Cumin Weekly Review: Price Movements, Export Surge, and Sowing Delays
09-Nov-2024 06:03 PM
Cumin Weekly Review: Price Movements, Export Surge, and Sowing Delays
New Delhi — The cumin market is currently experiencing a bullish trend, with prices rising due to delays in sowing and strong export demand. However, sources indicate that further bullish movement might be limited, as farmers still hold significant stock, with about 30–35% of the crop remaining in production centers. These stocks are expected to be released once prices rise further. Despite this, the current month's price strength is likely to persist due to delayed sowing, while prices may stabilize in December.
Price Movements:
This week, cumin prices rose in both the futures and spot markets. In the futures market:
- November contracts opened at ₹23,100 and closed at ₹25,490.
- December contracts opened at ₹22,970 and closed at ₹25,370.
Spot prices also saw an increase of ₹500–800 per quintal, reflecting a surge in export demand and limited arrivals in domestic markets. The rise is attributed to both strong futures performance and increased global demand.
Delayed Sowing:
The major producing state of Gujarat, which typically begins sowing cumin at the end of October, has seen a delay in planting due to unusually high temperatures. This delay is expected to push the arrival of the new crop by roughly a month. Additionally, sowing area this year is reported to be significantly smaller than last year. In 2022, cumin was sown across 12.64 lakh hectares, while the current year's sowing has dropped to 7.73 lakh hectares.
Market Dynamics:
- Low Arrival: The cumin arrival at producing centers remains subdued. At Unjha Mandi, daily arrivals are limited to around 10,000–11,000 bags, significantly lower than the usual 17,000–18,000 bags due to the festive season and low crop yield. Other mandis, such as those in Rajasthan (Merta, Nagaur, Nokha), are experiencing similarly low arrivals, with figures hovering around 800–1,000 bags.
- Export Demand: A key factor supporting the bullish sentiment is the rising export demand, driven partly by the political instability in countries like Turkey and Syria. Indian cumin exports have surged as a result, with the Spices Board reporting a sharp increase in cumin exports during the current financial year. From April to August 2024, 70,000 tonnes were exported, and September exports alone reached 17,433 tonnes, a significant jump from the 7,196 tonnes exported in September 2023.
Export Trends:
After several years of declining exports, the current fiscal year shows promising growth for cumin exports:
- 2020-21: 2,98,432 tonnes
- 2021-22: 2,16,971 tonnes
- 2022-23: 1,86,509 tonnes
- 2023-24: 1,65,269 tonnes
This reversal in export trends is a sign that the ongoing price corrections could stimulate further international demand, especially in markets affected by supply disruptions elsewhere.
Outlook:
Traders believe that there will not be a significant price slowdown in the immediate term, as both domestic demand and export opportunities remain strong. The expected delay in crop arrivals, combined with a reduction in sowing area, suggests that prices will maintain their upward trajectory through the end of November, with a more stable market anticipated by December.
In conclusion, cumin prices are likely to remain buoyed through the rest of 2024, driven by delayed sowing, lower crop area, and growing export demand. However, once the sowing report is released, more clarity on future price movements can be expected.