Agri Business

Jeera splutters due to low demand

Ahmedabad | Updated on July 13, 2020 Published on July 13, 2020

Local prices reflect depressed global scenario as supplies seem set to surge

Brightened jeera (cumin seed) crop prospects coupled with weakened international prices have pushed domestic prices to a near-bottom, at around ₹12,500-13,500 per quintal, at the Unjha spot market. The off-take remains slow with thin purchases by the bulk consuming sectors of restaurants, hotels and caterers and slow progress on exports as against last year.

International jeera prices have fallen, too, hovering in the range of $1,780-1,800 (FOB rates) per tonne, about 35-40 per cent lower than what was quoted in the same period last year. Trades on the commodity exchanges in the spice commodity showed weakness with NCDEX jeera futures for July delivery quoted at ₹13,755 on Monday, paring about one percentage point from the previous close.

Notably, since December 2019, jeera prices have been on a slide falling from ₹14,500 levels. The arrivals, however, are said to be moderate at abut 20,000 bags (each of 50kg) due to monsoon effect and slow off-take amid demand disruptions due to Covids-19.

The Unjha market has announced that due to Covid-19, jeera auctions will be held only alternate days to avoid crowding and congestion at the yard. “There is not enough demand from the domestic market. We are seeing that international prices are also suppressed as supplies are believed to be higher this year. Afghanistan has come up as a competing country for us in the European market, with its about 7,000 tonnes of crop. Turkey and Syria are also believed to have no reports of damage so far. So, they will have good quality jeera with them at lower rates than last year,” said Mitesh Patel, Chairman, Federation of Indian Spice Stakeholders (FISS).

As per the trade estimations, Syria’s crop is likely to be around 25,000 tonnes, while that for Turkey will hover around 10,000 tonnes.

International market

While there is no confirmed data from the Spices Board on India’s jeera export during the April-June period of 2020, traders believe India has so far shipped around 40,000 tonnes of jeera, as against 55,000-60,000 tonnes recorded in the same period last year. This indicates a lower offtake at the international market, too, even as the supplies are likely to increase with India sitting on higher crop.

India’s jeera crop is estimated to be 29 per cent higher the previous year. The estimated production for 2020 is estimated at 5,35,500 tonnes, as against the estimated 4,16,600 tonnes in 2019, FISS data showed in crop projections earlier this year. The overall yield is estimated to be about 522 kg per hectares with a marginal increase of 3 per cent over the previous year.

Total acreage

The total area under jeera has increased by about 25 per cent at 10,25,600 hectares. Gujarat has witnessed a 40 per cent jump in the acreage to 4,39,830 hectares for 2020 as against 3,15,000 hectares last year. Rajasthan reported a 16 per cent increase in the cumin seed area at 5,85,770 hectares as against 5,06,000 hectares last year.

Farmer sources revealed that since there is thin buying at trade at the mandis with amid weak prices, there is no rush in selling the produce. “Monsoon and worries over Covid-19coronavirus infections is hampering the transport and trade. So there are slow arrivals at present,” said a jeera farmer from Saurashtra.

Vijay Joshi from Vijay Exim at Unjha said the market is currently under pressure due to slow off-take at the local level. “But exports are continuing with hand-to-mouth buying. We expect exports to pick up as more countries come out of lockdown and consumption picks up,” he said. He added, “Current price level at both international and domestic markets looks to be at bottom and there doesn’t appear any immediate further downside. So it will hover range-bound for some time before consumption lifts later in the year.”

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Published on July 13, 2020
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