Kochi: Cumin prices have come down in the last few weeks because of low exports and reports of good crop in the coming season. Traders said the market is estimated to remain weak and bearish in the short-run owing to the arrival pressure of the new crop.
The harvest period in India for cumin starts around February-March. The country is the world’s largest producer and consumer of cumin. While India consumes 75-80% of the commodity produced, the other producing countries export most of the product. “Sluggish demand is seen easing the market and in the near-term, the market would be bearish. The market will get support after March and will revive,” Nalini Rao, analyst with Angel Commodities told FE. “Foreign buyers are not purchasing, they are waiting for the market to stabilise before placing fresh orders,” she said.
Rao said low carryover stocks with traders along with favourable weather, which may help improve the yield of standing crop, is also putting pressure on prices. “Stocks of cumin in Syria, Turkey and India will drive the price in the medium and long-term,” she added.
Besides India, cumin seed is cultivated in Iran, Turkey and in Syria mainly for exports. The new crop in Syria and Turkey is harvested in August–September, so until then, Indian cumin seed will find good market in overseas countries.
“If exports are good, the market would bounce back. The cumin market depends on exports as almost 20-25% of the production is exported,” Faiyaz Hudani at Kotak Commodity Services said.
Historical data shows that domestic prices are correlated to exports. Higher exports have translated into firmer domestic market, he said. “In 2003-04, exports were less than 10,000 tonne and it improved to almost 50,000 tonne by 2008-09. Prices have moved up based on this,” he added.
He expects the crop to be on the higher side because returns have been good in the past few years. The sown area would be definitely on the higher side in Gujarat, which contributes bulk of the production.
A sudden drop in cumin production in Syria and Turkey had helped India achieve impressive exports figures from 2007, a Spices Board official said. “Production dropped by 500-600% in Turkey due to erratic climate. It has improved slightly now but is seen much lower that the normal output,” he added. In the current fiscal, exports are down by almost 5,000 tonne till date. According to estimates of the Spices Board, cumin exports stood at 36,500 tonne during April-December 2009 as against 41,500 tonne during the same period of the previous year.
Source : Financial Express