Spurt in cumin prices likely to stay, squeezing supplies, output and exports

Severe short supply is expected to extend the price rally of cumin till the next sowing. (Representative Image)

A surge in cumin prices on the heels of a spurt in coriander seed prices has put Indian spice traders and exporters in a fix.

Cumin is the second largest exported single spice from the country while coriander is sought after mostly by domestic curry powder manufacturers for blending. As cumin prices rallied this year, coriander prices have cooled off temporarily after soaring to high levels last year.

Severe short supply is expected to extend the price rally of cumin till the next sowing. At Rs 700 per kg, cumin prices touched a new peak last month. Though prices have dropped slightly to Rs 600-650 per kg, given the extent of shortage, the spice is likely to remain costly at least till October-November.

Last year, coriander prices reached a six-year high of Rs 110 per kg. The spice became cheaper after a good harvest in the current season. But traders anticipate a rise in the prices of coriander seeds later this year, as sowing of the crop for the next season is likely to come down.

Spices Board data shows a 13 percent increase in cumin harvest in 2022-23 at 6,27,031 tonnes. However, traders and exporters reckon that the crop could be the same as or less than in 2021-22, when there was 30 percent fall in production vis-s-vis the year before. A weak carryover stock has further squeezed the availability of cumin in the market.

"Though sowing area was higher, the yield was poor in this year’s harvest. After June, export has slowed down with prices surging. The prices are likely to stay high at least for the next two months," said Niraj Patel, CEO of Bright Fame International, an exporter. The domestic demand is expected to rise with the onset of the festival season in September.

Cumin prices have escalated 130-140 percent in the last one year. From Rs 250 -300 in last July, the prices moved up to Rs 400 per kg by January this year and reached Rs 700 per kg last month. The rising prices caused a decline in export volumes, but in terms of value, the earnings were higher. China and Bangladesh are the chief importers of cumin from India.

In 2022-23, India exported 1,86,509 tonnes of cumin valued at Rs 4,194 crore. The quantity is less by 14 percent, but the value is higher by 25 percent from the previous year. India exported more in the first few months of the year as the cumin from the other origins were costly. Syria and Turkey are other major producers of cumin.

"Given the shortage, India may require cumin imports to meet the rising demand. The prices have been quite volatile in the past few months. Exports may come down this year," said Jay Chandarana, CEO, Dhawal Agri Exports.

Cumin is usually sown by October-November. Last year, the late setting in of winter followed immediately by hot days in March affected the crop yield. The copious rainfall received by Gujarat and Rajasthan this year may be beneficial for the next year’s crop though the traders say it is too early to make a prediction.

But high prices of cumin and some other spices may affect coriander output next year as its sowing is likely to be affected. Coriander seed prices dropped 50 percent from last year to Rs 50-52 per kg after a 15 percent increase in output in 2022-23 at 8,47,190 tonnes.

"Coriander has become cheaper now but high prices of cumin and garlic are likely to reduce the sowing. Anticipating a lower crop next year, traders are now buying coriander, which has led to a jump in prices to Rs 62-72 per kg," said P C K Maheswaran, partner P C Kannan & Co., a major coriander trader.

Coriander seeds are the largest used spice in curry powder and its higher cost last year forced curry powder manufacturers to cut down on purchases or hike the prices of their products. "We have already raised the price of our product," said Shery Jose, manager at Moolans International Exim Pvt. Ltd., which markets the Vijay brand of curry powders.

Coriander is chiefly grown in Madhya Pradesh, Gujarat, and Rajasthan. All these states are big producers of cumin and garlic, the prices of which have shot up this year. Hence, it is expected that the farmers will sow more of these crops rather than coriander for the next season. Coriander mainly goes for domestic consumption and only around 5-6 percent of the production is usually exported.