jeera up dates

Jeera kept hitting Upper Circuit levels as export demand increased in the mandis amidst falling arrivals of the new crop. A firm Dollar vs Re kept uptrend intact. 25-30% fall in sowing area too contributed to the upside movement as traders anticipate medium to long term Bullish trend to continue.

 The rains in growing states of Gujarat and Rajasthan last month is expected to improve the crop productivity to some extent. But overall lower sowing area and expected fall in production would however keep long term Bullish sentiments intact as exports rise in mandis. 

As per latest Govt reports, in Gujarat, normal area is approximately 388,000 ha. Till 5.1.2015, only 2.64 lakh ha have sown as compared to 4.54 lakh ha last year. Sowing area during current year likely to go down in Gujarat and Rajasthan due to lower price as compared to Coriander. Area may shift to Coriander and Fenugreek seed. Cumin output is expected to fall steeply in Gujarat this year. Output was 3.46 lakh tons in the state last year but may fall this year as acreage is slashed by 42%. However, yield is expected to improve after the rainfall that the state received recently. Still, there is less probability of the output to cross 2 lakh tons. 

 Latest report from Spice Board of India indicates pickup in exports during April-Sept 2014 period at 87500 tonnes (up from 70243 in April-Sept 2013) – a rise of 25% in Quantity and 2% in value. Targeted Export for 2014-15 period is 1,00,000 tonnes. With Indian produce being of superior quality, they fetch a premium w.r.t. International market. Adverse reports from International producers would be beneficial for the Indian markets in the long term.

 The exports have already shot up 40% during the 1st half of the quarter. It is expected to remain high in coming months too – which could create a Bullish sentiment in the long term for the commodity. Finally a fall in area as reported amidst adverse weather conditions in growing areas could help keep market sentiments firm in the medium term.