On NCDEX, September coriander futures are expected to move towards Rs 7,200.
Coriander seed, better known as dhaniya, is a rabi spice sown in October-December period largely in Madhya Pradesh, Rajasthan and Gujarat. The crop harvested from February to April.
Cooler temperatures with good water content in the soil improve the yield. Prices, too, play a critical role. Higher prices are generally announced to encourage sowing of the seed which is a kitchen staple. Lower prices can lead to farmers switching to other crops such as mustard, garlic and chana.
In India, several varieties of coriander are grown. Badami, Eagle, Scooter, Single Parrot, Double Parrot and Special Ggreen are the most popular. Prices differ across varieties and determined by the quality and moisture content.
The variant that is listed on the NCDEX is the Badami, which is light brown. India is among the top producers and exporters of coriander seed. Russia, Bulgaria and Italy are the other major growers of the seed.
NCDEX coriander future price traded higher in July and August, so far, owing to easing of lockdown in Madhya Pradesh, Gujarat and Rajasthan.
Increased buying is supporting spot and the future prices. But prices are currently sustaining at Rs 6,400-6,500 per quintal levels amid higher stocks from last year and reports of higher production for 2019-20.
On August 11, NCDEX coriander future price closed at Rs 6,586 per quintal, 4.87 percent higher compared to Rs 6,280 on June 30.
For the coming month, we are expecting coriander futures to witness uptrend as traders continue buying around Rs 65-66 per kg levels in the major mandis of Kota Ramganj (Rajasthan), Rajkot (Gujarat) and Guna and Neemuch (MadhyaPradesh).
So far, buying by masala (spice) millers has been 80-85 percent of their total capacity and could increase in the coming weeks as traders are forecast lower stocks for the year 2019-20 ahead of the sowing season.
Exports are still lagging behind amid rising coronavirus worries. India imports coriander seeds from Russia and Bulgaria in the June-August period as the seeds from these countries have a higher medicinal value. This could cap extreme bullishness in NCDEX coriander prices in the month ahead.
We are bullish on NCDEX coriander September futures and prices are expected to move towards Rs 7,200 levels in the month ahead.
(The author is Executive Director at Choice Broking.)Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.