Jeera market witnessing bearish phase on sluggish demand, good stocks.

The jeera market is witnessing a bearish phase due to sluggish demand and good stocks. The sentiment is also being affected by reports that sowing for the next season could be higher due to good rains.

India is the world’s largest producer and consumer of jeera. While India consumes 75-80% of the commodity produced, the other producing countries export most of the product.

“The demand is very poor and the stocks are plenty. Export demand is also lacking. The market is likely to ease due to the good rains in the producing regions,” Nalini Rao of India Infoline told FE.

Jeera is a winter crop sown from October, and farmers mainly depend on rains to moisten the land for sowing. There are also unconfirmed reports in the market about quality issues with the existing stock, including adulteration. This is likely to further depress the market in the current situation, as buyers would stay away from contracts, sources said.
“Jeera arrivals in the Unjha market were pretty good, pressurising prices.

The strength in the Indian rupee against the US is also hurting the export prospects of the commodity,” CP Krishnan of Geojit Comtrade told FE. In NCDEX futures, jeera prices have been trading near a one-year-low level. On Friday, the prices weakened by 0.90% and closed the session at R12,500 a quintal.

Persisting problems in Syria and Turkey may provide some support, as India is major supplier of jeera in the global market. The new crop in Syria and Turkey is harvested in August–September but with tensions escalating in the region, the supply could be hampered. Besides India, jeera is cultivated in Iran, Turkey and in Syria mainly for exports.

“For the next one month, the market would be under pressure. But the downside would be limited as the demand for the winter season usually comes in during this period of the year,” Nalini said. She also expects some farmers to stay away from jeera as the commodity has not given adequate returns in the last two years.

The harvest period in India for cumin starts around February-March. Good monsoon rains in the top producing state of Gujarat raise hopes of another good jeera crop. Jeera production has been very good in the past few years.

Production during 2012-13 is estimated at 3.7 lakh tonne, which is 16% higher than the 5-year average but lower than the production of 2011-12 , which is a record output of 4.6 lakh tonne. According to state-run Spices Board, exports of jeera in 2012-13 stood at 79,900 tonne, an increase of 75% over the previous year.

Indian exports have witnessed a CAGR of 9% over the last 5 years. Exports account for nearly 20% of the production.

Source : financialexpress.com