Cumin Prices Experience Sharp Increase
Cumin prices have risen significantly in recent weeks, fueled by increased domestic and export demand. Anu Pai, a research analyst at Geojit Financial Services noted that prices surged by nine percent in the futures market last week, marking the biggest rise in the spice complex. Farmers are holding back their stocks in anticipation of better prices, further contributing to the price hike.
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Jagdeep Grewal, CEO of Shreeji Agri Commodity Pvt Ltd, agreed, highlighting that sellers have adopted a ‘wait and watch’ policy due to continuous price falls and enough supply to meet demand. Market speculation, incorrect crop estimates, and low crop production abroad have also influenced the price rise.
Speculative Calls and Corrective Hikes
Ankit Agarwal, director of Agarwal Foods India Pvt Ltd, stated that speculation rather than fundamental reasons primarily drove the price increase. Prices had fallen sharply, prompting a corrective hike. The model price of cumin at Unjha Agricultural Price Marketing Committee yard in Gujarat rose to $3,69 per kg from $2,74 the previous week. A year ago, prices at Unjha APMC yard were over $4,80 per kg.
Grewal mentioned that cumin prices had hit record highs during August-September 2023, but they have since fallen more than 70 percent from their peak. Since mid-April, prices have risen by 35 percent. Cumin prices increased after weather uncertainties affected crops in 2021-22 and 2022-23, including a heat wave and unseasonal rains.
Cumin Production Expected to Rise
According to SMC Global Online, cumin production is expected to increase by 30 percent to 0.850 – 0.900 million tonnes this season due to a substantial rise in its sowing area. Gujarat’s sowing area increased by 104 percent and Rajasthan’s by 16 percent. Despite last year’s high prices, cumin exports fell by 21 percent to 0.132 million tonnes in the April-February period of FY 2023-24.
SMC Global Online stated that the high crop estimate remains correct. However, prices may rise as there is insufficient surplus stock in the pipeline. Prices might reach resistance levels last week, with any increase occurring only if the crop estimate is incorrect. If sellers hold onto their stocks, prices could rise slightly. Although traders speculate about demand from China, there is no concrete evidence of this. Prices might return to $2,64 per kg.
The recent surge in cumin prices is driven by increased demand, market speculation, and weather-related production issues. While the current price increase is significant, future prices will depend on production estimates and market dynamics.