Jeera (cumin) prices have staged a rebound in the domestic market over rising tensions in West Asia, especially after the recent US airstrike on Syria, the second largest producer of the spice.

Over the past few days, jeera prices have resumed an uptrend in both the spot and futures markets. The prices had hit a peak of ₹18,721 a quintal in the spot market in early January after a sustained uptrend, but slipped in subsequent weeks to touch a low of ₹17,363 on March 10, before staging a rebound in early April.

On Tuesday, spot jeera prices hovered around ₹18,694 in Unjha, while on the National Commodity & Derivatives Exchange (NCDEX) jeera futures hovered around ₹19,810 for the August 2017 contract.

Experts, however, believe the upside in jeera is being driven by speculation and hoarding by stockists, who have set eyes on new peak levels for jeera in the next few weeks. “The stock is held by traders, investors or hedgers to gain a price benefit. We are seeing buying at every level of the price. Hence, we can't rule out fresh highs for jeera in coming days,” said Bhaskar Shah, managing director, Jabs International.

Traders estimate India’s jeera crop output will be around 2.5 lakh tonnes, lower than the 3.75 to 5 lakh-tonne estimates put out by experts.

Even at the lower crop estimate, jeera exports are projected to range between 100,000-150,000 tonnes, for the year.

“Exports will happen in spite of higher prices because there is no supplier of jeera available globally. Syria has a significant share at 30,000-40,000 tonnes, while Turkey is very small at 10,000 tonnes.

But that can come post July. Domestic consumption will shoot up ahead of the Ramadan month, around May. So, there is sufficient fuel for a rally in the near term and prices will sustain at the upper level till there is some clarity on the Syrian supplies by July,” said Shah.

Former Unjha Chamber of Commerce President Arvind Patel stated that looking at the war situation in Syria, a possible adverse impact on jeera sowing could leave the world depending only on the Indian crop.

“Going forward, arrivals will shrink. After reaching a peak of 45,000-50,000 bags (each of 55 kg), arrivals at Unjha, have fallen to about 25,000-30,000 bags now and will shrink further to about 5000-10,000 bags by May. In the wake of high demand and reducing supplies, we expect a fresh peak levels in Jeera prices in the coming weeks,” said Patel.

Considering the high volatility in prices, NCDEX had put a 5 per cent additional margin on all futures contracts, including active as well as yet-to-be-launched contracts on both buy and sell positions.

“The month of March is the highest arrival month for the jeera, while in the months of April and May, the arrivals will be comparatively less and gradually diminishing. Going forward, the movement of jeera will depend mainly on domestic consumption demand, the monsoon forecast and export demand throughout the season,” said Ritesh Kumar Sahu, Fundamental Analyst — Agri Commodities, Angel Commodities Broking.

“We expect that Jeera prices for May delivery may trade higher from the current levels of ₹19,030 to touch ₹20,000-20,500 per quintal in the coming months.

However, the price may consolidate near the ₹19,500 level if export demand remains subdued because of higher prices in the domestic market,” stated Sahu in a report.

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