India exported around 1.43 lakh tonnes of jeera in FY17-18 and exports in FY18-19 are likely to be around 1.75 lakh tonnes
Jeera/cumin futures have been falling consistently since November 2018 as sowing gained momentum and the weather turned conducive for yield. Robust exports this season earlier pushed prices toward 20,500.
Scanty rains in Gujarat (the largest jeera-growing state) and delay in harvesting of kharif crops led to the slow start of jeera sowing. This kept the undertone positive for the spice till end-October.
Nevertheless, despite drought conditions, jeera sowing increased as lucrative returns for two consecutive years led farmers to opt for jeera. Gujarat farm ministry data show that the area sown with jeera, at 3.45 lakh hectares by late November, down 37% from 2017-18, is now just 9.7% lower than last year.
Moreover, compared to the three-year average, sowing is 8% higher. In the second-largest jeera-growing state, Rajasthan, the sown area is more than last year; however, no official data are available.
Availability of canal water and conducive weather would increase the yield this season and offset acreage losses to some extent. Jeera output in 2018-19 may hover around last year's level. However, the weather is still the determinant for yield as the crop is now in its crucial growth phase.
A large quantity of the 2017-18 produce has been consumed this season due to greater overseas sales in 2018. India exported around 1.43 lakh tonnes of jeera in FY17-18 and exports in FY18-19 are likely to be around 1.75 lakh tonnes. Thus, stocks will be lower this season.
Export and domestic demand are currently subdued and traders are awaiting the new crop arrivals. The new season crop would commence from January-end in Gujarat and from March in Rajasthan. However, due to delayed sowing, arrivals will be lower in February.
After a significant fall, technical bounce cannot be ruled out, but the undertone for jeera remains bearish amid subdued domestic and overseas demand, better crop prospects and the peak arrival period ahead. The adverse weather may bring about a temporary spike in prices, but may not last very long ahead of the harvesting.
The author is Head — Commodity Research & Advisory, Anand Rathi Commodities.Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on Moneycontrol are their own, and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.