Exports may lift cumin seed prices

Though slack demand in the domestic market is taking a toll on the cumin seed (jeera) market, experts believe exports demand may soon reverse the sentiments.

According to commodity analysts, the bearish trend will not last for more than a week and added that demand will start picking up with the approaching festivals season. They are hopeful that international buyers will turn to India as heavy rains in Iran, Syria and Turkey (the key jeera producers apart from India) damaged the crop there.

The current stock in the country is already less than the average stock by around 7-8 lakh bags (each of 55 kg), a good enough reason for the market to rebound. The country produced around 12 lakh bags in 2006-07 and had a carry-forward stock of 5 lakh bags. The normal yearly consumption (including domestic and export) stands at 22-24 lakh bags.

Jayesh Patel, an Unjha-based trader said, "Market is witnessing lacklustre demand. But we anticipate the demand from overseas will lift the market anytime." Reports suggest that there is good demand in Singapore, Bangladesh, Malaysia, China, US and European countries.

According to market estimates, the country has an overall stock of around 8 lakh bags. About 2.5-3 lakh bags have already been exported and over 5 lakh bags have been consumed domestically since March this year. With domestic consumption at over one lakh bags a month and export demand likely to pour in, commodity analysts and traders believe that prices will improve in the coming days.

In Unjha, the delivery centre for jeera, the daily arrival is steady at 2,500-3,000 bags. In the physical mandis, the quality tradable at commodity exchanges is being quoted at around Rs 12,800 a quintal, which is much higher than the near-month contract. When July contract expired, the difference between the futures and spot markets rates was Rs 1,200 a quintal. Analysts anticipated that the current contract would also meet with the same fate as the difference had already reached Rs 1,100 a quintal. They said that speculation in the futures market was responsible for bringing the futures down despite having strong fundamentals indicating bullish trend.

The new crop will be sown by September this year and harvest will follow in February next year. Floods in Rajasthan and Gujarat (major producing states) during the last season, resulted in drop in production by over 35 per cent. On the National Commodity and Derivatives Exchange (Ncdex), the near-month contract closed at Rs 11,729 a quintal on Tuesday, down 0.33 per cent against the previous close of Rs 11,768 a quintal.