Jeera to see more correction after roller-coaster ride

Jeera market has been quite turbulent for the past few quarters, more so in 2018. Prices are expected to correct in the coming months on improving acreage, sufficient stocks and expectation of drop in exports volume.

In December 2017, jeera prices had touched all-time high of Rs 22,360 per quintal. In January 2018, as the new season crop started arriving in the market, prices came down to around Rs 17,730 per quintal. Reports about a bumper crop put pressure on the rates. Due to record high prices in 2017, farmers in Gujarat, the largest producer, had preferred jeera to wheat, coriander and pulses as they had made good profits. Jeera production in Gujarat itself had increased by 45 per cent to 288,000 tonnes. Prices further collapsed to Rs 14,010 per quintal by March, said Ritesh Kumar Sahu, fundamental analyst, agri commodities, Angel Broking.

By April-July, jeera futures surged more than 27 per cent supported by robust export demand. India was the only source for the jeera due to lower than expected output in Syria and Turkey. Prices bounced back to Rs 21,760 per quintal by then. Cumin exports are higher in current financial year due to lower prices during the start of new season. As per the government data, cumin seed exports during the first seven months of 2017-18 stood at 120,000 tonnes compared to 90,363 tonnes in the same period last year.

However, surging prices curbed the demand. During the last two quarters, Jeera prices had corrected after surging higher due to declining export demand. Monthly volumes of cumin export were found to be declining over the last 5-6 months due to increase in prices.

But sowing reports provided some support to prices. Jeera sowing started rather slowly due to dry conditions and warmer winters in Saurashtra and North Gujarat region. Gujarat also had received lower than average rains. Jeera acreage in Gujarat as in December 2018 was 3.21 lakh hectares, 13.2 per cent down from 3.48 lakh hectares during the same time last year. Currently prices are trading around Rs 17,550 per quintal levels. 

However, reports of increased availability of water for irrigation in Gujarat and parts of Rajasthan have started rising expectations of increased acreage and better crop. Hence going ahead, prices are expected to see further correction.

“Currently jeera futures are in correction mode due to improving acreage, sufficient stocks and expectation of drop in exports volume. In the physical market, stockists have started to clear their stocks before the new sowing season starts in next two months. After touching highest levels in November, it is currently heading for third monthly loss on concern about slowing down in exports at higher levels. Thus, we expect Jeera to correct further in short to medium term to Rs 16,500-17,000 in next couple of months,” said Sahu.

“For the next year we expect jeera prices to find support at Rs 15,000-14,500, while resistance is observed in the range of Rs 20,300 – 20,700 levels,” he added.