Heavy arrivals and weak demand have brought down cumin seed prices by 20 per cent since December. In the spot market in Unjha, prices reached Rs 11,500 ($224.16, €170.49, ￡140.62) a quintal (100 Kg) on Monday, with arrivals touching 50,000 bags (55 kg each).
According to traders, cumin seed acreage had almost doubled during 2011, which resulted in a bumper crop.
“In Gujarat, cumin seed was sown on 265,000 hectares of land, compared to 130,000 hectares in the previous year. However, there were some climatic fluctuations after Diwali, which were feared to hamper the crop. But the situation has changed and markets are flush with cumin seed and prices are declining constantly,” said a trader and exporter from Unjha.
In December, cumin was quoted at Rs 14,000 ($272.89, €207.51, ￡171.19) a quintal (100 Kg) in Unjha. Prices have fallen 20 per cent in the past three months to trade at Rs 11,500 ($224.16, €170.49, ￡140.62) a quintal (100 Kg). In the international market, prices remained firm at Rs 128,257 ($2,500, €1,901, ￡1,568) a tonne, while that of Syria’s were higher at Rs 169,299 ($3,300, €2,500, ￡2,070) a tonne.
“We are expecting production to be 3.2-3.3 million bags, against 2.8 million bags reported last year. Domestic demand is weak and arrivals have started mounting from a usual 30,000 bags to about 40,000 bags daily. Prices have come under pressure due to this and may slide below Rs 110 a kg in the spot market amid weak domestic offtake,” said Arvind Patel, an industry analyst and former president of Unjha Vepari Mahamandal, a local merchants association. Gujarat’s cumin seed production is likely to be 1.2-1.3 million bags, while may contribute about 1 million bags.
On the National Commodity and Derivatives Exchange, the April contract of cumin seed futures fell by Rs 350 ($6.82, €5.19, ￡4.28) a quintal and traded at Rs 11,750 ($229.03, €174.20, ￡143.68) a quintal (100 Kg). The contract ends on April 20.
“Domestic buyers are not making fresh purchases, mainly due to sliding prices. The sentiment is dull and arrivals continue to hit markets. However, we expect exports to do well, as Syria and Turkey are not being able to meet international demand,” said a cumin seed exporter and trader from Palanpur.
Despite domestic buyers staying away from fresh purchases, market insiders maintained exports would rise sharply, as two leading producers, Syria and Turkey, would not be able to meet the international demand due to lower crop.
“Cumin seed exports may touch 1.2 million bags this year, up from about 500,000 to 700,000 bags reported last year. This may partly support prices. But, looking at the quantum of arrivals hitting the markets, prices may continue to slide till at least the end of this month,” added Patel.