Jeera may gain Rs 3,300 per 20 kg on short supply, quality issue

Jeera prices are expected to move northward as supply of quality crop is low at this time. Traders estimate prices to touch Rs 3,300 for 20 kg by the of March.

According to traders, high demand from stockists has already pushed up jeera prices so far this month. However, muted demand from the exports sector, has helped to cap the prices from moving up further.

There was fear that unseasonal rain (during March) has damaged the quality of jeera crop which may impact prices in the coming days. Currently jeera prices are ruling at Rs 2,800-3,000 per 20 kg bag at the Unjha mandi in Gujarat, one of the largest jeera trading hubs in India, was around Rs 2,400-2,600 per 20 kg bag in the beginning of the month.

"Jeera prices moved up almost 10% in last 10-12days on the back of strong demand from stockists due to tight supply. Prices have witnessed sharp jump after the damage to the standing jeera crop from unseasonal rains and hailstorms. We see the market remaining firm in coming days and prices may go beyond Rs 3,200-3,300 in near future," said Ajay Kumar Kedia of Kedia Commodity Comtrade Private Limited.

Daily arrival is about 35,000 bags (a bag of 40 kg) at the Unjha. Arrivals have slightly improved in past one week but still quality of jeera in new arrival is quite dull. If export demand starts (it usually picks up from April), it will push up jeera prices further.

An Unjha-based jeera trader said, "Arrival will increase but the only issue with the current supply is quality. It is quite dull. Currently, stockists are buying mostly to fulfill upcoming seasonal demand. Export demand has not yet begun, but enquiries have already started."

According to Department of Commerce,Union Government data, the export of jeera during April-December 2015 was 64,430 tonnes, which is, lower compared to last year. Jeera exports was 1.55 lakh tonne in 2014-15.

"Currently export demand is nominal but we are hopeful that it will come soon as price in domestic market is lower", said Girish Brahmbhatt, director of Indian Spices and Foodstuff Exporters' Association.

Fall in International market stocks and a fall in exports from Turkey and Syria are likely to favor Indian exports. A falling Rupee is also beneficial for exporters. Once export start rising, the impact of falling rupee will start affecting the price movement more strongly.

According to Kedia, there are reports of jeera flower dropping in some areas in north Gujarat but Saurashtra crop was also affected due to recent rains, which may have effect on total output. Gujarat yield loss is around 15%. Quality loss is also reported from Gujarat and Rajasthan, where the seeds turned black.