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NCDEX jeera (cumin)futures dipped below ₹39,500 a quintal on profit booking and lower demand at higher levels.
Jeera prices had rallied close to ₹42,000 a quintal in the last two months on the back of crop damage impacting the yield and robust demand from domestic and international markets, especially from China ahead of its holiday season.
One of the reasons for the decline in jeera futures could be higher exchange margins, which are making traders skeptical about buying at current levels, said Kedia Commodities. Moreover, with prices soaring to new highs, traders are cautious about taking fresh positions, which is adding to the selling pressure.
Another factor that could be contributing to the decline in jeera futures is the impending China holiday, which is expected to pause the demand from China, one of the biggest buyers of Indian spices.
With China being a key market, any slackening in demand can lead to a downward trend in prices.
Long-term outlook
However, despite the short-term weakness, the long-term outlook for jeera futures remains positive, given the supply-demand dynamics.
India is the largest producer and exporter of jeera in the world, and with the crop yield damage, the supply is expected to remain tight. Moreover, the increasing demand for Indian spices in international markets is likely to support prices in the long run.
With the current uncertainty and cautiousness among traders, the market may continue to experience some selling pressure in the near term, it said.
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