For the past two years coriander prices have remained sluggish, though prices started recovering in the second half of last year. Lesser production in both domestic and the international market are expected to support coriander prices in the coming months.
Coriander prices have been trading under pressure since hitting the level of Rs 8,396 per quintal in August 2016. Spot prices of Badami variety of coriander declined by over 44 per cent to touch Rs 4,595 per quintal in October 2017, owing to higher production in the past two years.
Coriander production in the year 2017-18 had increased by 3.95 per cent at 8.68 lakh metric tonnnes against 8.35 lakh metric tonnes during 2016-17. Madhya Pradesh, the major coriander producing state in India, registered an increase in production at 3.91 lakh metric tonnes over 3.87 lakh metric tonnes production in 2016-17. Coriander crop is mostly grown in Rajasthan, Gujarat and Madhya Pradesh.
However, coriander prices gathered some strength post June 2018, after hitting a low of Rs. 4,806. Prices gained from reports of lower arrivals and decline in acreage because of dry conditions in Rajasthan and Gujarat, the two key producing states. Coriander acreage during 2017-18 declined by 13 per cent at 6.64 lakh hectares as compared to 7.64 lakh hectares during 2016-17.
The acreage is expected to be lower in 2018-19 as well due to deficient monsoon rainfall in Gujarat and most parts of Rajasthan. Moreover, sluggish prices of coriander made farmers prefer other crops. As farmers in Gujarat switched to jeera due to higher returns, coriander acreage is lagging behind badly. Just 300 hectares has been sown as of January compared to 7,600 hectares during the same period last year. Besides, sowing had not started in Madhya Pradesh and Rajasthan in January, said Sanjay Kaul, MD and CEO of NCML.
Further, dry conditions in Gujarat and Rajasthan may hit the standing crop and bring down the yield this year. Global production of coriander is estimated to be around 11.85 lakh tonnes and India is the largest producer of coriander, accounting for almost half of the global production. Russia, Mexico and Iran are the other major coriander producing countries. In Ukraine, Bulgaria and Russia, crop is estimated to roughly half of what it was last year. Due to the shortfall in most of the major producing countries, global coriander production is estimated to decline by 40 per cent this year.
This supply concerns are expected to support prices in the coming months. Further, export demand too has been high. Coriander exports in financial year 2017-18 increased by 16 per cent to 35,185 tonnes compared to 30,300 tonnes in 2016-17. During April to September period of 2018-19 coriander exports increased by 47 per cent to 20,684 tonnes against 13,993 tonnes during the corresponding period last year. Malaysia, Egypt, UAE and Saudi Arabia were the main buyers of Indian coriander. This demand is likely to go even higher in the remaining months of the fiscal as well as the initial months of 2019-20 as the output by the other producers are going to be lesser.
“Looking ahead we can expect prices to continue its current momentum entering into the first quarter of 2019. Strong resistance is seen standing at Rs. 7,400 which if crossed can result in further strength in prices towards Rs. 8,200. Resistance range of Rs. 8,200-8,400 is unlikely to be taken out in the near future. Some technical selling can be witnessed around price levels of Rs 8,400. Overall the yearly trading range in coriander can be pegged between Rs 8,400 on the higher side and Rs. 5,700 on the lower side with upward bias during most part of 2019,” said Kaul.