The latest spell of unseasonal rains in parts of Gujarat and Rajasthan and tight demand-supply conditions are likely to spice up the sentiment around cumin (jeera) for the current season.
On the NCDEX, jeera futures for the March contract was last quoted at $ 3,67 per kg on Thursday. This is lower by about 20 percent from the peak levels of $4,60 quoted in January 2023. However, analysts and trader sources expect the seed spice to rule firm and inch up to hit record levels later in the season after the rise in export demand.
Over the last weeks, Gujarat and Rajasthan — the largest jeera growing regions — received unseasonal rains with hailstorms at isolated places in Gujarat. This is feared to have dampened the crop prospects with concerns over quality. The Met has predicted more rains between March 13 and 18.
“The impact of unseasonal rains on cumin will be felt more in Rajasthan and parts of Kutch and Banaskantha districts of Gujarat. We don’t see much impact in the Saurashtra region, where most of the cumin crop was already harvested and stocked. However, in the tight balance sheet with negligible carryover stock (around 25,000-27,000 tonnes), we believe there will be a demand-supply gap which will not let the prices fall but keep it firm,” said Ashwin Nayak, President, the Federation of Indian Spice Stakeholders (FISS).
FISS recently released its crop estimates for key seed spices including cumin, coriander ( dhaniya), fenugreek ( methi) and fennel seed ( saunf).
Demand-supply gap
It estimated the cumin crop for 2022-23 at 3.84 million tonnes, which is 28 percent more than last year’s 3.01 million tonnes. FISS said the overall sowing area increased by 12.9 percent in Gujarat and Rajasthan, while yields are expected to be higher by about 13.2 percent over last year. The cumin crop in Gujarat will be higher by 22 percent at 1.41 million tonnes, while the Rajasthan crop will be higher by 32 percent at 2.43 million tonnes. Nayak said the demand would be 80-85 million bags and cumin availability will be around 70-75 million bags (including 5 lakh bags of carryover), which will leave a demand-supply gap triggering a price rise.
Premchand Motta, a leading spices expert, estimated the jeera crop at 60-65 million bags, while the damage due to unseasonal rains would be in the range of 5-7 percent. “The 2023 crop was initially expected to be 55-60 million bags, which caused a bullish sentiment. Now, FISS estimates suggested 69 million bags so there is a bearish sentiment. But I don’t expect the crop to be above 60-65 million bags,” said Motta, hinting that prices may touch $4,55 per kg in the later part of the season.
Traders also anticipate good export demand in March fueling the bullish sentiment. In 2022, FISS estimated jeera exports at around 1.7 million tonnes, which was lower than 2.2 million tonnes the previous year, Nayak said, “This year we expect exports to be around 2 million tonnes as we expect Chinese buying to return after a year’s gap.”
Source: The Hindu Business line
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