Heavy arrivals and weak demand has brought down Jeera (cumin seed) prices by more than 20 per cent since December 2011. At the spot market in Unjha, jeera prices hovered in the range of Rs 11,000-11,500 per quintal on Monday with arrivals touching 50,000 bags (each of 55 kg).
According to trader sources, jeera acreage has almost doubled during 2011, which resulted in a bumper crop.
"In Gujarat, Jeera was sown on more than 265,000 hectares of land, which was about 130,000 hectares previous year. However, there were some climatic fluctuations after Diwali, which was feared to hamper the crop. But now, the situation has changed and markets are flush with jeera and prices are declining constantly," said a jeera trader and exporter from Unjha.
In December 2011, jeera was quoted at Rs 13,500 to Rs 14,000 per quintal at Unjha market. The prices have come down by more than 20 per cent in past three months to trade in the range of Rs 11,000-11,500 per quintal in the spot market. In the international market, jeera prices remained firm at US $ 2500 per tonne, while that of Syria's remained higher at $ 3300 per tonne.
"We are expecting jeera production to be in the range of 3.2 to 3.3 million bags against 2.8 million bags that were reported in the last year. Domestic demand is weak and arrivals have started mounting from a usual 30,000 bags to about 40,000 bags daily. While on Monday, the arrivals touched 50,000 bags. Prices have come under pressure due to this and may slide below Rs 110 a kg in spot market amid weak domestic off take," said Arvind Patel, an industry analyst and former president of Unjha Vepari Mahamandal - a local merchants association. Gujarat's production is likely to be around 1.2-1.3 million bags while in Rajasthan may contribute about 1 million bags.
According to market sources, jeera arrivals have shot up in past one week from around 35,000 bags to about 50,000 bags on Monday.
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On the National Commodity and Derivatives Exchange (NCDEX) April contract of jeera futures, fell by almost Rs 350 per quintal and traded at Rs 11750 per quintal. The April contract ends on 20th of this month.
"Domestic buyers are not making fresh purchases presently, mainly due to sliding prices. The sentiment is dull and arrivals continue to hit markets. However, we expect exports to do well as Syria and Turkey are not being able to meet international demand," said a jeera exporter and trader from Palanpur.
Despite domestic buyers staying away from fresh purchases, market insiders maintained that exports will rise sharply as two leading producers of jeera, Syria and Turkey would not be able to meet the international demand due to low crop there.
"Jeera exports may touch 1.2 million bags this year, up from about 500,000 to 700,000 bags reported last year. This may partly support prices. But looking at the quantum of arrivals hitting the markets, prices may continue to slide at least till the end of this month," added Patel.