Jeera under pressure on higher production

Financial Express, Rajesh Ravi, Feb 20, 2018


Jeera prices are under pressure on reports of higher production and arrivals in the terminal market.The market is likely to remain bearish until some support is seen in the form of export orders, traders said. India is the world’s largest producer and consumer of jeera. While India consumes 75-80% of the commodity produced, the other producing countries export most of the production. Sunand Subramaniam of Kotak Commodities told FE that the market will be under pressure on higher production and consequent higher arrivals in the market. “Production is estimated to be higher by 35-40% than last year with both Gujarat and Rajasthan reporting increase in acreage. The climate was also conducive and the output is likely to be high. Arrivals are as high as 18,000-20,000 bags per day from Gujarat. More jeera will come into the market when harvest starts in Rajasthan,” he added.
Angel Broking reports that the jeera may trade sideways to down as new season jeera hit the market with high volumes. “Market is expecting higher production from new season may pressurise prices further. However, export demand from lower levels may support prices,” Angel sources said.
On Monday evening, jeera closed lower at Rs 18,683.35 per quintal at the spot market of NCDEX counter. “The acreage is higher by 37% in Gujarat and 15-20% in Rajasthan. Production in 2016-17 is estimated to be 70 lakh bags while some put it lower at 60 lakh bags.Carryover stocks are also on the higher side and the support may come only by March-end in the way of export demand,” Subramaniam said.

Besides India, jeera seed is cultivated in Iran, Turkey and Syria, mainly for exports. The new crop in Syria and Turkey is harvested during August-September. The harvest period in India for jeera starts around February-March. Indian jeera exports are higher for the past few years due to geopolitical tensions in Syria and Turkey. Gujarat is the largest jeera producer followed by Rajasthan. Angel Broking further reports that jeera exports during the first eight months of FY18 is 98,681 tonne, up 15% compared to last year exports volume for the same period, accoding to government data. Spices Board data show that in 2016-17 jeera was farmed in 706,130 hectares and the estimated output is 485,480 tonne.

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