Jeera futures top ₹60,000 a quintal, up 90% on NCDEX in 2023
Jira Cummins prices, which have doubled since the beginning of the year, crossed 60,000 euros this week, with September contracts closing at $61,080 on Tuesday, after rising to an intraday high of 61,740 euros.
In the physical market, prices at Unjha Agricultural Produce Marketing Commission (APMC) yards typical price (the rate at which most deals are done) for spice seeds were Rs 57,000 on Tuesday. It rose to a high of ₹58,625 on 6 July.
Anu V Pai, Commodities Research Analyst at Geojit Financial Services, said jeera prices have soared to record highs, crossing INR 60,000 and gaining around 90 percent so far this year on NCDEX. “Concerns about production amid strong demand, especially demand for exports, have boosted neighborhood prices,” Pai said.
“The jeera market is already saturated. However, the next harvest is only expected in February-March 2024. Supplies are insufficient as only 70-72 bags (50 kg each) are available against the total demand of 85 sacks, including exports.” Ankit Agarwal, Director, Amar Agarwal Foods India Pvt Ltd.
According to Agriwatch, strong sentiment is being observed in the jeera sport market as a 4.11 percent drop in production this year has led to lower supplies. “The projected supply of AgriWatch in the current marketing year is likely to decline by 13 percent compared to last year, leading to lower end stocks in the spot markets,” said Biplab Sarma, Senior Research Analyst – Commodities (Spices).
Unfavorable weather
Geojit Financial Services analyst said unfavorable weather in the major growing Jeera regions of Gujarat and Rajasthan in March and April this year adversely affected production.
Pai said that while the Spice Council’s first advance estimates for the year 2022-23 show a 12 percent increase in production at 627,031 tons compared to 2021-22, market estimates show otherwise. Traders estimate it to be down 8-12 percent at 6.5 million bags versus the initial estimate of 7.5 million bags.
In January at the International Spice Conference, jeera production, which fell by 20 percent last season to 3.88 liters, was expected to reach 4.14 liters this season. As a result, global production increased at 4.35 liters versus 4.08 liters. However, net supplies from India are expected to decline by 7 percent and prices are expected to remain on the rise, according to a report by ITC Ltd.
Unseasonal rains in March and a heat wave in April affected the crop, particularly in Gujarat and Rajasthan exacerbating the situation.
Geojit Financial said in a note that the production of jeera in Gujarat is estimated to drop by 9.3 percent to 2,000 tons. “The problem with supplies is that exports from Syria and China are not happening,” Agarwal said, adding that there was no bearish sentiment at all in Jeera.
According to the Spice Council, Jeera exports fell 14 percent year-on-year to 1,86,509 tons in the last fiscal year.
Despite the record high prices, Agarwal said his company has not asked its customers to stop buying the spice. “We expect prices to go up another 20-25 percent, and at the moment, traders are in a tight position,” he said.
Sarma of AgriWatch said buyers in the local market are expected to become more active as the next new crop will only come in the last week of February 2024.
Agarwal said that in view of the high prices, farmers could shift to Jeera from Lamb (coriander) this year in Rajasthan. “This way, things are looking good Lamb,” He said.