Jeera prices remain stable but farmers bet on festive demand

Written by Sandip Das | New Delhi | Updated: Jun 2 2012, 06:30am hrs
With a steady supply from farmers, wholesale prices of jeera (cummin) at Unjha the hub of the countrys trade in the spice have remained stable for the last few weeks.

According to traders, farmers from Gujarat and Rajasthan are holding on to their stock in anticipation of the festive demand from August and are bringing in only 8,000 to 10,000 bags (of 20 kg each) to the market daily. At the start of the season in April, farmers used to bring close to 30,000 bags daily. According to trades sources, jeera production during the current year is expected to cross 35 lakh bags (60 kg a bag) from 29 lakh bags reported this year.

At present, the wholesale jeera price at Unjha is in the range of R2,500 R2,600 per bag (20 kg each). The prices were in the range of R2,900 R3,000 per bag for superior quality jeera at the beginning of this year.

Because of bumper production, farmers are gradually releasing the stocks and they will continue to bring in produce till Diwali, Unjha's Market Yard Merchant Association president Manu Patel told FE.

The price movement would also depend on the output in other jeera-producing countries like Syria and Turkey, where sowing has been completed, he added. Jeera prices on Friday traded lower by R125 to R12,890 per quintal in futures market. At the National Commodity and Derivatives Exchange, jeera for delivery in June declined by R125, or 0.98%, to R12,890 per quintal. Similarly, the spice for delivery in July went down by R97.50, or 0.73%, to R13,310 per quintal. Analysts said speculators sold their positions on the back of a weak export demand.

Traders are bullish that exports from the country are expected to rise significantly during the year. Demand from the US and EU could also rise in the coming weeks as a drop in production is expected in Syria and Turkey. For the next few months, the global demand of jeera has to be met from the countrys stocks, another trader noted.

The latest data from the Spice Board of India indicate that declining trend in jeera exports during the last few years would be reversed in the current fiscal. The value of jeera exports has declined to R397 crore during 2010-11 from R544 crore reported during 2008-09.

India is the largest producer, consumer and exporter of jeera, with Rajasthan and Gujarat contributing to more than 90% of the total output. Jeera is grown as a rabi, or winter crop, as the crop needs cooler conditions for better yield.