Jeera futures break lull, move up

Cumin seed prices move beyond the Rs 10,000 a quintal mark

The shortage of stocks coupled with the rising demand in the physical market have pushed cumin seed futures beyond the Rs 10,000 a quintal mark on Thursday after remaining low for more than three weeks.

According to marketmen, the upward rally is likely to continue. The mandis in Unjha (delivery centre) saw a jump of Rs 4-5 a kg to Rs 105-110 so far this week. The daily arrival stood at 2,000-2,500 bags (each of 55 kg) against an offtake of more than 5,000 bags.

In Unjha, market sources said that the stocks were around 0.2 million bags, which would be exhausted by the time the new crop arrives in mid-February next year. Meanwhile, reports suggest that the demand from northern part of the country and also from China were helping the market to firm up.

Dilip Patel, a Unjha-based trader, said, "Demand in the spot market is good and the stocks are comparatively less. The prices should go up by another Rs 2-3 a kg in the near future."

On the international front, domestic jeera is being quoted at $2,700-2,800 a tonne against the $3,300-3,400 a tonne quoted by Syria and Turkey.

The market remained subdued for more than three weeks and ranged between Rs 9,500 and Rs 9,900 a quintal on the back of sluggish demand. According to commodity analysts, the near-month futures could even go up to Rs 10,350-10,500 a quintal.

Another factor that has stoked the bullish sentiments in the market is the adverse weather condition in the main growing areas in Gujarat. "At this stage the crop needs cool weather. However, the relatively high temperature now could pull the yield down," said market sources.

Faiyaz Hudani, a commodity analyst with Kotak Commodities, said, "The intial reports on the sowing front seems positive as farmers received good prices this season. Thr prices have shot up to Rs 110-120 a kg from Rs 70-80 a kg last season."

However, the market could remain firm as there is a possibility of exhausting carry forward stocks before the new crop hits the market.

According to commodity analysts at Angel Commodities, in the coming season, production could increase to 1.8 million bags against 1.6 lakh bags last season. They added that the overall consumption, including exports, could reach 2.2 million bags in 2008.

On the National Commodity and Derivatives Exchange, the jeera contract for January delivery closed on Thursday at Rs 10,091 a quintal against the previous close of Rs 9,976.

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STEPPING OUT

Low stocks, surge in demand are pushing the prices up

Spot prices are up by Rs 4-5 a kg, could jump by another Rs 2-3

January contract could scale up to Rs 10,500 a quintal

Warm weather in major growing areas could impact yield

Carry forward stocks are likely to be exhausted

Production is likely to be 1.8 million bags in 2008

New crop to hit the market by mid-February