2021 India’s turmeric exports fall below 2020 level

Turmeric

India

Supply Chain Management

Market & Price Trends

Published Jan 13, 2022

India, the biggest turmeric exporter, saw another successful export sales year. In the first ten months of 2021, total shipments of the yellow spice (fingers and powder) from the country exceeded 127,000 tonnes. Although it is 16% less than in the same period of 2020, this figure is the second-best performance result of the turmeric export sector. The shipments of the condiment have been adversely affected by pandemic lockdowns, which limited consumption of spices by the hospitality sector in Bangladesh, the leading importer of turmeric. On the other hand, the virus has spiked the rise in exports to the EU and some West Asian countries, as local consumers started appealing more to the health benefits of the spice.

The current pandemic has created positive and negative externalities for the Indian Curcuma exports in the past two years. The spread of coronavirus at the end of 2019 and the beginning of 2020 boosted the demand for turmeric worldwide, especially from West Asia, Europe, and the USA. The anti-inflammatory and anti-viral qualities of the yellow spice, which are very helpful in the fight against coronavirus, have drawn the attention of consumers and healthcare industries in India and overseas. This facilitated an already-existing upward trend of turmeric consumption globally, with more consumers showing a high level of health consciousness. Therefore, India’s exports of Curcuma surged to record 181,665 tonnes in 2020, 36% more than in 2019.

Source: Indian Ministry of Commerce and Industry

However, recent statistics show that the 2021 export pace is slower than last year. The shipments of turmeric from India in the first ten months of the previous year reached 127,000 tonnes, 16% down compared to 2020. Lower exports to Bangladesh, the county that accounts for one-third of India’s foreign turmeric deliveries, were behind a downward trend. In January-October 2021, the state imported 22,200 tonnes of turmeric, 53% less year on year. The most considerable losses of India’s exports of Curcuma to Bangladesh were seen in June-July when the latter announced severe closures to tackle the spread of the virus. Lockdowns meant that the activities of the hospitality sector, of social events, like weddings and festive celebrations, were limited. Therefore, the domestic demand became sluggish. Import trade data confirm the outcome of this negative externality. Bangladesh imported only 2,776 tonnes of turmeric from India in June 2021, down 65% year on year; in July, imports were only 1,843 tonnes, nine times less than a year ago.

Source: Indian Ministry of Commerce and Industry

Higher buying from other countries partially mitigated the decrease in Bangladeshi imports. India’s second-largest turmeric destination, the UAE, acquired almost 19,200 tonnes of yellow spice in the first ten months of 2021, showing a 157% increase year on year. This Middle East country serves as a trading hub for spices then sold to other Asian countries. Besides its vast application in cooking, spice usage for medical purposes during corona times has increased.

The EU has become one of the relatively growing buyers of turmeric. The biggest EU economies, Germany, France, Italy, Spain, and the Netherlands, showed a substantial rise in raw Curcuma imports. For example, Germany’s raw turmeric imports rose to 4,300 tonnes from January to October 2021, up 35% yearly. EU consumers increased the use of turmeric in 2021 thanks to its richness in antioxidants and its ability to cleanse lungs. According to the Mintec research company, after the spread of COVID-19, 45% of the EU population tended to add more nutrients to their diet to remain healthy, especially spices.

Apart from using turmeric directly in cooking or adding to a drink, it is used for extracting curcumin, one of the most valuable components of turmeric. Curcumin raises the demand for turmeric in many countries, particularly from the pharmaceutical sector. “Since the beginning of COVID, the nutraceutical industry has been buying turmeric actively to extract curcumin. It is converted into tablets and sold at pharmacies as immunity boosters. The demand for turmeric oil is also growing. Thus, high demand has triggered turmeric sales both in the Indian and overseas markets”.

Current market situation

From 9 December 2021 to 9 January 2022, farmgate spot prices for turmeric fingers in India jumped by 16% to $1,200-$1,250/MT. A few fundamental factors have been supporting the market over the past month. First, the demand for the yellow spice was firm both in the domestic and export markets, even though it was the end of the season and only the old-crop commodity was available.

Source: NCDEX

The second bullish sentiment came from the reduced forecast for the 2021/22 crop, which begins from mid-January 2022. Lower crop estimates are connected to excessive precipitation in the main Curcuma growing regions: Telangana, Maharashtra, and Karnataka. “Heavy rains in the last two months of 2021 have caused damage to 10-12% of the turmeric crop area. This factor was responsible for a 5-6% rise in prices in the first week of January 2022”, explains Tridge representative in India, Rekha D. Despite rains, market players expect the price to decrease from the current level. “Despite the planting area damage, the overall crop state is good. Domestic prices are forecast at $1,000-$1,100/MT,” mentions Rekha D.

Sources:
Investing.com.Turmeric Gains on Good Domestic and Export Demand
The Economic times, India times.Coronavirus scare shoots up demand for India's raw turmeric
Examine.com.What is curcumin?
The Hindu Business Line.Turmeric gleams on demand, fears of rains affecting new crop
CBI.eu.Increase in demand for immunity-boosting spices