After wild swing, jeera prices fall 22% on hopes of higher output

Prices jumped 140% till Jan; farmers expect a repeat as heat wave, shift to other crops may keep output down

Jeetendra Ahir, a native of Chobari village in Bhachau taluka of Gujarat’s Kutch district, is worried that the heat wave being witnessed over parts of western India might lower the yield of his standing jeera (cumin seed) crop.

One additional concern for Ahir is the fact that jeera prices, which shot up by over 90 per cent in 2022, before hitting a record high of Rs 37,990 a quintal on January 16, 2023 because of low output, have fallen about 22 per cent since then to below Rs 30,000 a quintal because of fresh arrivals. 

However, Ahir feels this (the drop) is temporary and once traders and stockists fill their warehouses, prices will start rising again.

“This is because over the last few years, there has been a shift in acreage from jeera towards more lucrative and staple crops such as wheat, dhaniya (coriander), and saunf (fennel) in the main growing regions of Saurashtra and Kutch in Gujarat,” he says over the phone.

The belt that spans the districts of Kutch, Banaskantha, Sabarkantha, and Mehsana in Gujarat accounts for almost 55-60 per cent of the country’s annual jeera production and Asia’s largest wholesale market for jeera located in Unjha in the region.

Jeera is sown around October, the harvest begins in February and arrivals peak in March.

According to some reports, jeera acreage in Gujarat has dropped to around 0.27 million hectares in the 2022-23 season 0.30 million hectares last year and less than 70 per cent of the last three years’ average acreage.

“Apart from a shift towards wheat and dhaniya, jeera yields are also going down in this belt due to several other factors, including pest and insect attacks, while the cost of production is rising due to increased input costs, which is making the crop less lucrative,” Ahir said.

He said for farmers with limited means jeera was a losing proposition as they were being compelled to liquidate their produce when prices were low, and when prices touched record highs there was little of the harvest left to sell.

According to a NCDEX report in January, the annual inflation in spices was firm at 16.1 per cent, driven largely by record high increase in prices of jeera, which saw annual inflation hovering at all-time high of 81 per cent due to tight supplies amid lower inventories.

According to Tarun Satsangi, AGM (commodity research) at Origo Commodities, jeera production in 2022-23 is expected to be better than initial estimates because of some improvement in Gujarat, the main growing state, which is causing the present bearish sentiment in prices.

“In the last crop year (2021-22), production was about 6.5 million bags (1 bag = 60kgs) against previous years’ (2020-21) crop size of about 8.5-9.0 million bags. This crop year (2022-23), production is estimated between 7-7.5 million bags against a preliminary estimate of 6.5 million bags,” Satsangi said.

“But still bulk demand is pretty weak as of now as traders are expecting a further drop in the prices in the coming days. The arrivals of new crops will further gain pace by February end or first week of March, which will take the prices further down to Rs 27,000-25,000 per quintal,” Satsangi said.

He said NCDEX has extended a 2.5 per cent additional margin on jeera’s current and future contracts, adding further pressure on prices.

But, for farmers like Ahir, the bearish prices at the time of harvest and the repeated impact of high temperatures both at the sowing stage and during harvest is a signal to switch to other crops.