Strong arrivals dent jeera market, prices nosedive

Continuous rise in arrivals has dented the jeera market. Market trading sources and commodity analysts have termed it a short term phenomena since the spice commodity has strong bullish fundamentals.

The last fortnight has seen arrival rate reaching to the tune of 18,000 bags (each of 55 kg) from the earlier 7,000 bags. Traders said that this season arrival is more than the usual arrival during February.

Dilip Patel, an Unjha-based trader (Unjha is the main delivery center for jeera in Gujarat), said, “The arrival will increase further to 22,000 - 25,000 bags. The rates in the physical market is hovering between Rs 1,900 and Rs 2,100 for a 20 kg bag (Rs 9,500 - 10,500 per quintal).”

However, the quality of the crop is poor due to adverse climatic conditions which prevailed in Gujarat and Rajasthan during the growing period of jeera. Faiyaz Hudani, research analyst at Kotak Commodities, said, “Prices are ruling low only for the short term. Quality is poor as weather was not supportive. This has also impacted the yield.”

At the current low rates, stockists in the market are the main buyers. Some enquiries from the export market too have been reported. “Since, fundamentals are strong, stockists are active in the market to get benefits later in the season,” said an analyst at the Angel Commodities.

The country has a carry forward stock of around 3-4 lakh bags, which, during the same period last season was 8-9 lakh bags. Moreover, the crop size for the current season is expected to be on the downside at around 22-23 lakh bags against 25 lakh bags last year.

So far, the country has exported (April-January) 43 per cent more at 29,750 tonnes against 20,835 tonnes during the same duration last year.

With low carry forward stock and anticipation of lower crop coupled with India remaining the only sources of jeera for the entire world till June, commodity experts said that jeera is heading for a bull run.

Mehul Agrawal, research analyst at Sharekhan Commodities, said, “The jeera market will remain weak for another week or so. I do not see it slipping below Rs 10,900 a quintal. The market will bounce back.” The other jeera producing countries are Turkey, Syria, Iran; where from the arrival is expected only after June.

“In March, we expect demand will pour in and support the slipping jeera market,” added Patel. On the National Commodity and Derivatives Exchange, the near month contract of jeera closed on Thursday at Rs 11,240 a quintal against the previous close of Rs 11,356.