Fennel seed to decline on fresh arrivals

Fennel seed prices are expected to edge down in March as new crop arrivals begin to trickle in coinciding with weakening of demand,traders said.

At present, they are ruling at Rs 85-100 a kg in Unjha, the major market in India, they said.

"Fennel seed prices are due for a correction as they have been on an upward trend," said Arun Bhinde, a Mumbai-based trader of fennel seeds.

Prices were quoting at an average of Rs 102.50 a kg during the first week of February compared with Rs 62 same week last year, according to the Spices Board of India.

"Prices have also moved up because there were no carryover stocks from previous year," said Bhanu Bhai, an Unjha-based trader.

Firm prices throughout the year on low stocks prompted farmers in Gujarat and Rajasthan to shift to fennel seed cultivation over other crops such as jeera or cumin seeds.

According to trade estimates, the country's fennel seed production in 2007 is likely to be 55,000-60,000 tonne against 50,000 tonne in the previous year. Gujarat accounts for the bulk of fennel seed crop followed by Rajasthan and Uttar Pradesh.

Prices are seen remaining firm for next couple of weeks until arrivals commence, traders said. "Prices were expected to move down this week but recent rains in the fennel seed growing areas of Gujarat and Rajasthan have reversed the trend," said Bhinde.

Also demand from exporters is likely to continue through February, said Pravin Patel of Unjha Commodities and Securities.

"I expect prices to move down by Rs 10 a kg after March 15 when the export demand and local buying peters out," he said.

Demand for new crop arrivals initially is usually muted, as the moisture content is very high, said Bhinde.