 "Spices are on fire, cartel in Jeera adds fuel")
Jeera prices have risen from Rs 12,000 to Rs 16,250 a quintal, a jump of 35 per cent in two months. A large part of this was in the last month.
Ajitesh Mullick, assistant vice-president, retail research, Religare, said, “2014 had started on a high stock level, as the previous monsoon was good. That is why, despite delayed rains this season, there was not much price movement till November. However, with delayed sowing and a pick-up in export demand, prices have gone up.” He added while moderate rains would benefit the crop (and overcast conditions in major jeera producing regions of Gujarat and Rajasthan), by the time the new crop arrives around March, prices are bound to go up.
Traders also say a few cartels are at work in jeera, active in spot and futures markets, as a lower crop, coinciding with increasing export demand, is expected to keep high demand pressure on.
Ajay Kedia, managing director of Kedia Commodity, claimed a 40 per cent drop in jeera acreage as the area under cultivation had shifted to another spice crop, dhania, which has seen a 40-45 per cent rise in sowing. However, dhania prices, too, are unlikely to see much respite as international demand would be high. “From a Rs 16,300 a quintal, it is expected to move up to Rs 19,000 levels within the next two months.”
Mullick added India accounts for nearly 70 per cent of global jeera production (about 200,000 tonnes). Supply from Turkey and Syria (16 per cent of global production) is down, owing to political turmoil. This is likely to divert demand for export to India. India exported about 90,000 tonnes of jeera till December as against 80,000 tonnes in last year.
A trader from Jodhpur said weather in Syria is expected to remain erratic in March, the midst of sowing there. It means demand from India will go up further.
Jitendra Adani, managing director of Adani Food Products, said, “Demand from the western world has been well this year due to reasonable prices as compared to Bangladesh, Pakistan and Sri Lanka. More, tight supply in some spices and good quality has diverted global demand to India.”
According to data from the All India Spices Exporters Forum, during April-September 2014, export of spices was 421,570 tonnes, higher by nearly 12 per cent from last year’s 376,584 tonnes in the same period.
On turmeric, Kedia said, “While prices are around Rs 9,000 a quintal now, the outlook is for Rs 12,500 a quintal in the next two months.” The price went up by Rs 200 a quintal since December.
The Religare report says, “Low stocks and lower production reports are likely to support prices in the medium to long term.” A fall in acreage in Tamil Nadu and Karnataka due to a cyclone in October amid delayed monsoon could affect production adversely.
Cardamom, too has carry-over stock, however, with production in Guatemala dipping, the export demand is likely to push prices in the domestic market. Prices, which are around Rs 1,050 a kg now, is likely to go up to Rs 1,250 a kg in the next two months, said Kedia. Saseendra Babu, managing director, Green Gold Cardamom Producer Co Ltd in Kerala, said, "Guatemala production is low this year, as well as production in Kerala too is down by 50% on a year-on-year basis." He added that prices are expected to go up by Rs 200 per kg by March.
The only spice which has seen some easing of prices with arrivals trickling down, is pepper. As global supply is also expected to be higher, traders feel that prices would ease further.
On the whole, while prices of spices have been stable more or less throughout last year, is most likely to see an upturn this year. As AISEF chairman, Gulshan John put it, "We have good production last year and as result price was remained at reasonable stage. With this rupee depreciation against dollar also supported export market mainly in high value spices like pepper, cardamom and garlic."