MUMBAI (Commoditiescontrol) - India cumin seed futures reacted sharply in the recent weeks compared with spot market this year so far on strong pressure weighed by prospects of better production this year due to better yield on favorable weather.
Cumin seed futures (first month continuous) dropped more than 5 percent as on February 21 so far this year and over 12 percent from this year's peak level of Rs 19,230/100kg. At the same time cumin seed at the benchmark Unjha market reacted by just over 3 percent and 4.65 percent from peak of Rs 18,766.
Cumin seed futures reacted most as speculators enlarged bearish bet amid reports of better production this season, however spot market was not affected most as supply-demand side was tight amid thin carry over stocks due to lower production in 2016-17 against good domestic and overseas demand.
India has shipped around 83,303 tonnes of cumin seed between April to November compared with 57,870 tonnes same period a year ago. According to industry experts India's April-March (2016-17) likely above 110,000 lakh tonnes, better than 94,352 tonnes in FY 2015-16 thanks to strong demand from China, Bangladesh, US and UAE.
India gets an edge in the global market due to geopolitical issue and lower production in rival countries like Iran and Syria. India harvest cumin seed from Jan-March, whereas harvest starts from May to July in Syria, Turkey, Iran and Afghanistan.
According to industry experts cumin seed crop in the rival countries likely to remain negligible and India will dominate in export market once again in FY 2017-18.
India cumin seed crop for the current marketing year (MY) 2017 (Jan-Dec) is projected at not less than 300,000 metric tonnes (55kg each) thanks to higher yield due to favorable weather offset lower acreage, based on a commoditiescontrol.com survey of ten cumin seed traders, exporters and analysts.
The survey revealed that carryover stocks from previous crop 2016 said to be lowest in recent years at 8,000 metric tonnes due to poor crop last year. Total supply of cumin seed for 2017 marketing year now sum at 308,000 metric tonnes.
About demand side the survey result outcome shows that India is likely to export a decent crop to overseas, while domestic consumption is expected even better due to dry pipeline. India cumin seed exports in MY 2017 likely at 120,000 tonnes, while domestic use pegged at 175,000 metric tonnes, which takes total demand tally at 295,000 metric tonnes.
However survey participants have different view about price outlook as nearly 60 percent are with view that prices are likely to remain in negative side until Holi pressured by higher supply. However remaining 40 percent of participants bets of steady to positive outlook due to thin carry over stocks from previous crop and expected good demand amid empty pipeline.
Cumin seed supply from new crop has started, however demand in the spot markets are said to be better due to empty pipeline amid thin carry over stocks in the country due to lower production last year amid poor rainfall and adverse weather condition.
According to current fundamentals some weakness in cumin seed can't be ruled out for the near term amid rising new crop supply, but long term prospects seems better due to expectations of good domestic demand and robust exports.
TECHNICAL OUTLOOK - LAST UPDATED ON FEB 12 (Click Here Link)
JEERA Unjha – Last Close-18200 : Near Term Correction Possible
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Correction in near term is likely to happen unless immediate breakout and close above 19600 in sustained basis is witnessed.
Correction towards 16900 and 15200 is likely to be seen with volatility as long 19600 is not crossed.
Wave c of Wave ii structure could be in progress.
Conclusion
For near term to short term correction is likely to be witnessed to 16900 and 15200 from where reversal from correction can happen.
Once correction is complete a rally for Wave iii will resume which can take prices higher to 21500 and beyond.
Correction prices from medium to long term point of view can be for accumulation as long as 14000 is not violated in time to come.
(By Commoditiescontrol Bureau; +91-22-40015533)
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