Futures meltdown fails to hit cumin spot rates

Though cumin seed (jeera) futures market tumbled unexpectedly in the last few trading sessions, the spot market has managed to insulate itself from any drastic fall.

Instead of expecting weakening of prices, marketmen ruled out any further slips in the physical market saying it should stabilise and firm up soon. The near month futures contract of jeera fell by over Rs 12 a kg during the period, whereas it dropped only Rs 3-4 a kg in the Unjha market helped by the arrival of 3,500-5,000 bags (55 kg each) over the last couple of days.

"Fall in the spot prices were not in tandem with futures. In the coming days, we do not see intense bearishness and expect it only next month when demand will return and stabilise the rates," said Dilip Patel, a Unjha-based trader.

The prevailing rates of jeera on Wednesday in Unjha were in the range of Rs 120-122 a kg, which during last week were ruling around Rs 125-127 a kg. Arrival was reported to be at 4,500 bags. On the National Commodity and Derivatives Exchange (Ncdex), the near month contract for jeera gained some strength and bounced back today. It closed at Rs 11,670 a quintal against the previous close of Rs 11,383 a quintal, up 2.52 per cent.

Market activities in Unjha have been quite lull since April with lacklustre demand leading to range-bound movements in jeera prices.

As the arrival season is coming to an end period, supply constraints may stoke Unjha market with bullish sentiments. Traders, too, subscribed to this view saying the upward market movement would take a month. The last fortnight, on an average, has seen an offtake of 4,500 bags a day in the Unjha market.

The country's overall production estimates for the current year are 55,000 tonnes against 85,000 tonnes last year. At the same time, conflicting reports from Turkey and Syria (key producing countries other than India) of crop damage are still persisting. Traders in Unjha said there were indications of 25-30 per cent crop damage in these two countries, but there is no official confirmation on it.