Such is the negative sentiment in trader circles that prices of the commodity have already been jacked up in the spot and futures market.
The government says cumin sowing as of December 19 was reported at 264,000 hectares. “This is higher from 125,000 hectares reported during the same period last year,” notes a senior official of the state agriculture department. But, cumin is a winter crop and the weather remained largely warm till recently.
Cumin futures on the NCDEX rose in the spot markets on Monday due to short supply. The January contract traded at Rs 16,580 ($313.20, €239.65, ₤199.75) per quintal — up four per cent against the previous close.
Arrivals remained thin in the spot market, with prices in the range of Rs 13,500 ($255.02, €195.13, ₤162.64) to Rs 14,000 ($264.46, €202.36, ₤168.67) per quintal at the Unjha market.
“We see a breakout in the technical chart of cumin at this level,” says Jagdeep Garewal, Kunverji Commodities here. “We don’t notice a substantial resistance till Rs 17,000 ($321.13, €245.72, ₤204.81) per quintal, with a stop-loss level at Rs 15,700 ($296.58, €226.93, ₤189.15). Temperature fluctuations are likely to cause a drop in quality and yield.”
Also, there is no fresh stockist selling at current price levels. “So,” Garewal adds, “we see strong reasons for prices to rise further over the next 15-20 days.”
According to trader sources in Palanpur, prices may rise further, as production may not rise at par with the rise in the acreage of cumin.
Insiders, though, claim the carryover stock has been high at around one million bags (a bag is 55 kg) against 400,000 bags last year. The production was 2.9 million bags in 2010-11, estimated to swell to four million bags this year, considering sharp increases in the acreage.
“Export inquiry is less in recent days, mainly due to Christmas holidays,” said an exporter from Unjha (India’s largest cumin market). But we’ll see demand rise significantly over the next week, as production in Syria and Turkey will fall short of overseas demand.” According to him, export so far in the current financial year has remained higher at around 20,500 tonnes, as against 19,800 tonnes in the year-ago period.
For more information, please contact Keres Consulting