Zeera (cumin) has gained approximately 28% year on year. Prices during the end of 2020 near 12600 Rs/qtl, and were attractive for the exporters as well as the stockists and retailers. Presently the commodity is being traded near 16000 Rs/qtl. As local and overseas consumption started improving, the market began moving upwards.
The rise in the geo-political crisis in Afghanistan generated fears of a halt in import supplies and added to the positive trend. As the customs duty on products from Afghanistan stood lower, most traders had refrained from exploring alternate destinations. But now the prevailing situation may force them to change their decision. Jeera had reversed from the bullish trend between April and July 2021 and resumed the upward journey after July.
Rise in export demand, the decline in the 2020-21 production as well as carryover stock estimates kept trade sentiments strong. The production in Syria had fallen by roughly 25-30 percent in 2021, versus the previous year because of political instability. Exports of Indian cumin usually decrease after July-August every year when Turkey and Syria used to supply the global consumers. Because of the poor crop situation in these countries, exports were not feasible. Therefore most exporters switched to Indian cumin seed this time, and this factor continued supporting the markets. Sowing of the crop is over and chances for a fall in the cropped area are higher, versus previous year.
The estimated jeera production for the crop year 2020-21 may be lower by 30-35% on account of decline in sown area and lower yield (because of adverse weather prevailing) in the major producing states Gujarat and Rajasthan. The cropped area has fallen due to a shift towards other crops like cotton, soybean and mustard, which offered lucrative returns last year.
In response to the cheaper price levels and increased demand for immunity-boosting spices, export prospects appear brighter for this year. The export of cumin is increasing continuously and in the coming days, the export sales are expected to continue with greater quantity. Interestingly the traditional importers from Syria and Turkey have started purchasing cumin seeds from India. Even the production in Afghanistan and Iran is lower this year due to which India’s export potential has improved further. These two countries also have some presence in the exports market.
The carry forward inventory is pegged lower versus last year, as consumption is likely to remain stable while production estimate is revised lower. All in all we remain bullish in Jeera and we do not expect prices to sustain below the 14000 level, even during the peak supply season (usually Apr-May) of the 2021-22 crop. Considering the production estimate dropping by nearly 30-40 percent over last season, and stable demand situation, there are expectations of prices to touch even 20000 levels this year.
