Higher Output And Lower Exports To Hit Jeera Market.

The jeera market is likely to come under pressure due to higher production and lower export demand from India. The domestic market is likely to ease further when Syria and Turkey come out with their crop figures, traders said.

“Higher production of jeera in 2010-11 at 3,05,000 tonne as compared to 2,85,000 tonne in 2009-10 is weighing on the market. Added with lower exports during the last FY, the market is under pressure,” Faiyaz Hudani at Kotak Commodity Services said. Spot market prices on stood at R143 per kg.

Historical data shows that domestic prices are correlated to exports. Higher exports have translated into firmer domestic market. Exports during 2010-11 stood at 25,000 tonne compared with 32,000 tonne in 2009-10.

“In the current season, sowing was late due to erratic weather in Gujarat and Rajasthan. However, sowing picked up in late November as prices during that period were high. High prices motivated the farmers to cover large area under jeera cultivation,” Faiyaz said.

Besides India, cumin seed or jeera 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 jeera will find good market in overseas countries.

The harvest period in India for cumin starts around February-March. The country is the world’s largest producer and consumer of the commodity. While India consumes 75-80% of the commodity produced, the other producing countries export most of the product.

The global market for jeera shows a lower pressure during June –August due to arrival pressure from Syria, Turkey and Iran.

According to Anand James, Chief analyst, Geojit Comtrade, jeera futures is likely to trade firm in the near-term on improved demand prospective as well as declining trend in arrivals.

“Fresh arrivals were reported around 6,000 bags compared on Monday evening with 7,500 bags in the last trading day. Some export demand is also being reported,” he said.

A sudden drop in jeera 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 during 2007 due to erratic climate. It has improved slightly but is seen much lower that the normal output, sources said.

Source : financialexpress.com