Cumin prices set to rise as export demand picks up

Cumin prices had shot up by 100-200 percent to Rs 500-700 per kg in June- October 2023

Higher export demand may prop up cumin (jeera) prices in the coming months, despite a sharp plunge from the peak levels in October.
Sowing for the new season is progressing in Gujarat and Rajasthan, two key producers of the spice.

Export demand had slackened in the last few months as cumin prices surged. India is the largest producer of cumin, which is also the second-largest single spice, after chilli, to be exported from the country.

Cumin prices had shot up by 100-200 percent to Rs 500-700 per kg in June- October 2023, from a year ago on the back of a shortfall in crop, particularly in Gujarat, worsened by the untimely rains at the time of harvest in March-April.

Runaway increase in prices hit export volumes hard. Spices Board data show that export quantity slumped 24 percent to 69,779 tonnes in April-August 2023 from the same period the previous year.

However, the high prices ensured that the plunge did not hit the earnings of the exporters, which saw a 26 percent rise at Rs 2,426 crore. In FY23, cumin export touched 1,86,508 tonnes, worth Rs 4,194 crore.

Cumin prices drop

Cumin prices have dropped from the all-time-high levels to around Rs 450 per kg now, with the sowing for the new crop progressing in Gujarat and Rajasthan. Though the price is still much higher than last year, export demand has rebounded.

``We are getting a lot of export enquiries, with prices coming down, as globally, India is the lone supplier of the spice now. The stock in other cumin-producing countries, such as Syria and Turkey, is over,’’ said Mayur Vaghani, owner of B J International, an exporter.

The historic highs reached by cumin (jeera) prices this year are expected to raise its acreage for the new season at the expense of other spices like coriander, which is also grown on large scale in Gujarat and Rajasthan. Both cumin and coriander are two key seed spices that have good demand in the domestic market and are sought after, more by curry powder makers.

``The cumin acreage for the next season is expected to be more. And the casualty could be coriander, the prices of which have been ruling low this year. But unless the sowing is significantly higher, it is difficult to see cumin prices falling below Rs 400 per kg. The importers seem to be waiting for prices to stabilise,’’ said Jay Chandarana, CEO, Dhaval Agri Exports. He reckons that prices could stabilise at the current level.

Current stock may not meet demand

According to Vaghani, the current stock of 9-10 lakh bags (each of 55kg) will not be sufficient to meet the demand till the next harvest, especially as the Ramadan demand from West Asian countries is expected to start by December-January.

``We may need 12-14 lakh bags in the next few months with at least half of it for export and the rest for the domestic market. I feel the prices may move above Rs 500 per kg because of the robust demand,’’ he said.

Vaghani cautioned that while the cumin acreage could increase one-and-a-half times, it need not translate into higher yield as the weather will play a role. ``Cumin needs cool temperatures at night. If El Nino sets in, it could upset calculations as dry conditions could prevail. Untimely rains at the time of harvest by March could also affect yield.’’

Even the current price levels of around Rs 450 is quite remunerative for the farmer as it is over Rs 200 -- the price a year ago. The industry is expecting a sharp slide in prices only if there is a bumper harvest next year. This can happen only if the weather stays good.

Meanwhile, with coriander-sowing going sluggish, its prices have started moving up slightly. As many farmers prefer cumin to coriander this year, the acreage for coriander is expected to go down for the next season.
``Coriander prices have risen by Rs 5 to around Rs 65 per kg. But I don’t expect a large increase in prices despite a decline in sowing area as the carryover stock is still good,’’ said P C K Maheswaran, partner, P C Kannan & Co.

At the time of harvest next March, he expects the inventory to be around 75 lakh bags (40 kg each), which is good, according to him. As per Spices Board figures, coriander production at 8,47,190 tonnes in FY23 showed a 15 percent increase over the previous year.