Monthly Prices Movement

  • Spices complex showed a mixed trend throughout the July at the various markets of India. Jeera prices remained firm so far in this month amid tight demand-supply position. Jeera price during March 2016 was hovering in the range of Rs.12275-13775/quintal and currently it is trading in the range of Rs.16500-17000/quintal. Jeera prices rose more than 50% so far this year.

  • Turmeric and Black Pepper prices traded mixed while Red Chilli and Cardamom prices witnessed a positive trend so far amid expectation of better returns due to high prices.

Ground Report

  • With the long dry spell in Cardamom growing areas of South India, Spices Board had constituted a team to assess its impact on the Cardamom production. The crop fall is expected to be up to 20-25% and plant loss about 5-10% in Idukki district of Kerala, the main Cardamom growing region.

  • Cardamom output is pegged at about 17,000-18,000 tonnes next year compared to 25,000 tonnes last year.

  • The Cardamom market is currently running on carryover stock from the previous year. Currently, Cardamom arrivals have been slowing down because of non-availability of good quality grade capsules. The arrivals during the first three weeks of July decreased by 42% to 888 tonnes compared to 1,586 tonnes in June.

  • India's total small Cardamom exports in 2015-16 (Apr-Mar) increased sharply by 45% to 5,500 tonnes, against 3,795 tonnes a year ago whereas Large Cardamom exports declined by 10% to 600 tonnes.

  • Turmeric sowing has been started in almost all growing regions and expected to increase by 25% in Duggirala mandi of Guntur district if rainfall will be sufficient. Turmeric carry forward stocks which are up to 3 years old are in the range of 4-5 lakh bags. 40% of it has been sold and 60% remains in the cold storage of the total production of 2016.

  • Turmeric stocks in the country are balanced at present, but may contract going forward. Overall acreage under Turmeric is expected higher this season, but the progress so far is mixed to steady across different growing belts. Turmeric sowing in Telangana as on July 27 stood at 41,000 hectares from 36,000 hectares’ same period a year ago, while sowing in Andhra Pradesh reached at 8,000 hectares as against 6,000 hectares.

  • India's total Turmeric exports in 2015-16 (Apr-Mar) up 3% to 88,500 tonnes, against 86,000 tonnes a year ago. However, exports are higher than the board's target of 80,000 tonnes.

  • Good demand from China coupled with availability of quality produce has pushed Jeera exports by almost 181% during the first quarter of this fiscal. Geo-political tension restricted Jeera supply from Turkey and Syria, thereby making India the single most preferred source of Jeera supply in the world market.

  • India has already shipped more than 50,000 tonnes of Cumin Seed so far and similar quantity likely to be exported in remaining season. China likely to have procured around 20,000 tonnes and more 10,000 tonnes likely to source by them in the coming months as crop in China is lower, which consumption has increased. Jeera exports will continue for the next couple of months. Total exports will cross 100,000 tonnes this year on continued Chinese demand.

  • Besides India, Jeera is cultivated in Iran, Turkey and in Syria mainly for exports. The new crop in Syria and Turkey is harvested in August-September, so until then, Indian Jeera will find a good market overseas. The harvest period in India for Jeera starts around February-March.

  • Pepper imports could go up further this year as tentative reports indicate a 25% decline in domestic production. Black Pepper output expected to decline to about 50000 tonnes due to erratic weather conditions in Kerala and Karnataka.

  • Red Chilli sowing in Andhra Pradesh as on July 27, reached at 20,000 hectares, up from 8,000 hectares sown same period a year ago. Chilli acreage in Telangana stood at 2,000 hectares versus 1,000 hectares last year. Chilli acreage this year likely to rise as better prices encourage farmers to cultivate more red spice.

  • Sowing of Chilli to increase by 150% this year in the month of August in comparison to 2015 due to high prices and predictions of good monsoon in Guntur. Around 15% of the Indian farmers would switch over to Chilli from Cotton and Turmeric due to the steady to high prices.

  • India Chilli exports have remained flat at 347,500 tons in FY 16 against 347,000 tons in the previous year. The value of Chilli exports has increased 12% to Rs 3,931.7 crore from Rs 3,517.1 crore.

  • Around 100000-200000 bags Red Chilli of this season are still to arrive in the market and carry forward stock of past years and this year put together can be estimated to be around half a million bags.

  • Over the last two months, a fall in supply of Chilli peppers has led to an increase in prices and farmers of Tamil Nadu are not happy with that. Farmers are of the opinion that if Red Chilli exports pick up, the shortfall will only increase and the next Chilli crop will be available only in January.

  • Chilli crops have failed for the past four years in Madhya Pradesh leading to a shortfall in supply. Farmers have also charged more this year since they had to pay for water. Red Chilli consumers need not worry as there have been record high arrivals from Karnataka.

Policies

  • Indian Spices gained in overseas market as export of Spices increased nearly 16.79 percent in value terms during May 2016 as compared to corresponding month last year.

  • As per the recent report from Spices Board of India, India’s total exports of Jeera fell the most, declining 37% on year to 98,700 tonnes, and also lower than the board's target of 100,000 tonnes.

  • Gujarat government released fourth advance estimate for 2015-16 crop, which showed that Cumin Seed output in the state stood at 0.24 million tonnes in area of 0.29 million hectares.

  • Spices board recently apprehended a fall 25-30 in Cardamom output during 2016-17 season beginning August due to long dry spell between Dec 2015 and May 2016.

  • According to the Fourth advanced estimate for 2015-16 of Gujarat, sowing area of Chilli remained same at 9000 hectares as compared to third advanced estimate, production also remained same as 6000 tons.

Global

  • Pepper shipments from Vietnam, the world's biggest producer, rose by 22.6% from a year earlier to 106,829 tonnes during the first six months of 2016, according to latest data from Vietnam Customs.

  • Vietnam has shipped around 75% of its 0.15 million tonnes output. Of the remaining lot, it may set aside at least 10% for the carry over stock.

  • Indonesian Pepper output expected to be around 50,000 tonne, which could put pressure on the global supply situation, especially as the largest producer Vietnam has already sold most of its stock.

Outlook

  • Jeera prices have reached a historic high of Rs 3,800 per 20 kg at the Unjha mandi (wholesale market) in Indian state of Gujarat. In two months, the price has gone up by Rs 400-500 per 20-kg bag.

  • China and Bangladesh have bought Jeera heavily so far and export demand is likely to continue to witness an upside, as other producing countries are not well placed for supplies. Looking at the current scenario of supply and stocks, if demand continues in August, Jeera price might touch Rs 4,000 per 20-kg.

  • Because of good prices in the past three months, almost 80% of the total Jeera production has already arrived in the market. Jeera prices expected to trade higher due to limited availability of the spice and expectations of strong overseas demand.

  • Only needy buyers are active in the spot Red Chilli market right now as major buyers had already sourced Red Chilli earlier for their long term requirements.

  • Demand in Red Chilli usually declines in Monsoon as rainfall increases moisture content and lead to losses to Red Chilli and quality as well. Red Chilli prices of Fatki 334 is 67-75/kg whereas price for Teja variety is Rs.128/kg and both these varieties are sought after for exports due to its high spicy content and sent mainly to China.

  • Sowing in the Guntur district will begin only in the month of August and sowing is expected to double this season due to good prices. Current Red Chilli prices are good and expected to pickup from August when exports and domestic markets will see more demand.

  • It was expected this time too – as in the past three years – that farmers will go for Turmeric Vs Maize cultivation in the proportion of 80:20. But since the prices of Maize shot up by Rs. 500/Qntl, ratio of cultivation may change to 60:40. Turmeric traders expect at least 25% increase in production compared to last few seasons.

  • Turmeric prices are expected to rise during September-November on account of festive season demand and export demand which picks up in November-December. Mills run their operation from August to May.

  • We may witness higher Turmeric production in 2016-17 but any sharp fall in prices is unlikely as new crops will be available only from February onwards. Till then, the supply shortage is likely to happen in case of demand pick-up from festive season, and export, and thus provide a boost to Turmeric prices.

  • Around 5-10 percent rise could be seen in Turmeric in the coming months, while beyond that rise is unlikely as sowing is likely to be good after better rainfall in major growing areas of Telangana, Maharashtra, Andhra Pradesh, Tamil Nadu.

  • Fear of a likely scarcity of Small Cardamom in the coming days due to delay in harvesting has pushed up its prices last week. During a season, usually, six-round of picking takes place starting from July. But, this season it is going to be four rounds and, consequently, the total Cardamom production in 2016-17 season is estimated to be down by 40-45%.

  • Scarcity of the material during the gap between the harvesting might push up the Cardamom prices further.

  • Black Pepper may turn costlier in India as Indonesia, the world's second largest producer of the spice, indicate a fall in production. Indian Pepper prices are hovering around Rs 726 per kg, may hit the Rs 800-mark as the country is now dependent on Vietnam and Indonesia for supply of the spice with domestic production turning out to be much less than the projected 53,000 tonne.

  • Growers are holding back available Black Pepper stock in anticipation of higher prices. Black Pepper prices likely to touch an all-time high by the end of October this year due to lower production estimation.

image