were sold during mid to end April.

The situation has started to improve in May, as supply increased to about 200 tonnes per day, of which, about 80% were sold.

The situation continued to improve early this month as orders for raw turmeric are coming back, albeit lower than expected.