The jeera market is on the upswing after several years due to lower sowing in Gujarat and Rajasthan. The prices would have moved up further but for the record carryover stocks in the pipeline, traders said.
The market could move up further if the weather plays truant in the coming days. Jeera is a winter crop sown from October and yield mainly depends on the rains. India is the world’s largest producer and consumer. While India consumes 75-80% of the commodity produced, other producing countries export most of the product.
Sudha Acharya of Kotak Commodities is bullish on the commodity, given lower acreage and robust demand. She estimates production to be lower by around 25% from last year’s production of 6.7 lakh tonne. Sowing for the crop harvested in 2015 has been delayed by a month in Gujarat and Rajasthan. Low prices amid a shift in acreage to other remunerative crops have led to lower sowing of jeera. “Any further disturbance in environment could lower yield further. But for the record carryover stock of 1.5 lakh tonne, the market would have moved up higher,” she said.
Spot prices on Tuesday evening at the NCDEX counter recorded R12,931 per quintal. Kotak reports that domestic jeera spot prices during February and November 2014 witnessed high volatility.
“From the lows jeera prices have rallied nearly 18% in 2014. The season started on a bearish note and prices witnessed a steep fall of 17% to trade near five-year lows. The prices at the benchmark Unjha market made a low of R10,246 per quintal in April,” a Kotak source said.
Hareesh V, senior analyst from Geofin Comtrade, feels jeera prices are expected to edge higher on firm export demand from India in the midst of reports of a supply crunch from top producers Syria and Turkey. Depleting supplies to major spot markets and anticipation of a drop in acreage is also likely to prop up prices in the immediate run.
Kotak estimates total demand to rise by 13% to 4.7 lakh tonne.”Jeera prices at domestic spot markets traded near five-year lows to attract domestic as well as export demand. Low prices since in the last three years have lowered adulteration by masala makers, thus increasing domestic consumption by 15% year on year to 3.5 lakh tonne,” Sudha said.
Geo-political tensions in Syria and Turkey have led to a supply crunch.