A surge in domestic demand since the beginning of the year, coupled with unfavourable weather conditions, has started a rally in cumin seed (jeera) market in the futures as well as spot markets. Traders and commodity analysts see the continuation of strong sentiments in the spice commodity for another fortnight till jeera starts hitting the market.
The futures market of jeera traded in a range-bound manner for the last three months, between Rs 9,800 and Rs 10,800 a quintal. However, the present week saw the commodity breaking the barrier with prices crossing Rs 11,000 a quintal mark.
Bhaskar Shah, a Mumbai-based jeera trader, said, "Demand is being seen domestically and from abroad, and it has risen 4 per cent in the last 10 days. Now that truckers' strike has ended, supply which was squeezed is now regaining normalcy and market will weaken in the near future."
Gujarat and Rajasthan are the dominant states in producing jeera. "The rates in the physical market rose by Rs 150-200 to Rs 2,200 for 20 kg. There is, however, a possibility of a decline of Rs 50 as supply picks up," said Jayesh Shah, an Unjha-based trader. In Unjha (the main delivery centre, in Gujarat), arrivals were reported to be 6,000 bags (each of 55 kg) on Thursday. During the strike period, supply was as low as 2,000 bags a day, added Shah.
On the technical basis, said commodity analysts, jeera market is heading for a bull run. But they added that the scenario will be clear once the production status is ascertained. Traders, Business Standard spoke to, gave mixed production estimates of around 2.8 million to 3 million bags.
On the other hand, the commodity expert at Angel Commodities said production could be on the lower side as Rajasthan has seen over 30 per cent lesser sowing and Gujarat might see lesser yield as the standing crop of jeera is not getting the required temperature at this stage of the crop. Last year, country had produced around 2.5 million bags of jeera.
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Moreover, if it rains in Rajasthan within a week or two, crop prospects could be in jeopardy.
Another factor which could support jeera getting into a strong bull run is the higher exports so far in FY09.