Low demand, hand-to-mouth buying may hold jeera prices on leash

Jeera (cumin) prices will likely be range-bound over the next few weeks as low and hand-to-mouth buying could counter low stocks.

“The festival season demand is likely to support prices from lower levels. Prices are likely to decline in the long-term,” said Biplab Sarma, Senior Research Analyst, AgriWatch.

“Jeera prices may range between ₹55,000 and 65,000 a quintal. Prices may even rise to as high as ₹70,000 if there is organic demand due to festivals and Ramzan,” said Ankit Agarwal, Director of Erode-based Amar Agarwal Foods India Pvt Ltd. 

Low arrivals

Sarma said buyers are currently buying to meet their immediate requirements. “Current year daily arrivals in the spot markets are low compared to the same period a year ago due to lower production. During September, jeera supplies were down by 83.70 per cent compared with the same period a year ago,” he said.  

“In the futures market, many had gone short. So, prices dropped to levels of ₹54,000. But there were no sellers at that price, hence jeera has rebounded to levels of ₹57,000-57,500,” said Agarwal.

On Tuesday, jeera December contracts were up by ₹510 to ₹58,895 on NCDEX. Spot prices for the spice at Unjha, per NCDEX data, ruled at ₹58,595.55 a quintal.

Prices are up this week after continued steady to weak sentiment in the spot market last week, said Sarma. 

“Jeera buyers were reported inactive at higher price levels,” he said.  

Subdued global demand

International markets are subdued as demand from major importers such as China, Bangladesh and UAE has declined as prices are higher. “They are waiting for price correction in the market for fresh procurement,” the AgriWatch senior research analyst said.  

Lower ending stocks in the spot market somehow supported the cumin prices from drastic fall. Decreased supply in the spot markets supported the prices during last month, he said.

Agarwal said jeera stocks need to last at least until March when the new crop arrives in the market. This year, Ramzan will be celebrated a month earlier than last year. “If export demand picks up for Ramzan, prices could head higher towards ₹70,000,” he said.

Sarma said supply will decline due to lower stocks in November as well. “Currently, at Unjha mandi on an average 3,000- 3,200 bags (55 kg each) daily arrivals are reported. Last year in the same period arrivals were 4,500-5,000 bags,” he said.

Sowing details the key

Agarwal said jeera prices could come under pressure once details of the crop’s sowing, which is done during rabi season, are available. “Sowing is expected to be higher this year and farmers could shift from dhaniya (coriander). When that happens, prices could drop. Farmers seem to be confident that rates may not fall below ₹30,000 a quintal,” he said. 

In the long-term, AgriWatch expects cumin prices to decline as there is anticipation of farmers to shift to cumin crop in the rabi season due to higher realisation, Sarma said. In turn, it will affect the market and prices will decline.

Jeera sowing is expected to commence from October-end in Gujarat, while it may start from mid-November in Rajasthan. “We expect the area likely to go up in the current year by 30-35 per cent (as per current sentiments). It may come from other crops such as coriander. Also, some new areas are likely to come up this year,” he said.  

Agarwal and Sarma said jeera prices will begin to drop over the next few days. “Buyers may not go for bulk buying or long term stocks at current price levels,” AgriWatch’s Sarma said.    

“Stockists will begin unloading their inventories once sowing details are available. It will result in prices declining,” Agarwal said. 

Prices double

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.