Dhaniya sees strong rally

Dhaniya futures on the NCDEX platform surged for the second consecutive week. Expectations of less area under cultivation helped the price rally. Besides, slowdown in supply at major physical markets due to lean season and below-normal soil moisture content across growing regions of Gujarat, Rajasthan and Madhya Pradesh also supported dhaniya prices to trade higher at both spot and futures markets. The most active December contract surged to a six-month high of ₹5,500 per quintal on Thursday before closing the week at ₹5,333, up four per cent for the week. Prices in the spot market were up by ₹300 to ₹475 per quintal .

Outlook

The futures are likely to continue to trade positive in the coming week. Prices may trade slightly lower in the beginning of the week due to profit booking. However, the uptrend is expected to resume subsequently. Supply is expected to decline further at major cash markets while most of the materials are medium to lower quality. Moreover, expectations of a sharp decrease in sowing acreage under dhaniya due to lower returns in the last harvest may support dhaniya futures to trade higher. Slower pace of sowing activity due to dry weather conditions in major sowing regions is also supportive for dhaniya futures in the short to medium term. Hence, considering the above factors, we expect dhaniya futures to trade higher in the coming week.

The writer is Head-Commodity Research, Karvy Comtrade