Jeera prices drop as traders adopt ‘hand-to-mouth’ policy

Jeera (cumin) prices have dropped from the record highs of over ₹65,000 per quintal in the futures market as traders have opted to buy stocks only to meet immediate requirements.

“We have stayed away from stocking jeera in view of the high prices. We have adopted a hand-to-mouth policy to meet immediate requirements,” said  Ankit Agarwal, Director of Erode-based Amar Agarwal Foods India Pvt Ltd.

“Jeera demand has slowed as prices have soared. In view of this, prices have dropped. But there will not be any big fall below ₹55,000 a quintal. Nor will there be a big rise past ₹65,000,” said  Arvind Patel, former president of Unjha Chamber of Commerce (UCC).  

Bulls exiting

“With the sowing of the crop set to start, bullish speculators are exiting. However, jeera will continue to be volatile over the next few weeks, at least until a clear view on the sowing is available,” said  Jagdeep Garewal, an analyst in the spices trade. 

On the National Commodities and Derivatives Exchange, jeera November futures increased by ₹565 to ₹59,700 a quintal on Wednesday. Spot prices at Unjha, the hub for jeera trade, were quoted at ₹59,100.75 a quintal. 

According to data from Agmarknet portal, a unit of the Ministry of Agriculture, the modal price (the rate at which most trades take place) at the Unjha agricultural produce marketing committee yard on Tuesday was ₹56,200 a quintal. 

Prices recovered on Wednesday after dropping by the maximum permitted level of four per cent each on Monday and Tuesday. 

Who’ll blink first

“It is bulls versus bears on the jeera counter waiting for one another to blink first. The tussle could culminate once the sowing figures become available,” Garewal said. 

Sowing of jeera commences during October and the harvest is due after February. “We expect the area under jeera to gain by at least 50 per cent with growers, probably, switching from dhaniya (coriander),” Agarwal said. 

Stockists and traders in a “wait and watch” mode with most liquidating the stocks that they had kept with them from last season or the previous one, a trader said. 

“No one is buying for the future requirement. I will not predict how prices will behave for the next one month. There will be uncertainty and volatility,” said Garewal.

Patel said prices are expected to hover between ₹55,000 and ₹65,000 over the next couple of weeks. Agarwal said if the area under cumin increases, as expected, by 50 per cent then the commodity could drop to the lows of ₹30,000. 

Sowing may double

The trade expects the area under jeera to increase by at least two times. Sowing details are expected to be available around Diwali.   

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

In January at the International Spice Conference, jeera production, which dropped 20 per cent last season to 3.88 lt, was projected at 4.14 lt in the current season. The global production was pegged higher at 4.35 lt against 4.08 lt. However, net supplies from India were estimated 7 per cent lower and prices were expected to remain bullish, said a report prepared by ITC Ltd.

According to the Spices Board, jeera production has been estimated at 6.27 lakh tonnes in 2022-23 against 5.55 lakh tonnes a year ago. Exports in the 2022-23 fiscal have been pegged at 1.86 lakh tonnes against 2.16 lakh tonnes a year ago.