Coriander prices rise on poor sowing

Tags: News

Farmers shift to more remunerative crops such as mustard seed and chana

With the commencement of sowing in Oct­ober, coriander futures witnessed a decline of almost 10 per cent between mid-October and early Nove­mber. However, the correction was short-lived as sowing did not gain momentum. Prices have recovered sharply from lower levels since early November, due to lower sowing figures in the major producing belts of Rajasthan and Madhya Pradesh.

Also, coriander futures are trading lower taking cues from spot markets, where ample supplies and subdued demand weighed on prices. The daily arrivals in major markets in Rajasthan are around 12,000-15,000 bags. The price for the spice in Kota traded at around Rs 5,000 per 100 kg.

Many farmers have shifted to more remunerative crops such as mustard seed in Rajasthan and chana in Madhya Pradesh. Prices touched a contract high of Rs 5,245 per quintal earlier this week for the December contract, rising sharply by 18.5 per cent. At present, coriander futures are trading at Rs 5,000 per quintal for the December contract.

According to market sources, production in 2011-12 stood at about 100 lakh bags of 40 kg each. There was a bumper production due to an extended monsoon and favourable climatic conditions, which helped increase the yield. However, with a delay in the harvest of the kharif crop as well as expectations of a colder winter season this season, the yield is expected to be lower than last year.

India is the largest exporter of coriander in the world. India exported 28,100 tonnes of coriander in 2011-12 as against 40,000 tonnes in 2010-11, down by about 30 per cent. Export target set for the financial year 2012-13 is set at 35,000 tonnes, unchanged compared with last year.

“In the near-term, we expect coriander prices to take cues from the sowing progress. Although acreage is expected to remain lower this season, higher carryover stocks may cap sharp upside in the prices,” said senior analyst – agri commodities at Angel Commodities.

“It is necessary to keep a close watch on weather conditions, as extreme winters may lead to crop damages and would support the upside in the prices over the medium-term,” she added.

According to C P Krish­nan, whole-time director at Geojit Comtrade, “Expec­ted rise in demand from domestic and export market may limit sharp fall in prices. In eastern Europe, the production is estimated to be lower as severe winter and subsequent drought in the summer has impacted the crop. Also, likely fall in acreage in key growing region in India during the ongoing rabi season could support the prices. The area covered under coriander in Madhya Pradesh and Rajasthan is estimated to be lower by around 30-40 per cent.

Reports of weak carryover stocks in Ramganj mandi in Kota might also add some buying in coriander market.”

Technically, NCDEX coriander January contract is having major support at Rs 4,860/4,600 levels and resistance may be seen at Rs 5,250-5,450 levels in the near-term, says Narvekar.

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