FMC asks exchanges to curb turmeric futures prices

Concerned with the 45 per cent increase in turmeric prices in just a month, commodity market regulator FMC has asked exchanges to take measures to arrest the volatility in futures rates. “We have directed the commodity exchanges to take pre-emptive measures to curb volatility in turmeric prices,” Forward Markets Commission (FMC) Chairman B C Khatua said.

At NCDEX, turmeric prices have shot up by 45 per cent to Rs 10,736 a quintal from Rs 7,406 a quintal in last one month. The spot price is even higher and is ruling at over Rs 11,500 a quintal at Nizamabad, Andhra Pradesh. Khatua said, “Prices are bullish both in the physical and futures market because of lower carry-over stock and apprehensions about production fall in the current season due to floods in Andhra Pradesh and Maharashtra.”

The carry-over stock is estimated to be 250,000 bags as on October 31, compared with 700,000 bags in the same period last year, Karvy Comtrade Analyst Kumari Amrita said. One bag contains 70 kg of turmeric, grown mainly in Andhra Pradesh, Tamil Nadu, Orissa and Maharashtra.

“Tight supply situation coupled with increased demand, especially after floods, has weighed on prices,” Amrita said. Following the regulator’s direction, both NCDEX and NMCE have imposed 10 per cent extra margin on buyers with effect from Wednesday to restrain speculators from futures trading. Margin is the money that a trader has to deposit for taking exposure in a particular contract.