In the world of turmeric, a hibernation that lasted for months is finally showing signs of life. After a spell of bearish sentiment that plagued the market, a rebirth is on the horizon as the completion of deliveries marks the dawn of a new era.
“When speculators enter the ring…”
The turmeric market had initially promised a fruitful season due to reduced production and adverse weather conditions, fueling hopes of a significant upturn. However, as the age-old saying goes, “When speculators enter the ring, markets dance to their tune.” For the past two and a half months, the market languished under the influence of speculators, moving at their whims. But now, like the phoenix rising from its ashes, the market seems poised to regain its original vitality. With prices currently at a notable USD 0,18 to 0,24 per kilogram, it’s a glimmer of hope for traders. Yet, patience remains critical as the market begins its gradual ascent.
Turmeric suffered a 40 percent reduction in production this season due to adverse weather and decreased cultivated areas. To fuel the fire, aging stocks laid dormant for years and were sold off to speculators for speculative deliveries and processing. With that supply dwindling, the potential for future price increases looms.
The total yield this season comprised approximately 66-68 million bags of both fresh and aged produce. However, domestic and export consumption in India tallies up to a staggering 1.25 crore bags. The dire situation started to unravel from the beginning of the season, further exacerbated by speculators in the futures market in June and July. Erode’s spot market, a crucible of turmeric trading, now grapples with prices around USD 1,56 per kilogram. The waves of buying have surged once more, depleting stocks in markets across Erode, Sangli, Nizamabad, Cuddapah, Dugirala, and beyond. As the adage goes, in times of recession, stocks are liquidated, and this was no exception.
A glimmer of hope emerges as the futures market gains strength, alleviating the selling pressure in the spot market. The traders’ confidence has been rekindled after enduring significant losses in the past weeks. However, caution remains paramount, with half a year left until the new turmeric harvest. The futures market is also running low on supplies for the coming year, with slim pickings for November-December deliveries. In light of these circumstances, the current prices appear resilient, leaving little room for a decline. It’s a waiting game, and patience is the name of the game for traders as they prepare for the market’s reawakening.
