Jeera Futures after trading bearish in the last few days bounced back from lows owing to short coverings by the market participants and settled 2.54% higher on Wednesday.
Spot prices traced the Futures and settled 0.50% higher yesterday. Expectation of better output on account of favourable weather conditions prevailing in Gujarat and Rajasthan kept prices undertone.
Demand from the overseas and domestic buyers also continues to remain dull.
According to Gujarat farm ministry, area sown under jeera till January, 18th 2012 stood at 3.682 lakh hectares (lh) up 50% as compared to last year while area covered in Rajasthan till date is expected to be 3.03 lakh hectares as compared to 3.30 lakh hectares in the same period last year.
Carryover stocks of jeera is expected to be around 9-10 lakh bags as compared to 4-5 lakh bags in the last year.
Prices in the global markets of Indian origin are quoting around $2,800-2,950/tn while Syrian origin is quoting at $3,100-$3,150/tn.
Production, Arrivals and Exports
Unjha markets witnessed arrivals of 5,500 bags while offtakes stood at 5,000 bags on Wednesday.
Production of jeera in 2011-12 is expected to be around 35 lakh bags as compared to 29 lakh bags in 2010-11. (Each bag weighs 55 kgs). (Source: spot market traders).
According to Spices Board of India, exports of Jeera during April 2011-November 2011 stood at 26,500 tonnes as compared to 20,750 tonnes in 2010-11, an increase of 27.7%.
Outlook
Jeera prices in the intraday are expected to witness selling pressure due to dull demand from the overseas and domestic buyers. Also, favourable weather conditions and thereby better crop expectation may support bears in the market.
In the long term (March to April 2012) prices are likely to take cues from the crop growth status and weather in the growing regions. According to earlier crop estimates output is expected to increase by 20%. This might pressurize jeera prices in the above mentioned period.
Courtesy: Angel Commodities
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