Jeera prices to stay firm on lower output
Sowing area has shrunk 25 per cent due to less rainfall

Cumin seed (jeera) is caught in a piquant situation. While depreciating rupee and crop damages in key jeera producing countries, like Turkey and Syria, have thrown up huge opportunities for Indian farmers to make it big in the export market, rain deficit have created uncertainties whether jeera farmers would be able to benefit from the situation.

According to estimates, India has already exported 125,000 tonnes of the commodity, so far, and shipments will touch 175,000 tonnes by the end of this financial year. Thus, it may reset the export volume record of 155,000 tonnes achieved in 2014, provided water woes in key jeera producing areas are resolved.

The largest jeera growing regions of Saurashtra and Kutch (both in Gujarat) are facing rainfall deficit in the range of 28-75 per cent. In western and southern Rajas-t­han, another jeer producing region, rainfall deficit stands at 23 per cent. According to the Indian met department (IMD), the Kutch district has a rainfall deficit of 74 per cent and Saurashtra 28 per cent. The shortage could be met through canals from the Sardar Sarovar Dam on Nar­m­a­da river, but the dam’s sto­rage level is low due to lower rainfall in the river catchment areas in Madhya Pradesh.

A section of the analysts feel deficient rainfall may support the jeera market in the long run. Also, higher oil prices and dollar strength, which has battered the currencies of several big crude importers, could eventually hit demand growth next year.

India is the world’s largest producer and consumer of jeera. While it consumes 75-80 per cent of production, the other major jeera producing countries export most of their output. In India, Gujarat is the largest jeera producer followed by Rajasthan. Jeera is also cultivated in Iran, Turkey and Syria.

According to a recent Angel Commodities report, jeera arrivals during the last quarter (July-September) were 84 per cent higher year-on-year. The high arrivals can be attributed to higher prices this season compared with last season, coupled with higher production during last year.

According to the 4th advance estimate for Gujarat, production is estimated at 288,000 tonnes, up 45.5 per cent from the last year’s 198,000 tonnes, primarily due to higher acreage.

But Angel Commodities report indicates that shipment is likely to drop after higher exports during April-July and prices may remain relatively on the higher side.  On the impact of water shortage, analysts say jeera sowing has already fallen by 25 per cent from last year’s 780,000 hectares (advance estimates). Of this, 500,000 hectares were in Rajasthan and 278,000 hectares in Gujarat. If there is an equal shrinkage in crop size, then production next year will be lower at 5.5 million bags.

ritwikmukherjee@mydigitalfc.com

Columnist: 
Ritwik Mukherjee