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Area under jeera may double as its price up over 100% this year

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The area under jeera (cumin) will likely increase by at least two times, while its prices are likely to be range-bound above ₹60,000 a quintal until Diwali when the sowing details will be available.

One reason why prices may not witness any huge spike is that the commodity is now being imported for re-exports as a value-added product. 

“Sowing of jeera will double this year. We will have to see how the market balance will be until the new arrivals early next year,” said Arvind Patel, former president of Unjha Chamber of Commerce (UCC). 

‘Open & shut case”

“At this point of time, jeera is an open and shut case. The commodity is fundamentally price inelastic. New crop arrival will not be before the Holi festival but sowing will be at least double that the coverage this year,” said Jagdeep Garewal, an analyst in the spices trade. 

“Jeera prices are high but no trade is taking place. No one knows how much more they will increase. The firm trend will continue at least till November, when the new sowing report comes,” said Ashvin Nayak, founder-chairman of the Federation of Indian Spice Stakeholders (FISS). 

Jeera futures have been hovering around ₹65,000-mark over the last few weeks on NCDEX. On Monday, the October contract ended ₹245 lower at ₹63,200 a quintal. 

Imports for re-exports

Data from Agmarknet, a unit of the Agriculture Ministry, show the spice’s modal price (the rate at which most trades take place) on Monday was ₹57,500 at Unjha agricultural produce marketing committee (APMC) yard. Jeera prices have been ranging between ₹57,000 and ₹58,500 since the beginning of this month. 

Biplab Sarma, Senior Research Analyst, AgriWatch, said profit-booking could set in and cap higher prices this month. It may affect jeera supply, too. “Overall supply is expected to be down during the month on lower ending stocks and limited availability of premium quality,” he said.

FISS’ Nayak said jeera was now being imported from Turkey, Syria and Iran. “Imports are being made for re-exports of value-added products such as oils under the advance licensing scheme. Imports under open general licence are not possible as they attract 33 per cent Customs duty,” he said. 

But these imports are replacing the use of domestically produced jeera and therefore that much of demand will be less. “Though we expect jeera acreage to at least double, the crop could see some competition from isabgol,” he said. 

Decline may be steep

“On the demand front, we have to watch out how bulk buying progresses during Diwali. It is likely that prices may top ₹700 or ₹750 a kg but once they begin falling, the decline could be steep,” said analyst Garewal.

He ruled out competition for jeera from Isabgol as the crop was affected due to heavier than normal rains. “We will witness scenarios similar to the ones we saw in pepper in 2008 and guar in 2010. Prices may soar but the fall will also be steep,” Garewal said.

“We might see prices rising by ₹2,000-3,000 a quintal till Diwali before finding their direction based on sowing reports,” said the former UCC chief.

Weather impact

Jeera prices have almost doubled since the beginning of this year as unseasonal rains in March and heatwave in April affected the standing crop, particularly in Gujarat and Rajasthan.

In January at the International Spice Conference, jeera production, which dropped 20 per cent last season to 3.88 lt, was projected at 4.14 lt in the current season. As a result, global production was pegged higher at 4.35 lt against 4.08 lt. However, net supplies from India were estimated 7 per cent lower and prices were expected to remain bullish, said a report prepared by ITC Ltd.

 Geojit Financial Services Ltd said jeera production in Gujarat is estimated to drop by 9.3 per cent to 2 lakh tonnes this season. Slack exports from Syria and China turned jeera bullish. Surprisingly, Spices Board data on exports for April-May show that jeera exports increased 68 per cent in volume and surged over 200 per cent in value. 

Shipments in the first two months of the fiscal were nearly 43,000 tonnes valued at $182.69 million compared with 25,603 tonnes valued at $64.04 million in the same period a year ago. The rise comes after a 14 per cent year-on-year fall in the 2022-23 fiscal to 1,86,509 tonnes.





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