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Suresh P. Iyengar

Prompted by investors opting to book profit

Mumbai June 13 After a rally of over Rs 2,200 a quintal within a fortnight, jeera (cumin seeds) futures on NCDEX witnessed steep correction on Wednesday, prompted by profit booking by investors.

Jeera for July delivery fell Rs 650 a quintal to Rs 12,806, while August contract crashed by Rs 766 to Rs 12,803 on NCDEX. The July contract clocked a turnover of Rs 398 crore, while August contract traded Rs 146 crore.

Profit Booking

Jeera futures have risen from Rs 11,640 on May 23 to Rs 13,875 on June 11, jumping by Rs 2,235. Prices in Unjha spot markets dropped by Rs 50 to Rs 13,400 a quintal on Wednesday.

Traders in Unjha had moved commodity markets regulator Forward Markets Commission to raise margins and curtail open positions to rein in the runaway jeera prices.

"The fall in jeera futures are due to profit booking by traders, but the fundamentals support a bullish trend with both domestic and global production expected to fall steeply. FMC will be meeting on June 18 to consider Unjha traders plea," said Mr Harish Galipalli, Head of Research, Karvy Comtrade. Jeera production in 2007 is estimated to be around 35,000-45,000 tonnes against 1.2 lakh tonnes last year. Unseasonal rain in Rajasthan during the harvest period (January-February) damaged crops and hit the output badly.

Jeera production in Turkey during current season 2007 is projected to be around 25,000 tonnes compared with previous year's production of about 45,000 tonnes.

Unfavourable weather conditions and crop damage due to rain has resulted in lower production in major countries like Turkey and Syria. In Syria production is expected to be around 7,000 and 8,000 tonnes and carry forward stocks are only around 1,000 tonnes, which indicates severe shortage of supply in the global markets.

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Jeera futures witness correction

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