Crop damage bolsters spice prices

Cumin and coriander show clear rising trend, with turmeric, pepper and chilli likely to follow

Most spices traded on a positive note in the past month on good domestic demand and worries about lower output due to untimely rain in major growing areas for cumin seed, coriander, black pepper and turmeric.

While jeera (cumin) recorded a jump of 12.6 per cent, coriander and turmeric surged 29 per cent and 5.8 per cent, respectively, in the futures market. In the spot market, spices moved in line with futures. Jeera, coriander and turmeric witnessed a jump of 7.25 per cent, 29.3 per cent and two per cent, respectively.

The prices have surged on supply concern from the growing areas, following untimely rain during the peak harvesting season. Also, robust export demand.

"Standing crops in most parts of sowing states were badly damaged. Deterioration in the quality also cannot be ruled out," said Akay Kedia, managing director, Kedia Commodity.

All contracts of cumin seed jumped nearly six per cent on Monday at the National Commodity & Derivatives Exchange. The commodity for delivery in May touched Rs 17,905 a quintal towards the evening. Turmeric rose by two to four per cent.

"Rain damaged the coriander crop by 60 per cent. Cumin seed suffered lower sowing this season, with its price is estimated to reach Rs 20,000 a quintal. That's the reason spices (prices) are expected to remain firm this year," said Yogesh Mehta, managing director, Spice Exim.

India's total cumin seed output is estimated at 160,000- 180,000 tonnes this year, as compared to consumption of 140,000 tonnes, and farmers to keep holdings of 50,000-60,000 tonnes. So, short supply is expected.

"A bullish trend is likely to continue for jeera due to crop damage, low production estimates and falling arrivals against pick-up in export demand. An expected 42 per cent lower sowing area in Gujarat and 214,000 ha of crop damage in Rajasthan is keeping prices firm. Seed exports are rising and expected to rise further in the coming weeks. Therefore, cumin seed prices are likely to hit Rs 19,500 a quintal in two months," said Naveen Mathur, associate director (commodities and currencies), Angel Broking.

During April-December 2014, cumin seed export rose 28 per cent to 128,500 tonnes. Export orders have been diverted towards India due to geopolitical tensions in Syria and Turkey, two major suppliers.

Coriander prices rebounded after a recent drop as major growers in Gujarat and Rajasthan had shifted from jeera, leading to record sowing this year. But unseasonal rain had delayed the new season arrival and led to a rebound for the prices. Export demand from West Asia, Southeast Asia, America, Britain and Germany is expected to remain robust during the April to June quarter, helping to keep prices up.

Turmeric rebounded in anticipation of lower arrivals due to recent rain in south India. Also for the 2014-15 season, there are concerns over crop loss due to Cyclone Hudhud that hit Andhra in October 2014. Exports rose eight per cent to 65,000 tonnes during April-December 2014.

Subdued currently on profit booking, pepper, chilli and turmeric are also set to follow the trend in cumin seed and coriander.