Spot Cumin Seed Falls For Second Straight Month On Higher Crop, Subdued Trade

MUMBAI (Commoditiescontrol) – Spot Cumin seed (Jeera) prices dropped for the second straight month in March due to higher crop estimates, new crop supply and subdued trade activity due to financial year closing.

Cumin seed prices slipped 8.23%, at Rs 15,860/100kg at the benchmark Unjha market of Gujarat during the month of March due to poor offtake from traders, stockists and exporters, tracking sharp losses on futures. This was second straight monthly fall in price as cumin seed edged down by 12.13% in February taking total fall of above 20% in the last couple of months.

According to industry sources, the country is expected to produce 3.96 lakh tonnes of cumin seed during marketing year (MY) 2018-19 (March-February), up 26.3% from 3.13 lakh tonnes a year ago.

The balance sheet drawn by commoditiescontrol after brief survey conducted among industry participants revealed that export and domestic consumption is expected slightly better this season, but strong production will result in higher ending stock of 0.85 lakh tonnes compared with 0.13 lakh tonnes a year ago.

Spot cumin seed prices earlier last season on December 21, 2017 reached to record high level of Rs 21,093/100kg as supply-demand balance sheet was tight amid lower crop, but that was not the case this season as better prices prompted farmers to increase acreage under cumin seed at the cost of other crops.

Cumin seed acreage in Gujarat during current season 2017-18 rose by 37.31% at 3.83 lakh hectares versus 2.79 lakh hectares a year ago, according to ministry of state agriculture department. Other hand area under cumin seed in Rajasthan was up by around 4% at 5 lakh hectares, confirmed an official with state horticulture department.

New cumin seed arrivals have started in spot markets, but the pace is significantly lower than market expectations mainly due to farmers reluctance to sell their produce at the lower level. The average daily cumin seed arrivals at Unjha in March 2017 were around 39,000 bags (55kg), but it dropped to just 25,000 bags this March 2018, showing clear evidence that farmers are brining less of their crop. However, the supply is expected to improve ahead from next month onwards.

Demand in cumin seed during this month was not robust as market is facing liquidity crunch due to financial year closing. According to traders, the liquidity issue has intensified as traders in last couple of years have mostly incurred losses due to weak prices of most commodities.

India cumin seed Singapore 99% quality was priced at $2,240-2,250/tonne CIF, Haiphong port (Vietnam), while Singapore 99.5% was available at $2,270-2,280 and Europe 99% quality was offered at 2,350-2,360. Cumin seed Singapore 99% was priced at $2,270-2,300 CIF, Bangladesh.

Domestic and export demand for cumin seed is expected to increase ahead as pipeline is empty here as well as in international markets. Domestic and international buyers during the last couple of months were mostly doing need-based buying due to expectations of fall in prices amid forecast of higher production.

India is the main supplier of cumin seed in the world, while Syria, Turkey and Iran are likely to harvest crop in June-July. There is not much detail about crop sowing in Syria due to civil war, however some experts believe acreage to rise there due to higher rates. Syria is the key competitor as it exports more than 80% of crop and rest is consumed domestically.

Conclusion
Cumin seed prices in the near term may trade steady to negative weighed by prospects of supply to rise ahead. The market is unlikely to absorb supply in case daily arrivals surges to 55,000-60,000 as hedgers are sidelined in the absence of parity.

Futures Market


The most-active April cumin seed futures closed over 4% lower at Rs 14,520/100kg on the National Commodity & Derivatives Exchange Ltd (NCDEX). The contract during the month traded between Rs 14,210-15,100.

Jeera stocks at the NCDEX accredited warehouses as on March 30 stood at 1,430 metric tonnes (MT) as unencumbered and 2,404 MT as pledged stock, while nil stock in process.

TECHNICAL IDEAS:
NCDEX Jeera April Weekly: Further Weakness Is Below 14010 Closing

Traders short and holding the same can maintain the stop loss at 14925.

Support will be at 14300-13790.

Downside momentum will continue on fall and close below 14010.

Pullback can resume above 14925 closing.

(By Commoditiescontrol Bureau; +91-22-40015533)