Jeera (cumin) futures plunged by over ₹1,000 a quintal on Wednesday as profit-booking set in, with some analysts saying prices have gone to levels that would keep off consumers.

On NCDEX, where the spice’s contracts are traded, October futures plunged by ₹2,785 to ₹56,600 before paring its losses to end at ₹58,075 a quintal — down ₹1,310. 

At Unjha agricultural produce marketing committee (APMC) yard, the primary market for jeera, prices dropped to ₹54,125 on Wednesday against ₹57,850 on Monday. 

Retreating from record high

“Jeera prices are seen retreating on NCDEX after hitting a record high of ₹63,540 a quintal earlier this month. Profit-booking has set in after the recent rally,” aid Anu V Pai, commodity research analyst at Geojit Financial Services.

“Those who entered the jeera futures contracts earlier are exiting. Profit-booking like this will happen until fresh arrivals begin in February-March,” said Jagdeep Garewal, an analyst in the spices trade. 

“Domestic and export demand for jeera is slacking at these high prices. Moreover, jeera has been imported from China over the past month. So, prices are declining,” said Arvind Patel, former president of Unjha Chamber of Commerce (UCC). 

“Though there is profit-booking, jeera prices will recover. Exports are being made under advance licence for re-exports of value-added products,” said Ashvin Nayak, founder-chairman of Federation of Indian Spice Stakeholders (FISS). 

Factors weighing in

“At higher levels, buyers are not interested. Also, buyers are aware that this year jeera sowing will increase when it begins at the end of October,” said Biplab Sarma, Senior Research Analyst at AgriWatch.

In jeera, trading happens according to requirements of the buyer, he added.

Garewal says that it is not surprising to see jeera futures plunging. “Things will continue this way until at least sowing begins and trade gets to know exact details,” he said.

“Besides imports from China, there is not much export demand,” said UCC’s Patel. 

Geojit’s Pai said subdued export demand at higher prices and expectation of rise in supplies in the global market is weighing on domestic jeera. 

“Cheaper supply from Syria and Turkey in the coming days could affect export demand. Yet, firm local demand and lower domestic supplies may provide support,” she said. 

Warehouse stocks up?

FISS’ Nayak said Chinese prices were ₹66,000 with the Indian prices too ruling at around the same level. “Prices should not decline much. They should start rising again,” he said. Also, stocks in warehouses may have increased resulting in higher sales.

“Once sowing details are available, prices will begin descending, though volatility will continue. On the higher side, the volatility will be less,” said Garewal. 

Jeera prices have almost doubled since the beginning of this year as unseasonal rains in March and heatwave in April affected the standing crop, particularly in Gujarat and Rajasthan.

In January, jeera production, which dropped 20 per cent last season to 3.88 lt, was projected at 4.14 lt in the current season. As a result, global production was pegged higher at 4.35 lt against 4.08 lt. However, net supplies from India were estimated seven per cent lower and prices were expected to remain bullish, said an ITC  report.

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