Price Trends
January to April: The beginning of the year saw an increase in cumin seed prices. Prices rose from an average of $4.50/kg to $6.00/kg or €5.56/kg. The increase was attributed to stockpiling by large stockists anticipating future price hikes and to a 15% decrease in crop yield in key areas due to unseasonal rains.
May to August: During these months, the market witnessed more fluctuations with a general upward trend in prices. Prices fluctuated between $5.80/kg and $6.50/kg or €5.37/kg and €6.02/kg Contributing factors included erratic weather conditions that affected crop yields, increased demand from international markets (notably China and Bangladesh), and the dynamics of export restrictions and permissions. In July, a peak of $6.50/kg or €6.02kg was reached when China imported 20% more cumin seeds compared to the previous month, creating a temporary supply shortage.
September to November: There was a noticeable decline in cumin seed prices in this period. Prices fell to $5.00/kg or €4.63/kg. Improved sowing conditions led to anticipation of better yields, which eased supply concerns. Moreover, a decrease in export demand, especially from regular importers like Bangladesh, which reduced its imports by 30%, led to an oversupply in the domestic market, along with manipulation by market players, contributed to the price drop. Improved weather conditions led to better sowing, and the market saw increased supply.
Demand and Supply Dynamics
- Domestic demand remained low, with a 10% decrease in consumption due to alternative spices being used.
- International demand saw significant peaks, especially in July when China imported 5,000 tons, a substantial increase from its average monthly import of 4,000 tons.
- Supply faced constraints, notably in March, when unseasonal hailstorms damaged approximately 2,000 hectares of cumin crop in Gujarat, a key producing region.
Harvesting and Sowing Impacts
- The sowing of cumin seeds was delayed in several major producing regions like Gujarat and Rajasthan, attributed to unfavorable weather conditions and policy decisions.
- The harvest was impacted by unseasonal rainfall and occasional hailstorms, leading to reduced yield and compromised quality in certain areas.
- Gujarat represents 40% of the cultivation, with its segment slightly exploding to highlight its primary role in cumin seed production.
- Rajasthan follows closely with 35%, indicating its significant contribution to the cultivation. In Rajasthan, the yield was reduced by 20%, while Gujarat saw a 15% decrease in yield.
- Other Regions contribute the remaining 25%, covering various other areas involved in cumin seed cultivation.
Export and Import Dynamics
- Exports of cumin seeds were heavily influenced by demand from countries like China and Bangladesh. These fluctuations in demand led to corresponding shifts in export volumes.
- Import activities had less impact on the market compared to export dynamics. The local market was more influenced by domestic production and external export demands.
- China accounts for 45% of the exports, highlighted with the largest share and an exploded segment to emphasize its significance.
- Bangladesh follows with 30%, representing a significant portion of the export market.
- Others make up the remaining 25%, encompassing exports to various other countries.
- The export market for cumin seeds was divided among major importing countries in 2023.
Cultivation and Production Variability
- There was considerable regional variation in cumin seed cultivation and production. Some areas, notably Rajasthan, managed to compensate for production losses in other regions. Rajasthan, despite reduced yield, managed to produce 30,000 tons, while Gujarat produced around 25,000 tons, both lower than the previous year’s figures by 10-15%.
- Overall production faced challenges due to erratic weather conditions and shifts in farming policies, notably in countries like Afghanistan which impacted the global market. Afghanistan, a minor player in the cumin market, altered its farming policies, focusing more on wheat cultivation, which indirectly impacted the global cumin supply chain.
Other Influential Factors
- Market manipulation by large stockists was evident when they released stored stock in May, causing a temporary price drop to $5.80/kg or €5.37/kg. These entities often influenced prices and availability through strategic stockpiling or controlled release of stocks into the market.
- Political and economic factors, including government policies on agriculture and international trade agreements, also influenced the market dynamics of cumin seeds, especially in export-import dynamics with neighboring countries.
Conclusion
The cumin seed market in 2023 was marked by significant volatility, driven by a complex interplay of various factors. Weather conditions, international demand, market manipulations, and policy changes were key elements influencing market trends. Understanding these dynamics is crucial for stakeholders in the cumin seed market to navigate the challenges and opportunities that arise in such a fluctuating environment.