Volatile trend ahead of festival season spices up jeera

Ahmedabad, August 15:  

Jeera prices have surged over ₹1,000 per quintal in the past two months on short supplies and higher demand as the festival season is set to begin. While supplies are still short, trader sources indicated further volatility ahead for the commodity.

However, at the National Commodity and Derivatives Exchange (NCDEX), jeera for immediate month delivery fell on Monday to close at ₹19,005 per quintal, down ₹135 from the previous close.

Spices trader Bhavesh Patel from BT Enterprises in Unjha stated that lower availability of the commodity with stockists has pushed up the prices. “In the international market, too, the supply was thin, thereby leading to an increase in Indian jeera demand overseas. This has jacked up the prices in the past month,” said Patel, adding that the trend may continue till the September-October festival season.

Output down

Jeera production in India fell 13 per cent on a year-on-year basis to 3.87 lakh tonnes in 2016-17. Reduced production in the previous season caused lower carryover stock, which is seen as a factor for prices rising in the run-up to festival season.

As anticipated by the Seeds and Spices Stakeholders Association (SSSA), arrivals from Syria and Turkey to the global markets failed to add sufficient quantities. “The carryover stock was almost nil and at one of the lowest levels of the past decade. This is due to lower crop scenario. Turkey and Syria were expected to add some volumes to global markets around June-July. India will continue to be a major supplier to the world and that will keep prices firm,” said Ashwin Nayak, a member of SSSA.

Analysts maintained that the monsoon fury in parts of Gujarat and Rajasthan, where a large part of the jeera crop was stored, is feared to have caused some damage and quality issues may see prices escalating further.

In its weekly analysis Angel Commodities indicated volatile price movement in jeera. “NCDEX Jeera for September delivery contract gained on Friday but closed lower by 0.76 per cent or ₹150 to close at ₹19,525 per quintal on Friday as market participants initiated fresh selling at higher levels.

“The prices have been quite volatile touching the high level of ₹19,725 on reports of lower arrivals in Gujarat on expectation of damage to stored jeera due to heavy rains,” said Ritesh Kumar Sahu, Fundamental Analyst – Agri Commodities, Angel Commodities Broking.

Data released by the government showed that Jeera exports during the first five months in 2017 were at 5,039 tonnes, up 9.7 per cent compared to the export volume during the same period last year.

(This article was published on August 15, 2017)

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