Turmeric Futures Trade Overview: Speculators’ Impact and Market Resilience
Over the past month, there has been significant activity in the trading of turmeric futures, particularly in the August-September contracts. Large speculators have been actively participating, causing a notable decrease in turmeric prices, with a decline of $0,34-$0,36 per pound from previous levels. However, recent developments indicate a potential turnaround in the market, as subscriptions are on the rise, and traders who had previously purchased are now increasing their positions. This renewed interest could lead to a further price increase of $0,14, and the market is poised for a rebound, potentially surpassing its previous highs.
Turmeric Price Fluctuations: Unravelling the Recent Price Shifts
Regular readers have been following the ebb and flow of turmeric prices closely. According to the latest survey report, turmeric prices have dipped by $0,34-$0,36 per pound in the Delhi market over the past month. In 2017, Erode Edge ETFs were trading at $1,86-$1,89 per pound. Subsequently, due to improvements in the futures market, prices rose to $1,98-$2,01 per pound as subscriptions became available at lower rates. However, the dynamics of the turmeric market have shifted due to disruptions in wedding arrivals in producer markets and the persistence of high international prices. Export of turmeric remains limited in October and November due to these factors. Currently, the markets are experiencing a shortage of funds.
Turmeric Futures Market Situation: Behind the Scenes
The futures market for turmeric, both authorized and unauthorized, has seen high prices, leading to consistent efforts by large traders to sell and deliver their holdings. Over the past 25-30 days, the market has experienced a decline of $0,34-$0,36 per pound as these deliveries have taken place. Contracts for turmeric traded in August are now approaching settlement, and their prices have decreased from their peak of $2,47 to $1,98-$2,01 per pound. In this environment, speculators have been actively buying turmeric for trading between 2017 and 2021, with an eye on contracts for 2023. This activity has contributed to a breakdown in the spot market, although it is currently showing signs of improvement.
Prospects for Turmeric in Domestic and International Markets
Currently, there is minimal pressure on turmeric in producing markets, and production levels are lower compared to the previous year. Furthermore, high prices persist in international markets, limiting the availability of turmeric in the domestic market. Given these circumstances, there is a strong possibility that turmeric prices will once again increase. Turmeric production stands at approximately 5.5-5.6 million bags, while domestic and export consumption totals close to 1500 million bags. Under these conditions, it is expected that turmeric prices will become profitable once more after a brief period of adjustment. Looking ahead to October, it is likely that speculators have offloaded significant stock, but considering the stock levels in all major producing markets, such as Erode, Warangal, Duggirala, Cuddapah, Sangli, Nizamabad, etc., it is anticipated that the volume of deals sold will rise significantly, potentially resulting in a substantial increase in the cost of goods.
Conclusion
A Promising Turnaround in the Making: With improving subscriptions, favourable international prices, and limited production, the outlook for turmeric remains positive, offering the prospect of profitability in the near future. Advised to procure turmeric.