Increasing demand from the stockists, bulk buyers and expectation of improving exports in coming month supported jeera futures to move more than 9 percent or Rs 1,400 and climb to 3-month high in the month of April.
Earlier in January, new season jeera futures National Commodities and Derivative Exchange (NCDEX) opened with the price of over Rs 17,100 but slipped to the lows of Rs 15,100 in one-month period on reports of higher production prospects and steady demand from the physical market players.
Jeera exports are on the rise and reports of crop damage in other jeera producing countries are supporting the rise in prices during the last one month.
Investors and traders are also keeping a close eye on fresh arrivals and the damage caused to the quality of jeera crop in recent unseasonal rains and storms in Rajasthan and Gujarat.
NCDEX jeera futures are heading for fifth consecutive weekly gain this week (last week of April) and jeera futures are higher by about 8-10 percent in the current year compared to last year, despite higher arrivals in the physical market
According to Agmarknet, jeera arrivals during the first 20-days of April is pegged at 63,580 tonne compared to 23,000 tonne during the same period last year. Moreover, new season jeera arrivals in 2019 almost doubled this year compared to last year arrivals at 1.34 lakh tonne.
Further, the market is expecting a higher output of jeera this year. According to market sources, output in India will be higher than five lakh tonne in 2019, which is about 10 percent higher compared to the previous year.
In 2019, Rajasthan will be number one jeera producing state followed by Gujarat and Haryana due to higher acreage and improved yield amid good climatic conditions. The market is expecting production in excess of 2.5 lakh tonne in Rajasthan, up by about 20 percent this year while in Gujarat output is expected to be lower by 25 percent at 2.2 lakh tonne as per the second advance estimates from the Gujarat government, compared to last year production of 2.97 lakh tonne.
According to market sources, India's export of jeera is likely to cross 1.80 lakh tonne, up 12.5 percent on-year, as prices were lower during Feb-March.
According to data compiled and published by DGCIS, jeera shipment is higher by 24.8 percent at 1.46 lakh tonne during the first 10-months of 2018/19 financial year. In January, the country exported 9,429 tonne of jeera, up 20.8 percent on year compared to 7,800 tonne last year. The jeera exports figures for February and March are expected to be higher.
Outlook
Currently, jeera futures are trading higher compared to last year despite larger supplies backed by steadily increasing demand for good quality crop from exporters. In the current month (April), we have observed improving demand for the jeera from the bulk buyers and stockists after unseasonal rains hit the top two jeera growing states – Gujarat and Rajasthan.
Moreover, new crop from Syria and Turkey is expected to come in the international market from May onwards and there is uncertainty over production volumes in those countries. Overall, jeera availability will be higher this season but going forward the export demand from the country will play a major role in price movement. We expect jeera prices to cross Rs 18,000 per 100 kg in the medium term.
Source :- Moneycontrol.com
