Jeera (cumin) prices have increased to record highs in spot and futures markets on projections of lower carryover stock and fears of sowing in key growing regions of Gujarat being affected.
In the futures market, cumin has zoomed to $3,23 per kg for December contracts. The last peak was $2,66 in November 2017. Over the past two months, prices have shot up 12-15 per cent. Prices ruled at about $1,97 a year ago.
In Unjha agricultural produce marketing committee (yard) in Gujarat’s Mehsana district, the hub of cumin, prices have increased 10 per cent since November 1 to $2,85 a quintal from $2,60.
47% drop in area
Traders attribute the rally to the lower carryover stock projections coupled with a reduced acreage in Gujarat which may lead to a tight supply. Gujarat Agriculture Director’s report as on December 12 said the sowing cumin had been completed on 2.24 million hectares, which is 47 per cent less than the three-year average of 4.21 million hectares.
For 2002, total cumin production in India has been estimated at 5-5.5 cumin bags (each of 55 kg) with the previous year’s carryover stock projected at 3-3.5 cumin bags. This has resulted in the overall supply of the seed spice at about 8.5-9 million bags. However, amidst a sharp dip in cumin production in countries such as Turkey, Syria, Iran and Afghanistan, it is the Indian crop that is meeting the global demand. This has reduced the stock available at the end of the season to about 10 million bags.
Most of the sowing for cumin is almost over, but the weather remains tricky for a good crop. Ashwin Nayak, founding chairman, Federation of Indian Spice Stakeholders, told that the sowing expectation was high for the current season.
Weather concerns
Gujarat recorded 10-15 per cent lower sowing, whereas there was an increase in acreage for Rajasthan. Also, there are concerns about prevailing warm weather. “So, even if it results in a similar crop size as that of last year, there will still be a lower availability as we are having negligible carryover from last year. Additionally, we are having an early Ramadan month fueling consumption in addition to exports. The prices will remain firm,” said Nayak.
Kolkata-based spices trader Premchand Motta mentioned that the warm weather will impact the germination of seeds. “As a result, total crop yield may be around 50 million bags. Therefore, cumin price may rise further in 2023,” he said.
Traders are keeping a close watch on the market movement till the global producers come out with their crop numbers in June next year. “These factors are supporting the bullish sentiment. The inventory is not huge, the crop estimation is still too early, and there is also an impact of overall inflation in the commodities. Putting together all these factors, we are seeing cumin making new highs till the time we get the new crop by mid of February 2023,” said Sailesh Shah of Jabs International, a leading spices exporter.
Source: The Hindu Business
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