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Published on: Nov. 17, 2020, 3:12 p.m.
Turmeric creates a new conflict between TN, Sri Lanka
  • Turmeric has become a source of heartburn for Indian farmers and Lankan consumers

By Rakesh Joshi. Executive Editor, Business India

The Indian spice, turmeric, considered an immunity-boosting product in these Covid times, is becoming a source of heartburn for farmers of Tamil Nadu and consumers in Sri Lanka, possibly requiring diplomatic attention. The flavourful spice is used in everyday cooking in Sri Lanka, in a range of regional dishes. Further, following the pandemic, some have begun adding a pinch of turmeric to their daily cup of tea, citing ‘medicinal’ properties it is believed to have. 

Sri Lanka was, in the past, self-sufficient in turmeric cultivation but, over the years, its production fell. The subsequent shortage was exacerbated by tightened restrictions imposed by the Gotabaya Rajapaksa government on its import. The ban was among the legislations the Sri Lankan has government has passed, aimed at fortifying the economy in the wake of the pandemic. The idea was to encourage domestic production and help farmers out of the debt crisis.

Sri Lanka produces 2,000 tonnes of turmeric a year, but the nationwide demand for the spice is close to 7,000 tonnes. To meet this demand, thousands of kilograms of the rhizome have been illegally routed through the sea from the Indian shores of Velankanni and Vedaranyam to Sethubavachatram and Dhanushkodi, to meet the widening demand-supply gap. 

The spice is now being smuggled into the island nation in gunny bags from Tamil Nadu. The new spice route extends from the large turmeric producing districts of Erode and Coimbatore in Tamil Nadu to Jaffna and Mannar, and is being managed by cartels. Despite alerts by the Coastal Security Group, there has been no respite. 

India is the largest producer of turmeric in the world, accounting for almost 75 per cent of the world’s production. Indian turmeric is considered to be the best in the world market, because of its high curcumin content. Major turmeric producing states in India are the southern states of Telangana, Andhra Pradesh, Tamil Nadu and Karnataka, the eastern states of Odisha and West Bengal and the western state of Maharashtra. This year, the average price of turmeric in Chennai stood at Rs118 per kg. 

Shooting prices and smuggling

While the Sri Lankan government has announced that the maximum retail price of turmeric powder would be LKR750 (about Rs295) a kg, it is being sold for more than five times the price, and in some areas, it has even shot up to LKR4,000-5,000 a kg in the black market. According to a media report, the price of a kg of turmeric before the import ban was LKR325 (about Rs136) with an import tax of LKR102 (Rs40).

  • Despite the shortages and reports of shooting prices and smuggling, President Rajapaksa has said his government will not go back on its decision on import restriction

Despite the shortages and reports of shooting prices and smuggling, President Rajapaksa has said his government will not go back on its decision on import restriction. Addressing a Cabinet sub-committee on Cost of Living, Rajapaksa said that, though public faced difficulties for a ‘short period’ of time, steps taken to ‘strengthen the rural economy and uplift the farming community cannot be reversed’.

To control foreign exchange parity rates and to get rid of high debt burden on farmers, imports should be restricted, he said, according to a media statement issued by his office.

The biggest loser in this has been the Indian turmeric farmer, as middlemen have stepped into the picture in a nexus with their Sri Lankan counterparts, leaving the farmer with no choice in the pricing of the commodity. As it is, many turmeric farmers were hit in recent months by the lockdown, as their crop remained unsold for a long time.

Turmeric is a cash crop and farmers largely depend on it for further sowing and other agricultural activities. The lull in the market is expected to affect production in the next season. 

Some observers in Chennai have called upon the two countries to discuss the possibility of reviving a formal and legal route for turmeric exports to heal the heartburn of farmers and buyers. A group of turmeric importers in Sri Lanka has also written to the President and the Prime Minister, seeking release of 1 million kg of turmeric, imported from India earlier, stuck at the Colombo Port, in order to ease the shortage at least temporarily.

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