Jeera prices may ease more as exports seen losing steam
Informist, Friday, Dec 29, 2023
By J Navya Sruthi
MUMBAI – The Indian jeera has been in great demand in the overseas market during Nov-Dec, but going ahead the seasonal uptick in shipments is expected to lose steam, experts said. Domestic prices, which have moved down, are likely to continue to move southwards in the absence of robust export demand in coming months, they said.
Analysts see the increase in exports of Jeera in November and December as seasonal and expect prices to fall below 30,000 rupees per 100 kg in 2024.
Exports may fail to cushion jeera prices due to the rise in sowing of the crop by 15-20% in the ongoing rabi season, said Ravi Shankar Pandey, senior analyst at SMC Global Securities.
The Jeera January contract on the NCDEX today ended at 30,900 rupees per 100 kg, down 31% from 44,610 rupees a month ago.
The Indian variety jeera has witnessed a roller-coaster ride in 2023 amid supply concerns last year, subdued export demand, and prospects of higher acreage this year.
Demand for Indian jeera has picked up in recent months due to lower supply from other jeera-producing countries like China, Syria, and Afghanistan, traders said.
“Currently, the price of Indian jeera is the lowest in the world, and so exports picked up during November and December,” said Harsh Patel, director at Jay Dattatray Trading Co. Jeera is currently quoting $4,300-$4,500 per tn in the global market with most of the exports going to China, exporters said.
India exported about 10,000 tn jeera in November and the exports in December and January are likely to exceed that, a Jodhpur-based exporter said on condition of anonymity.
The current momentum in exports is, however, unlikely to cushion the fall in jeera prices as the current rabi crop is projected to be high, experts said.
India produced 627,031 tn of jeera in 2022-23, according to data from the Spices Board Of India.
In the current rabi season, jeera acreage in Gujarat, the largest producer of the spice in the country, more than doubled to 544,099 ha as of Tuesday, state agriculture department data showed. While in Rajasthan the acreage was higher at 668,306 ha compared with 575,970 ha a year ago, according to the state agriculture department data. The two states account for the bulk of the jeera production in India.
Excess availability of jeera in the Indian market has weighed on sentiments and has brought down global rates for the spice, they said. Exports will rise further only if jeera prices fall below 25,000 rupees per 100 kg, Pandey said.
However, Pandey expects jeera prices to briefly hit 45,000-46,000 rupees per 100 kg during the Ramzan period once demand from west Asian countries picks up. Jeera consumption usually rises sharply during the Ramzan period. In 2024, Ramzan will be observed during March-April.
Experts said notwithstanding the recent jump, jeera exports are likely to fall in the current financial year ending March. “On a yearly basis, exports are expected to fall 20% in the current year,” the Jodhpur-based exporter said. India exported 171,414 tn jeera in 2022-23, down 14% from 198,558 tn a year before, according to the Department of Commerce.
Jeera prices had hit an all-time high of 64,000 rupees per 100 kg in September, due to lower domestic production. India imported jeera from China, Syria, and Afghanistan during Jun-Aug to cool down domestic prices. Jeera imports in Apr-Oct rose a staggering 1,122% on year to 15,498 tn, while exports during the same period contracted 34% on year to 76,367 tn. End
