Higher mandi arrivals for 2017 have slammed Turmeric prices in the past few months. Early signals of bumper production for this year were visible from February onwards. Prices, however, started reacting only from March.
While the March and May prices fell in line with past seasonality patterns, record Turmeric arrivals caused prices to buck the past seasonality trend for the month of April.
Turmeric prices tend to fall during March and May every year on the back of new stock arrivals in the market. For the past 5-years, the average drop in Turmeric prices for March and May was 7.25 percent and 4.15 percent respectively.
On the other hand, Turmeric prices moved up during April every year. The average gain in Turmeric prices for April was 1.05 percent for the last 5-years.
In 2017, fall in Turmeric prices in March and May first half was more pronounced than the 5-year average drop in prices for these two months.
In March this year, Turmeric prices fell 8.70 percent. As on May 16, 2017, Turmeric price was down 7.59 percent when compared with April closing.
However, Turmeric prices deviated from historical trend by falling 3.50 percent during April amid record stock arrivals.
As on May 16, NCDEX Turmeric prices was down 18.58 percent from February closing. By analyzing seasonality patterns and market arrivals, one could have spotted an opportunity to short NCDEX Turmeric in February and book handsome profit subsequently.
Heckyl Seasonality and Market Arrival screen can help in understanding business cycles for various commodities. At the same time, seasonality screen unearths key insights from historical price behavior.
Most importantly, traders can discover various patterns within commodities using seasonality screens. They can use these historical patterns to forecast future price trend and prepare appropriate trading strategies.
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