Jeera (cumin) prices are moving higher again during the current peak arrival season, as witnessed last year.

In 2015, Jeera prices touched an all-time high in May, as output was affected by unseasonal rains, which hit during harvest in Gujarat and Rajasthan.

Similarly, in 2016, prices on the National Commodities and Derivative Exchange (NCDEX) have been surging due to good export demand on availability of higher quality jeera and reports of yield loss in Saurashtra region of Gujarat, as unseasonal rains hit during March. Arrivals in Gujarat physical market have declined as compared to last year.

Price Surge

In 2016, spot and futures touched its lowest level in one year during first week of February on expectation of bumper harvest on reports of higher sowing acreage and favorable climatic conditions in top jeera producing states.

However, prices recovered more than 32.4 per cent to ₹17,400 per quintal on NCDEX from its lowest levels of ₹13,150 levels on reports of lower yield, good export demand and dwindling arrivals. Lower yield Gujarat is the top cumin producing state followed by Rajasthan. As per the final rabi sowing report, Gujarat has cultivated about 10.8 per cent more area in 2015-16 at 2,95,400 hectares compared to 2,66,700 hectares last year. There was delayed sowing due to lower soil moisture during October 2015 while warmer weather during January-February affected the flowering setting which expected to affect crop productivity.

As per third advance estimate of Gujarat State for 2015-16, production pegged at 2.13 lakh tonnes (lt) higher by about 7 per cent forecasted in revised fourth advance estimate for 2014-15 at 1.97 lt.

In Rajasthan, jeera output expected to be lower this year, compared to last year due to hot weather and lower acreage.

In the current financial year, jeera exports were lower until January compared to last year. According to Department of Commerce data, the export of jeera during first 11 month of 2015-16 (Apr-Jan) is 71,983 tonnes, compared to 1, 37,742 tonnes during the same period last year. However, exporters were active during February, March and April due to improved in quality supplies on favorable weather during the harvesting season in both Rajasthan and Gujarat.

Export demand expected to pick up further in May before monsoon rains in June, because physical movement can be interrupted and may affects quality. During last three years, major volumes of export were happening during March to August. Therefore, it is expected that the export might pick up in coming months.

New season jeera arrivals are lower in Gujarat domestic market in the current year. As per Agmarknet data, during March and April 2016, jeera arrivals were down by 15-20 per cent in physical markets in Gujarat.

Price outlook

Prices are moving higher on fear of lower-than-expected production and slower arrivals, coupled with good export demand as supplies from Syria and Turkey will arrive only during September-October. Moreover, there is good demand from traders for domestic consumption.

We expect jeera prices to touch ₹17,900-18,200 per quintal in next two-month period.

The writer is Associate Director (Commodities & Currencies Business), Equity Research & Advisory, Angel Broking. Views expressed are personal.

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