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Jeera prices soar on rising exports |
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Facts first. There are indications that jeera or cumin seed output will fall sharply in Gujarat, one of the major jeera producing states, this year. Output was 3.46 lakh tonnes in the state last year. It may decline this year as acreage is slashed by 42 per cent. Though yield is expected to improve after the rainfall that the state received recently, it is unlikely to cross 2 lakh tonnes. According to agricultural commodity experts, rains in jeera growing states of Gujarat and Rajasthan would certainly be beneficial for the standing crop and that is preventing any strong recovery in prices. Lower sowing area and expected fall in production would, however, keep long-term bullish sentiments intact.
The Union agriculture ministry reports suggest that in Gujarat, normal cumin seed crop area is nearly 388,000 hectares. Till January 5, 2015, only 2.64 lakh hectares had been sown against 4.54 lakh hectares last year. Sowing area during the current year is likely to go down in Gujarat and Rajasthan because of lower cumin price compared with coriander. Growers may shift to coriander and fenugreek seed, the report said.
The latest report from Spices Board of India indicated a pickup in exports during April-Sept 2014 at 87,500 tonnes up from 70,243 tonnes during the same period last year, which is a jump of 25 per cent in quantity and 2 per cent in value. The targeted export of jeera for 2014-15 is 1,00,000 tonnes. One must keep in mind that the Indian produce is of superior quality and, therefore, fetch a premium in the international market.
Significantly, exports have shot up 40 per cent during the first half of the current quarter, thanks to adverse reports from various global producers. It is expected to remain high in coming months too, which could create a bullish sentiment in the long term for the commodity.
When it comes to futures market, according to Emkay Commodities reports, jeera futures exhibited mixed trend on NCDEX as the March contract traded high because of the firming trend in futures market and restricted arrivals in the domestic markets from producing belts. While April contract traded down as speculators reduced their holdings on the back of sluggish demand in the spot market. The contract for March delivery was trading at Rs 14,595, up by 0.03 per cent or Rs 10 from its previous closing of Rs 14,585. The open interest of the contract stood at 15,069 lots.
The contract for April delivery was trading at Rs 14,865, down by 0.17 per cent or Rs 25 from its previous closing of Rs 14,890. The open interest of the contract stood at 7,881 lots on NCDEX.
During the last to last week, NCDEX jeera March prices increased over 9 per cent amid reduced arrivals and expectation of lower crops, and lesser acreage coupled with news of some disease. Delayed arrivals of new crops with reduced quantity compared with last year have provided bullish undertone to the market. Current arrivals of new crop in Unjha are around 200-300 bags per day against average arrivals of 4,000-5,000 bags per day in the previous years. One bag contains 55 kg of the commodity.
Fresh inquiries from exporters are supporting the sentiments, according to Emkay Commodities.
While doing its technical analysis, Emkay Commodities said, “March jeera prices witnessed strong momentum throughout the previous week. Prices can consolidate and drift lower towards Rs 14,750 but buying can trigger a pullback towards Rs 15,600. A break past Rs 15,600 will see further up move towards Rs 15,950. The counter is expected to trade with positive bias.”
Source : mydigitalfc.com
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