Jeera prices traded very volatile with down side biasness during the week ended on Feb. 04th.
Futures started the week on negative note extending previous week’s losses. Reports of arrival of fresh crop in small pockets of Gujarat weighed on sentiments.
Subdued export demand with sudden rise in arrivals across the spot markets further added to the down side. However, prices took smart recovery on short covering on huge losses later on but failed to sustain the gains.
Reports of fresh crop arrival in small pockets of Gujarat also weighed on sentiments and futures prices ended the week on negative note.
Outlook
Jeera prices are projected to trade lower on poor export activity initially in coming week.
According to trade sources, fresh arrivals are expected to gain pace in coming week which might weigh on prices. Domestic demand is also remaining subdued weighing on market sentiments.
However, trades are expecting by this week actual production estimates will be known. Production in Rajasthan is expected to be lower due to crop damage.
Therefore, if production numbers come lower from last year, than it might push the prices on higher side.
Factors to watch out
Spot market of Unjha arrivals were in the range of 3000-5000 bags (1 bag= 60 Kg.)
Sowing Data In Gujarat cumin seed sowing reported around 2.82 lakh hectares till 27th December as compared to the 2.38 lakh hectares in the last year
NCDEX accredited warehouse stocks were at 7236 tonnes as on February 02, 2011
As per Spices Board data, international price of jeera in New York market declined marginally to $3.86 per kg during the week ended January 27th 2011 however, remained higher against $3.64 per kg in the same period last year
Derivative Analysis
The NCDEX jeera February contract prices and open interest have declined while volumes have increased. It indicates that the price decline is being caused by liquidations of positions.
Due to prevailing volatility small traders are exiting their positions.
Courtesy: Karvy Commtrade Ltd.
