International Spice Commodities Update – Cumin

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.

www.keresspices.com

International Spice Commodities Update – Cumin

Cumin prices ended down due to arrival pressures in spot markets and expectation of higher output in the current season. Cumin arrivals in Unjha were around 14000 bags. Of the total arrivals, 1000 bags were from the old crop, and the remainder from the new crop.

Prices of the new and old crop remained steady at Rs.14000 ($283.06, €214.16, £178.33) per 100 kg, and Rs.14200 ($287.10, €217.22, £180.88), respectively. Currently, the demand from domestic buyers were reported weak, whereas expected rise in demand from the domestic and overseas market for new crop may limit sharp fall in prices. Political unrest in Syria; a major Cumin producing countries may also increase the export demand for Indian variety.

The outlook for the day is negative. NCDEX March contract can test support of Rs.13700 ($276.99, €209.57, £174.51) with resistance being Rs.14350 ($290.13, €219.52, £182.79).

www.keresspices.com

International Spices Commodities Update – Cumin

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

www.keresspices.com

International Spice Commodities Update – Cumin

SPECIAL REPORT

Syrian Unrest May Lift Export Demand for Cumin

Buying at lower prices and lower arrivals buoyed Cumin in spot and futures markets on Thursday.  The demand for Indian Cumin in the export market is expected to rise because of political unrest in Syria.

The December contracts increased by Rs 190 ($3.65, €2.73, £2.33) to Rs 13,618 ($261.51, €193.39 , £166.70), a quintal with an open interest of 8,025 lots on the National Commodity and Derivatives Exchange (NCDEX) while January was up by Rs 177 ($3.40, €2.54, £2.17)  to Rs 13,910 ($267.12, €199.58, £170.27) a quintal with an open interest of 17,085 lots.

Spot Cumin traded at Rs 3,010 ($57.80, €43.19, £36.84) for 20 kg in Unjha mandi while in Banglore it fetched Rs 2,550 ($48.97, €36.59, £31.21) for 20 kg, up Rs 35 ($0.67, €0.50, £0.43).  While 300-400 bags arrived in Banglore, 4,000 bags arrived in the Unjha agricultural produce marketing committee.  Stocks in NCDEX-accredited warehouses were up 157 tonnes to 9,566 tonnes.  Common and best-quality Cumin rose by Rs 100 ($1.92, €1.43, £1.22) a quintal each at Rs 14,100 ($270.76, €202.30, £172.60) and Rs 17,200 ($330.29, €246.78, £210.54) in Delhi.

New export demand supported the rise in prices. According to market sources, Indian Cumin quoted at about $2,900 (€2167, £1849) a tonne in the international markets, while Syrian and Turkish were offered at around $3,300 (€2466, £2104).

However, good sowing reports and higher stocks are likely to put pressure.  Reports of warm weather in major growing regions are also likely to weigh on the price trend. According to reports from the India Meteorological Department, mainly dry weather would prevail over Gujarat and in other growing areas.

www.keresspices.com

Twitter: KeresSpices