Jeera exports to remain immune to demonetisation

Exporters of the spice say farmers have begun accepting payments digitally, ensuring steady supply

While cotton and groundnut exporters are facing difficulties in sourcing their produce for fulfilling commitments in the peak of season due to a demonetisation-driven cash crunch, jeera (cumin) exporters have been relatively unaffected.

According to jeera exporters, while the new season is likely to start in March, farmers have gradually begun accepting payment digitally, and have therefore been able to ensure steady supply.

"Jeera exporters may not face the problems that cotton, groundnut or other commodities exporters are facing due to the cash crunch post demonetisation. The new season for jeera will start in March, by which time exporters may be able to source the required stocks," said Bhaskar Shah, managing director of Jabs international Private Limited.

As per industry data, India exported about 100,000 tonnes of the spice during April to December and more than 20,000 tonnes of additional export would be possible during the next two months. As against this, India's total jeera exports were 98,000 tonnes in 2015-16.

Currently farmers aren't selling cotton and groundnut in large quantities, leading to decline in arrivals of both commodities by almost 40 per cent. Jeera, however, is witnessing a contrarian trend. Nevertheless, jeera prices have gone up the past few days as arrivals have fallen due to lower production, not cash crunch.

As per an Angel Commodity report, jeera futures traded higher for the second consecutive session on Tuesday, tracking good demand in the physical market. The demand for exports has supported jeera prices even as good sowing progress is now weighing on prices.

Girish Brahmbhatt, managing director of Sterling Exports Inc said, "Sowing has been good so far and weather conditions are also favorable for jeera crop. As all is going well as exporters are not buying in large quantities but are waiting for the new crop. However, looking at the current trend, buyers may not take a risk and initially demand will be low at the beginning of the new season."

According to Gujarat agriculture department data, as on December 23, jeera covered 267,100 hectares, down marginally by 0.44 per cent from 268,300 hectares in the corresponding period last year. Jeera is currently trading at Rs 3,300-3,650 a 20 kg at the Unjha mandi of Gujarat and daily arrival has been reported at about 1,200 bags of 55 kg. Jeera prices have gone up by Rs 200 a 20 kg in a week.