Cumin seed, turmeric hit upper circuit in futures trade

Both commodities rise 4% on higher export demand and lower output estimates this harvesting season

Cumin seed and turmeric hit the upper circuits on the National Commodity & Derivatives Exchange (NCDEX), due to rising demand from abroad and lower output estimates this harvesting season, following a steep decline in their sowing.

For delivery in March, cumin seed (jeera) jumped almost four per cent by Rs 565 to trade at Rs 14,795 a quintal; far-month contracts moved in a similar range. Turmeric for delivery in April rose four per cent or Rs 320 to trade at Rs 8,322 a qtl. Far-month contracts also shot up in futures trade.

“Both cumin seed and turmeric have been bullish for several months, on estimates of lower production. Farmers shifted sowing to coriander, which has offered around 40 per cent returns in the past two years. A further rise in spices cannot be ruled out,” said Ajay Kedia, managing director of Kedia Commodity Comtrade.

Export demand has remained robust. To boost these further, a delegation chaired by R K Jain, chairman of Indian Merchants’ Chamber, visited Sri Lanka early this month. Yogesh Mehta, co-chairman of the Chamber, said: “India faces huge problems in terms of spices export to Sri Lanka, due to preferential treatment granted by Sri Lanka to Pakistan and China. We hope our visit would bring fruitful results.”

Trade sources estimate a 29 per cent decline in jeera sowing to 603,000 hectares so far this rabi season in two major growing states, Gujarat and Rajasthan, compared to the same time last year. The standing crop was also hit by an erratic monsoon in January. Sowing of turmeric has also been less by at least 10 per cent this year, due to a delayed monsoon and, thereby, lack of soil moisture this year, beside weak realisation last year. There are also concerns over crop loss due to Cyclone Hudhud which hit Andhra in October 2014.

Among other spices, coriander, which has recorded two years of price rise, of around 40 per cent and 36 per cent, respectively, fell three per cent on NCDEX. The variety for delivery in April was traded at Rs 7,131 a qtl on Monday, a decline of 2.1 per cent or Rs 154 from the previous close. Chili Teja contracts for delivery in April posted a decline of 1.25 per cent or Rs 102 to quote at Rs 8,058 a qtl in the afternoon trade.

Extra export orders of jeera are coming to India due to geopolitical tension in Syria and Turkey. Jeera exports were 87,500 tonnes in the first six months (April-September) of 2014-15, a rise of 25 per cent from the corresponding period of the previous year.