The year 2020 has turned out to be a bad one for spices. The price data of top four exchanged-traded spices including cumin seed (jeera), coriander (dhaniya), turmeric and cardamom indicate a sharp fall in the range 8 per cent to as high as 56 per cent during the year making the complex the worst performing agri-commodity segment this year.
Data revealcardamom futures suffered the steepest fall at 56 per cent, followed by coriander and jeera at 16 per cent and 15 per cent, respectively, while turmeric futures fell by about 8.5 per cent during the year.
The reasons for the spice crops losing their flavour are many — changed trade dynamics hurt spices. The bulk investors or stockists kept their inventories low due to uncertainties caused by the pandemic.
Sailesh Shah, Director, Jabs International — one of India’s largest spices exporters — informed that prices of spices took a hit because of poor demand.
“The market was well-supplied all through this year as the previous monsoon was also good. But as the Covid-19 hit the world, demand took a beating. Because of the economic and business uncertainty, investors and financial players were absent from the market. No buyer was willing to hold the stock, and as a result demand took a hit and impacted prices,” Shah said.
Turmeric turned pale
India grows about 95 lakh bags (of 60 kg each) of turmeric annually, of which 70 lakh bags are consumed locally and about 20 lakh bags are exported. However, in 2020, both domestic and export demand were weak.
Market watchers informed that Covid-19 did bring some optimism for turmeric consumption as an immunity booster, but that didn’t last long and help lift the prices from the lows of around ₹5,500/quintal. Even as Unlock has started in India and other parts of the world, turmeric prices are less likely to see any immediate revival, say experts.
NCDEX Turmeric December futures quoted at ₹5,698/quintal on December 17.
Coriander, the saviour
Ajay Kedia, Director of Mumbai-based Kedia Commodities, informed that most of the 15 per cent fall in coriander prices happened only over the past one month or so, and was triggered by higher sowing data in Gujarat indicating a bumper crop in upcoming season. “The prices were hovering around ₹6,800/quintal till last month. In the international market, crop arrivals in Romania and Bulgaria kept a lid on prices in all markets. In the domestic market, demand is less but at the same time, the carryover stock is also less, which will limit any further fall,” Kedia said. NCDEX coriander December futures were at ₹5,846/quintal on December 17. Coriander traders see consumer sentiment improving on the prospects of Covid-19 vaccine availability. “The sentiment is not as bad as it was six months ago. So we see optimism in prices,” said Kedia.
Jeera & Cardamom
Jeera, according to trader sources, faced a fall primarily due to lockdown and demand destruction from the institutional buyers. “There was thin buying even during Diwali. Most traders were asking for cash payments which led to smaller orders as against what used to be large orders on credit. This put additional pressure on the prices,” said an Ahmedabad-based trader. Meanwhile, brightened sowing prospects this year has also further weakened the prices. NCDEX Jeera January futures quoted at ₹13,105/quintal on Thursday.
For cardamom, a sharp correction of about 56 per cent in the past one year is primarily attributed to exceptional price condition last year, which was triggered due to widespread crop damage in 2019 owing to floods in Kerala, the key growing State. As a result, prices hit through the roof to ₹4,465/kg on August 2019, as against ₹1,470 in the same month the previous year. Cardamom futures are in the range of ₹1,500/kg, which, according to analysts, is a return to normal price levels.