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Curry futures launched in SMX

Curry futures launched in SMX


Futures for McDonald’s curry sauce packets surged on the day of launch as investors worried about short-term supply due to hoarding.

Front-month curry for October delivery settled 5% higher at $43.1 a lot (100 packets) on the Singapore Mercantile Exchange (SMX), while trading volumes were reasonable. 3000 lots have been traded so far, putting the total value of traded curry at nearly S$13,000.
Established on Thursday after the international fast-food chain decided to limit free nugget sauce packets to two per customer — each additional packet would now cost an extra 30 cents — the SMX believes that the demand inelastic nature of curry sauce enables it to serve as a good basis for futures trading.

MacDonalds also charges customers for their nugget sauce in Japan, the US and Australia.

“Everyone flew into a panic in February this year when curry sauce went out of stock,” said a spokesperson for the SMX.

“With this trial pricing of the sauce, who knows how much it might cost in future. Futures contracts allows curry sauce aficionados to have a definite supply of the commodity, and also allows for speculators to make some cash from the frenzy,” he said.

Some are not so optimistic about the future of curry futures, however. They pointed out that other types of curry, such as roti prata curry and a mixture of McDonald’s chilli and tomato sauce could serve as substitutes should consumers not wish to pay for the curry sauce packets.

“There definitely was some technical buying this morning, that contributed to the rally. But I don’t think that’s going to last,” said Mai Dang Dang, a broker at IEAT futures.

“I think the surge could be driven by some Indian buying interest,” said Hum Bur Ger, senior vice president at Omnomnom, a brokerage firm. India is one of the world’s top curry consumers and Singapore has a sizeable Indian expatriate population.

Only curry sauce is involved in the contract. No BBQ sauce or any other nasty stuff like Sweet N Sour sauce will be traded as the demand for those sauces are decidedly lower.