Ahead of the season’s fresh arrivals of jeera (cumin seed), the crops price trend is looking bearish on positive crop prospects. Market experts and traders maintained that the bearish trend will continue with positive crop prospects due to favourable weather conditions.
On the NCDEX futures, Jeera for near-month expiry quoted at ₹16,500 a quintal, down by ₹455 on Wednesday. In the spot market at Unjha, where the first few bags of jeera arrived, the spice quoted in the range of ₹14,500-18,000 a quintal, with arrivals of about 4,624 bags (each of 55kg).
“Due to water shortage in parts of the growing regions of Gujarat, there will be some impact on the crop in the State. But Rajasthan appears good. So, the overall crop condition appears fairly balanced. The crop growth is good but the next 2-3 weeks will be crucial,” said Biren Vakil, a commodity expert from Paradigm Commodities in Ahmedabad. Vakil further stated that an unexpected adverse weather event can dramatically change the situation.“The price trend is currently bearish and we are expecting a good crop,” he added.
According to Spices Board data, India's spices output for the year 2017-18 was estimated at about 5 lakh tonnes, including 2.91 lakh tonnes from Gujarat and 2.06 lakh tonnes from Rajasthan. Trade estimates suggest about 10 per cent carry-over stock from the previous crop.
Smaller sowing area
The latest Gujarat government data has reported jeera sowing at 3.47 lakh hectares — about 10 per cent lower than last year’s sowing of 3.82 lakh hectares.
According to the projections made by farmers and traders, this year the jeera crop in Gujarat will be 10 per cent lower than last year, while in Rajasthan it will remain mostly unaffected.
Apart from production estimates, the prices will also take a cue from the export market. Spices Board data showed India exported 1.43 lakh tonnes of jeera in 2017-18.
Notably, earlier this week, the weather had turned cloudy, with unseasonal showers covering some of the growing regions in Saurashtra. This caused concerns about possible crop damage. However, sector experts noted that the damage is not significant and will not impact the overall crop provided the weather remains favourable in February.
“The crop condition is good. Still there will be a dip by about 10 per cent, primarily due to the decline in the sowing area. The climate was not too supportive in the early months of sowing, therefore the crop arrival is somewhat late,” said Arvind Patel, a leading Unjha-based trader.
“Crop variation of 5-10 per cent is normal and can be compensated by the similar carry-forward stock of last season. So, we don’t see any reason for bullish sentiment in prices. We expect prices may hit the bottom level of ₹15,000 a quintal during the season, whereas the upper level is subject to factors such as exports and local demand conditions,” said Patel.