Jeera (cumin) prices will likely head south further after dropping 50 per cent from the record high of ₹65,000 a quintal witnessed in August on the National Commodities and Derivatives Exchange (NCDEX) as supplies are expected to rise in 2024.
On Thursday, jeera futures expiring in March were quoted at ₹32,500 a quintal, while spot rates at Unjha, the hub of the spice in Gujarat, were quoted by NCDEX at ₹39,314.20.
According to Agmarknet.in, a unit of the Ministry of Agriculture, the modal price of jeera (the rate at which most trades take place) was ruling at ₹36,500 a quintal.
“Prices have declined basically since the area under jeera has increased sharply by over 60 per cent from last year’s level,” said Ankit Agarwal, Director of Erode-based Amar Agarwal Foods India Pvt Ltd.
Weak sentiment
“The overall sentiment in the jeera spot markets is reported weak. Increased supply in the spot markets put a cap on jeera’s prices. Prices mostly corrected in the spot market, but current prices are still higher than normal, particularly compared with the same period a year ago,” said Biplab Sarma, Senior Research Analyst, AgriWatch.
Jeera prices have retreated from the record highs and hit their lowest level in more than eight months on NCDEX. Decline in exports and jump in acreage is weighing on jeera futures, said Anu V Pai, Commodity Research Analyst at Geojit Financial Services.
According to Gujarat Agriculture Department data, as of December 11, jeera has been sown on 4.34 lakh hectares (lh), up 93.5 per cent compared with 2.24 lh a year ago. The normal area (three years average) is 3,50,666 hectares, said Sarma.
Pai said according to Rajasthan agriculture department, jeera has been sown on 6.51 lh as of December 13 compared with 5.62 lh a year ago.
Shift from coriander
Agarwal said many areas that usually grow coriander (dhaniya) have yielded space to jeera.
Sarma said the area under jeera will likely increase by 30-35 per cent based on current trends, potentially coming at the expense of other competitive crops such as coriander. New areas may also come under cultivation.
Agarwal said the weather has been good for the crop with no issues in the crop areas.
Pai said though the rise in acreage is weighing on jeera, weather conditions and yield will be in focus with the threat of El Nino looming.
“It will be a decisive factor in determining prices in the coming days along with export demand.” the Geojit Financial Services commodity research analyst said.
Festivals, marriages to limit fall
Sarma said in the long-term, AgriWatch expects jeera prices to decline. “This expectation is based on the anticipation of farmers shifting to cumin due to higher realisation, which could affect the overall market and lead to price declines,” he said.
Agarwal said jeera prices could drop another ₹1,000 a quintal, they may not drop below ₹25,000. “We expect prices to stabilise around that level,” he said.
Pai said festival and marriage season demand will limit the fall in jeera prices.