No real spurt in jeera prices seen despite low output

Written by RajeshRavi | Kochi | Updated: Nov 7 2012, 08:03am hrs
Reports of lesser sowing of jeera and good export demand are likely to support the market despite good carryover stocks. Demand for jeera is expected to go up in the coming days. Problems in Syria and Turkey have raised concerns on supply from these origins.

Reports of lesser sowings have affected the sentiments. Lesser soil moisture would lower the yield in coming season. Demand is robust and fundamentals indicate a firmer market. But the carryover stocks from last season prevents a rally, Vedika Narvekar, analyst at Angel Commodities told FE. She feels the market may remain at the current level. Production of Jeera in 2011-12 is expected to be around 40 lakh bags compared with 29 lakh bags in 2010-11 (each bag weighs 55 kg).

According to Angel Commodities report, nearly 75% of the export target has been achieved due to a supply crunch in the global markets. Supply concern from Syria and Turkey still exists. It is expected that export orders may be diverted to India from the international markets due to lack of supplies from Syria. Production in Syria and Turkey is being reported around 17,000 tonnes, which is 4,000-5,000 tonnes less than expected, Vedika added. According to Spices Board of India, exports of jeera in April 2012 stood at 2,500 tonne compared with 2,369 tonnes in April 2011, an increase of 6%. Data show domestic prices are co-related to exports. Higher exports have translated into firmer domestic market. Besides India, cumin seed is cultivated in Iran, Turkey and Syria mainly for exports.

Faiyaz Hudani at Kotak Commodity Services does not support the view and is bearish on the market. Demand is not good and stocks are ample. Estimates on sowing will be known only after Diwali, he said. Jeera spot price at Unjha closed at R15,023 per quintal on Tuesday.

The harvest period in India for jeera starts in February-March. The country is the worlds largest producer and consumer of jeera. While India consumes 75-80% of the commodity produced, other countries export most of the product. The global market for jeera shows a lower pressure during June-August due to arrival pressure from Syria, Turkey and Iran.