Cumin Market Faces Bearish Trends
Recent developments have cast a bearish shadow over the cumin market. The obligation to export imported cumin has led importers to saturate the local market with low-priced spice powder, resulting in an oversupply issue. Moreover, the subpar quality of imported cumin has caused it to be available at a significantly reduced cost, up to $5,41 per kg cheaper than locally sourced cumin.
In Rajasthan, daily arrivals have surged to around 2,500 bags, contrasting with 1,500 bags in Merta, 500 bags in Jodhpur, and 100-200 bags in other markets. Raw cumin is trading at $7,5 to $8 per kg, while ripe cumin falls within a similar range. Reports even suggest prices reaching $8 to $8,68. Rajasthan alone has accumulated over 200,000 bags. Despite these conditions, the fundamentals of the market remain bearish as speculators and retail traders avoid cumin due to its high cost. Additionally, the expensive cumin has forced households to curtail consumption, leading to reduced domestic demand. Processors are substituting cumin with coriander to produce spice powder.
With the current bearish sentiment, the prospects for a short-term price surge appear dim.
Hope for Cumin Price Recovery
Although prices have plummeted by $1.35 per kg, there is now potential for a rebound of $5,41 to $6,76. This optimism is fueled by the anticipation of reduced imports and the entry of new investors and stockists into the market within the next six months. Notably, defaults by a few Chinese exporters have prevented the arrival of 70 containers, impacting overall supply. However, it’s noteworthy that 70 containers have already reached India from China, and with the shipment of 140 containers scheduled for August, these cumin supplies will arrive in India in September. This situation has narrowed the price gap between Chinese and Indian cumin from $1,400 per ton to $300, with Indian cumin priced at $65,000 per ton. Consequently, Indian cumin exports are likely to resume, particularly for the Christmas season, with strong demand observed in the United States.
Impact of Defaults on Cumin Imports and Export Prospects
Around 70 to 75% of the total cumin import deal from Syria and Türkiye has experienced defaults, with only 25% reaching India. However, this has not had a significant impact, as Bangladesh is emerging as a prominent player in the cumin trade due to competitive pricing. It is poised to boost exports to the Middle East, European countries, and the United States, especially during the Christmas season.
Promising Outlook for International Demand and Market Stability
Demand for cumin remains robust in the United States, European countries, and Western markets. Furthermore, with the Indian festival season underway, domestic demand is expected to pick up, potentially alleviating market conditions.
Stability is anticipated in the cumin market, with further price declines considered unlikely. Instead, a rebound of $5,41 to $6,76 per kg is foreseeable in India. Cumin prices are projected to hover between $6,76 to $7,4 per kg until Diwali. Following Diwali, a potential price increase is expected due to heightened demand.
Overall, the cumin market currently grapples with bearish sentiments, and export prospects remain uncertain until Diwali. Consequently, cumin prices are anticipated to remain in the range of $6,76 to $7,4 per kg until Diwali, with the possibility of subsequent price rises driven by increased demand. It is highly improbable for cumin prices to dip below $33.51 per kg due to reduced stocks. It is highly recommended to procure cumin in current market conditions.