Lower production of jeera and quality issues due to atypical rains may lead to a more firm market for jeera, traders said.
Lower production of jeera and quality issues due to atypical rains may lead to a more firm market for jeera, traders said. New crop of jeera is anticipated to be lower in both Rajasthan and Gujarat, but poor quality of the stock on sale has led to a sluggish demand. Jeera is a winter crop, sown from October, and the yield mainly depends on the rain. Currently, the market prices for the commodity are seen higher by 30-40% when compared year-on-year. 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.
“Erratic rains in the jeera-producing states could lead to a lower production and damage the quality. The forecast of rains in Rajasthan is causing concern on the standing crop of jeera,” Sudha Acharya of Kotak Commodities told FE. Atypical rains have already damaged some crop in both the states. She feels that the farmers are liquidating their stocks due to higher return when compared year-on-year.”Arrivals are high in the market and quality is on the lower side. Demand is sluggish due to quality issues and resistance at the current price level. Market may ease in the near-term due to resistance but fundamental support a firmer market in the medium to long term,” she added. Low prices amid shift in acreage to other remunerative crops have led to lower sowing of jeera.
Spot prices on Wednesday evening at the NCDEX counter recorded R15,287.85 per quintal. Prices have risen by 40% year-on-year in the futures market from R10,500 per quintal to R14,000 per quintal, according to the Kotak report.
The Angel Commodities report that jeera futures may trade on mixed to positive note, as there is a good demand for exports. The retailers and stockists are also buying at the current market prices on an anticipation of lesser arrivals in coming month on anticipation of lower production.
However, arrival pressure may cap the price rise, Angel report says.
Geo-political tensions in Syria and Turkey have led to a supply crunch in the global markets, raising supply concerns from the two major exporting countries. Export orders are diverted to India. Production is also expected to fall in Syria and Turkey due to crop failure. Jeera exports stands at 87,500 tonnes in the first six months (April-September) of 2014-15, a rise of 25% from the corresponding period of the previous fiscal.