Cumin or jeera futures touched a new high on National Commodity and Derivatives Exchange (NCDEX) due to lower crop arrival and closure of spices trading markets in Gujarat in a protest against the introduction of the goods and services tax (GST).
Contracts for delivery in July closed at Rs 202 per kg on Friday, registering a record increase of nearly 9 per cent during the week.
Unjha in Gujarat's Mehsana district, the biggest cumin trading hub of Asia, was shut for several days as traders sought more time to adjust to the new indirect tax regime. This drove up the prices.Gujarat is the largest cumin producer in the country.
"There was scarcity of stocks as the arrivals dropped," said Ritesh Kumar Sahu, research analyst at Angel Commodity Broking.
Cumin output has fallen 13 per cent year-on-year to 3.87 lakh tonnes in 2016-17. "At the same time, export demand has been strong. All these factors led to a record price," said Sahu.
The August contract stood at Rs 199 per kg while the September contract was at Rs 200 per kg, indicating a further rise in prices.
Cumin stocks at the NCDEX are said to be lower than that of last year. "Though the Unjha market has opened, the Rajkot market still remains closed. At present, all the demand is going to Unjha," said Mayur Vaghani, director at BJ International, a major exporter. Export demand has been strong with several West Asian countries and China placing big purchase orders.
"Chinese crop has been lower than expected. But next week, we will see whether buyers are willing to take jeera from India at the current price levels. Even now, we have to pay higher price in the local market to get sufficient load for export," Vaghani said.
Turkey is offering cumin at $2,900 per tonne, which is $100 less than the Indian price, though the quantity on offer is much lower than that offered by India, which continues to be a major cumin supplier to the world market.
Cumin exports from the country rose 22 per cent year-on-year in volume to 1,19,000 tonnes and 28 per cent in value to 1,963 crore in 2016-17.
"Given the demand and shortfall in crop, local prices may touch Rs 230-240 per kg by Diwali," Vaghani said.
Source: economictimes.indiatimes.com