Output, quality concerns dog cumin seed market

Arrivals will decide the direction of the cumin seed (jeera) market this week. The Unjha market, which opened on Monday after a closure of four days, has reportedly experienced far less arrivals. Market sources said the demand was weak on the back of the prevailing high rates.

The Unjha physical market witnessed the arrival of 6,000-7,000 bags (55 kg each), against the normal arrival rate of 15,000-20,000 bags. "The arrival is poor, but it should go up in the next couple of days. We expect the market to be steady as demand is still to pick up," said Mahendra Shah, a Mumbai-based trader.

According to commodity analysts, the demand for cumin seeds is poor owing to the high prices. Both supply and demand would be crucial for deciding the market's direction. However, they did not rule out an overall bullish trend.

Low production apart, quality concerns are making rounds in the market. The overall crop estimates were already low and February rains in parts of Rajasthan (major jeera producing state other than Gujarat) did further damage. A supply of 3-3.5 lakh bags is being expected from the state against the norm, which is more than 5 lakh bags. Arrivals, which picked up momentum by the first week of March, are expected to last till mid- April.

"There is a shortage of good quality jeera crop this season," said Shah.

Market sources said the current jeera produce is no match to the norms set by National Commodity and Derivatives Exchange (Ncdex). According to them, the stock in the exchange's warehouses will be exhausted by the end of the near-month contract.

The overall production estimates for the current year are to the tune of 55,000 tonne against 85,000 tonne last year. As there is no substitute for the crop, pressure is building up on this spice commodity.

In Syria and Turkey (other major jeera producer countries), where sowing has started and the crop is expected only by June-July, market experts opine that the Indian jeera will be in demand.

The country exports jeera mainly to USA, Europe, Japan and South East Asian countries. Between March 2006-March 2007, the country exported around 5 lakh bags, which is now decreasing, as per sources.

On Ncdex, the near-month jeera contract closed on Monday at Rs 12,810 a quintal against the previous close of Rs 12,862 a quintal, down 0.4 per cent. Similarly, the contract for May delivery dropped to Rs 13,261 a quintal from the previous close of Rs 13,303 a quintal.