India: Turmeric market firms as arrivals decline and futures gain support

• Lower arrivals tighten near-term availability across key markets
  
  
• Futures strengthen on active buying interest and rising open interest in July contracts
  
  

Stock levels remain adequate, but sentiment improves amid supply concerns

India's turmeric market witnessed a firm trend during the week ended 19 June, supported by lower arrivals and strengthening futures prices across major exchanges. Spot turmeric prices rose by INR 485/t week on week to INR 16,220/t on 19 June, reflecting improved buying activity and tightening supplies in physical markets.

The bullish sentiment was also visible in the derivatives segment. The June contract increased by INR 804/t to INR 16,700/t, while July and August contracts gained INR 478/t and INR 514/t respectively, settling at INR 16,868/t and INR 17,428/t. The narrowing gap between spot and nearby contracts indicates stronger market confidence and expectations of firmer prices in the short term.

Arrivals decline, supporting market sentiment

Turmeric arrivals across major producing centers fell to 12,592 t on 19 June from 13,105 t a week earlier, down by nearly 4%. Market participants reported that reduced farmer selling and selective stock holding by traders limited fresh supplies, providing support to prices.

Trade sources noted that buying interest from domestic processors remained steady, while stockists increased purchases anticipating tighter arrivals during the coming weeks.

Open interest shifts to July contract

Open interest data showed a significant rollover from the expiring June contract into July. Open interest in the June contract declined sharply from 7,345 lots to 110 lots, while the July contract increased to 24,550 lots from 16,382 lots a week ago. The rise in open interest alongside higher prices suggests fresh long positions entering the market.

Meanwhile, exchange warehouse stocks remained comfortable. As of 19 June, stocks stood at 319 t in Erode Salem, 3,671 t in Nizamabad, 5,001 t in Sangli, and 3,205 t in Basmat.

With arrivals declining and futures attracting fresh buying interest, turmeric prices are likely to remain firm in the near term. However, adequate exchange stocks and any increase in farmer selling at higher price levels may limit sharp upside movement.