Jeera prices plunge on higher arrivals

Jeera(cumin seed) seems to be on a slippery ground with prices plunging amid heavy arrivals and dismal export demand. The prices are ruling in the range of Rs 12,500 to Rs 14,000 per quintal at the spot market in Unjha after hitting a peak of Rs 18,000 per quintal in March.

In the futures market, jeera prices have tumbled to Rs 15,152 per quintal on NCDEX recently, after hitting the peak of Rs 17,461 per quintal on March 2, 2011. According to market insiders, the bearish trend may persist for a longer period as international crop outlook from Syria and Turkey is yet to come out.

Besides the international factors, the fall in prices was attributed to the increased arrivals and poor export demand. "The arrivals of jeera are high in the range of 25,000 to 28,000 bags of 60 kg each at Unjha mandi but the sentiment among the buyers is negative, hence prices are severely under pressure. Export demand is very low. Additionally, there is cash constraint for the traders too, which also adding pressure on the prices," said Gaurangbhai Patel, president, Unjha APMC.

Overseas buyers are believed to be refraining from placing fresh orders as the production data from Turkey and Syria are due to be announced in May-June. Since export demand stays low and arrivals continue to remain high at the mandis, traders fear a further crash in jeera prices.

On the technical grounds, analysts believe that jeera had already entered into the bearish zone. It is feared that if prices fail to recover from its current lower levels, they may fall further. According to analysts, jeera prices had witnessed a steep fall during past four trading sessions, breaching the technical trend-line for the year 2010.

"Technically, jeera has entered into the bearish zone. At the current price levels, the immediate delivery contract on NCDEX may find support near Rs 14,700 per quintal. If it breaches this level in next one week, the prices may slip below Rs 14,000 per quintal and may stay lower for a month more," said Jagdeep Garewal, a commodity analyst at Kunverji Commodities in Ahmedabad. However, Garewal also expressed a hope of revival in prices from a level of Rs 15,750 per quintal. But in absence of strong demand support, the possibility of prices falling further was believed to be more prominent than a possible revival.

Meanwhile, jeera production in the country is expected to remain at around 2.8-3 million bags (a bag=60 kg) or roughly around 150,000 tonnes for the current season. India is the largest producer and consumer of jeera (cumin seed) in the world. Northern part of Gujarat, Saurashtra and Rajasthan are the key regions producing jeera. The country exports the spice commodity to the countries like Brazil, Japan, Malaysia, UAE and the UK.