China’s latest agricultural forecast indicates a disappointing yield of cumin, triggering an imminent surge in demand. The anticipated shortage of cumin in China has set the stage for an intense buying spree, with reports suggesting a staggering 400 to 500 containers being procured in a single round.
India, known for its high-quality cumin crop, is poised to benefit from China’s predicament. The exorbitant prices prevailing in the Indian market have resulted in a substantial surplus of approximately 1.8 to 1.9 million bags of cumin. However, with the upcoming new season still several months away, the extraction of fresh supplies remains on hold.
Uncertain atmosphere
The international spice trade, dominated by Syria and Afghanistan, has halted cumin transactions due to fluctuating prices. Previously, Syria’s cumin commanded a range of 54800 to 5000 per tonne. Unfortunately, recent weeks have seen Syria withdraw its price quotations, creating an uncertain atmosphere for traders. Similarly, Pakistan’s extensive procurement has dramatically affected Afghanistan’s cumin market, leaving little supply for international trade.
Meanwhile, a surge in purchases from Bangladesh, coinciding with the upcoming Bakrid festival in July, has bolstered the demand for Indian cumin. China has also been sporadically participating in the buying frenzy. Consequently, cumin seed prices have witnessed a gradual increase. However, experts predict a substantial boom in the market once Chinese purchases escalate and domestic demand strengthens.
Considerable deficit
The stockpiles of cumin are mainly held by farmers and traders, amounting to approximately 25% and 10%, respectively. Consequently, the cumin balance sheet reflects a considerable deficit due to eight months of limited supply during the new season. Forward trading of cumin containers has significantly contributed to the price surge. Warehouses currently experience a stock blockage, resulting in lucrative returns of two to two-and-a-half percent for forward container traders.
Traders emphasize that the recent rise in cumin prices stems from a fundamental shortage since the beginning of the season. Typically, cumin prices surge in the spot market before influencing the forward market. Given the fixed demand for cumin, analysts believe the spice is on track to achieve historic price highs, making it a must-buy commodity on any market corrections.