Lower stock, strong exports keep jeera prices firm

Lower carryover stock coupled with higher export demand may push up jeera prices, as traders fear tight supply conditions in the coming months.

The carryover stock has dipped to about 2 lakh bags (each of 55 kg) as against the normal 20-25 lakh bags, thereby reducing the availability even as the demand for exports and domestic consumption remains firm, trader sources said.

Turkey and Syria, India’s key competitors in the international market, are less likely to add supplies as the production in these countries is believed to hover at around 12,000 tonnes and 20,000 tonnes, respectively.

This is seen as a major boost for Indian jeera exports, which are likely to hover around 1 lakh tonnes, up marginally from the previous year. Jeera production in the country is likely to be around 3.4-3.8 lakh tonnes, which is about 10-12 per cent lower than last year. Jeera output had risen as high as 4.45 lakh tonnes in 2013-14.

Prices firm

“The carryover stock is almost nil — the lowest level in the past decade. This is mainly on account of the reduced crop. Also, Turkey and Syria are not likely to add significant volumes to the global market,” said stated Ashwin Nayak, a member of the Seed and Spice Stakeholder Association (SSSA).

“Moreover, arrivals from these countries will not happen before June. So, our exports will remain strong and keep prices firm,” added Nayak.

Traders expect domestic demand to jump around May-June, and fuel prices further.

A Mumbai-based exporter noted that prices are likely to remain volatile, as speculators may take command over the price movement amid a tight situation.

At the Unjha market, spot jeera quoted at ₹173-175 a kg or ₹17,330 a quintal.

However, analysts maintained that prices may hover in the range of ₹16,000-22,200, a price that will set a new record.

Jeera prices peaked at ₹19,480 around August last year, but later corrected to a low of ₹17,172 in October on robust sowing.

In its February 2017 report, Angel Commodities projected positive movement for Jeera futures on anticipation of higher demand for the new crop.

“There is a forecast for a fall in jeera production by 12 per cent to 387,000 tonnes in 2016-17 due to lower acreage... We expect Jeera futures for March delivery to trade positive on anticipation of good export demand for new season arrivals coupled with reports of lower acreage compared to last year,” it noted in the report.

On the NCDEX, Jeera futures for immediate delivery touched an intra-day high of ₹17,295 on Wednesday. The far month June contract touched a high of ₹17,635, thereby indicating a firm trend ahead.

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