Jeera is facing a bearish market due to higher supply in the domestic market. Higher exports due to problems in other jeera producing countries can only help to a certain extent due to the large difference in supply and demand. India is the world?s largest producer and consumer of jeera. While India consumes 75-80% of the commodity produced, the other producing countries export most of the product.
Jeera is expected to witness supply glut situation for third year in a row with this year?s?production estimated at 3.7 lakh tonne, which is 16% higher than 5 year average but lower than last years (2011-12) record output of 4.6 lakh tonne, Fayaz Hudani, analyst from Kotak commodities said. ?Total supply for the year is expected to be higher by 5% at 5.3 lakh tonne while the total demand is expected to rise by 7% to 3.9 lakh tonne. Stock to usage ratio is forecasted at 38% higher than 5 year average of 20%,? he added.
According to Fayaz the outlook for next quarter is range bound with a downward bias with exports being the sole support. Spot price at Unjha at the NCDEX counter stood at Rs 13626.3 per quintal on Wednesday evening. Angel Commodities reports that jeera may trade with a negative bias on account of higher supplies and good rains in the jeera sowing regions. However, overseas demand may support prices at lower levels. CP Krishnan of Geojit Comtrade says that exports from India in the first two months of the current financial year are estimated to be at 21000 tonne and higher when compared to the same period of last year. ?Prospects of rise in export orders due to lower output in Syria and Turkey are likely to limit the sharp fall in prices ,? he added.
According to state-run Spices Board exports of Jeera in 2012 -13 stood at 79,900 tonne, an increase of 75% over the previous year. Indian exports have witnessed a CAGR of 9% over last 5 years. Exports account for nearly 20% of the total demand in country. Besides India, cumin seed is cultivated in Iran, Turkey and in Syria mainly for exports. The new crop in Syria and Turkey is harvested in August?September, so until then, Indian cumin seed will find good market in overseas countries. The harvest period in India for cumin starts around February-March. Kotak reports that the significant surge in exports is mainly due to low supplies from Syria and higher domestic production. ?For the year 2013 so far there has been no improvement in the political situation in Syria and political tensions are also emerging in Turkey. Exports will also get help from Indian rupee?s depreciation against the US dollar. Weaker domestic currency makes exports competitive in global,? Fayaz added.