Jeera hit all time high on export demand, diminishing stocks: Angel Commodities Broking

“Jeera futures hit all time high today on expectation improving export demand and diminishing stocks with the stockists and traders at the end of the season. The most active December delivery contract on National Commodities and derivative Exchange (NCDEX) touched Rs.20,400 per quintal. Jeera Dec futures increase by about 8.8% or Rs.1,645 a weeks’ time.

Cumin exports from the country have been little lower this year as compared to last year due to higher prices but the exports are expected to picking up during the last four months of current calendar year. As per the market sources, the prices in other jeera markets, Syria and Turkey is higher due to negligible stocks.

According to the Department of Commerce, Cumin seed exports during the first five months of 2017/18 pegged at 63,085 tonnes compared to 64,757 tonnes last year for the same period. However, cumin seed exports during the month of August 2017 surged about 46% to 13,879 tonne on year and expected to be higher in coming months as well due to strong demand from Vietnam and Bangladesh.

According to market sources, India's exports of Jeera are likely to have risen to 70,000 tonnes in April-September, 2% higher than the last year exports. The export volumes are consider to be very encouraging due to fact that the prices have been on higher side this year due to lower production and good quality.

Gujarat is the largest cumin sowing state in the country and planting started in the districts of Banaskantha, Patan, Ahmedabad and Surendranagar. As per latest report by Department of Agriculture Gujarat, cumin acreage in the state was about 60,000 hectares against 36,600 hectares sown during same period last year. However, cumin seed acreage may increasing by about 8-10 per cent in Gujarat and Rajasthan in 2017-18, as farmers have earned good profits last year.

Jeera prices have surged during the month of November due to improving physical demand against limited stocks with the physical traders. However, stocks in the NCDEX warehouse are highest during this time of the year at 6,172 tonnes compared to last three years. Moreover, Exchange has delivered about 7,776 tonnes in last three months, which is also highest in last three year for the same period.

As per NCDEX data, long position for the top 10 trading clients increased to 6,351 lots in a weeks’ time on 17th November from 5,853 lots while short positions for top ten clients down to 4,014 lots from 4,212 lots during the same period.

Jeera futures for December delivery may trade higher towards Rs. 21,000 from the current levels (CMP: Rs. 20,300) in the coming weeks on strong demand and limited stocks. However, the price may correct if export and domestic demand cools down because of higher prices while expectation of higher acreage may also pressurize prices as the season progresses.”

-Mr. Ritesh Kumar Sahu (Fundamental Analyst– Agri Commodities, Angel Commodities Broking)