Jeera prices to stay firm till Jan-end on exports

Decline in stocks, strong demand may push up prices.

The jeera spot and futures prices are likely to stay firm till January-end buoyed by strong export demand and concerns that prevailing weather conditions could lead to crop damage in Rajasthan, traders and analysts said.

Decline in available stocks of jeera in key spot markets and at accredited warehouses of the National Commodity and Derivatives Exchange is also likely to provide some upside to prices.

"Stocks of quality jeera are quite low in Jodhpur spot market," said Anil Mundra, a Jodhpur-based trader.

At NCDEX warehouses, stocks have fallen to 625 tonnes from 1,246 tonnes a week ago.

"The demand for jeera is extremely strong from Singapore and Bangladesh," said Pravin Patel, an Unjha-based trader.

Export enquiries from countries such as Bhutan, Nigeria and New Zealand are also likely to boost exports and firm up prices further in the coming days, Mundra said.

India is in an advantageous position as fresh crop from other major producers such as Syria and Turkey is only expected to start reaching the market by June, which makes India a key player in the exports market.

Also, Indian jeera is widely regarded as being superior to the crop produced by other countries and most buyers are ready to pay a slight premium to buy good quality stocks, traders said.

Traders are concerned that cold and cloudy weather conditions that have been plaguing key jeera-growing regions in Rajasthan may cause some damage to the standing crop.

Rajasthan is the second largest jeera producing state in the country, after Gujarat.

If crop damage takes place, there will be some amount of speculative buying in the commodity and prices will move up on concerns of shortage of the commodity in domestic and export markets, analysts said.

The key factor that traders are eyeing is heavy dewfall, which has the potential to wreck crop prospects.

"Normally, dew that is formed under cold conditions evaporates with sunlight. But, if the weather is cloudy, it remains on the crop causing damage," Bhanubhai Patel said.

Moisture on the crop leads to jeera turning black which makes the quality of the crop turn inferior, traders said.

Fears of crop damage have been compounded by talk of slow growth of the crop due to prevailing weather conditions.

Reports of slow growth of jeera, which may result in delay of arrivals at spot markets, are likely to support prices, said Faiyaz Hudani, analyst, Kotak Commodities.

In just six sessions since January 1, jeera prices have surged nearly Rs 1,000 a quintal in both the January and February contracts on NCDEX. But analysts feel the contracts are due for a further rise of Rs 500 a quintal, although it may witness bouts of profit-booking.

The most active February contract has witnessed a surge in volume to 10,752 tonnes from 2,832 tonnes during the same period.

In December, prices had slipped to around Rs 9,000 a quintal levels due to weak domestic and export demand.

Prices are likely to move in the range of Rs 11,200-12,500 a quintal in the coming weeks, Hudani said.

Monday, prices in the January contract ended at Rs 11,395, up Rs 338 from Saturday, while February contract ended Rs 404 higher at Rs 11,680.

Spot market prices are also likely to witness a rise of around Rs 10-15 a kg in the coming days, traders said.

At Unjha, a key spot market in Gujarat, jeera was ruling at Rs 118 a kg on Monday, around Rs 8 higher than last week, Bhanubhai Patel said.

On Monday, jeera prices at Jodhpur spot market in Rajasthan were around Rs 110 a kg, Mundra said.