Monthly Prices Movement

  • Spices complex witnessed a mixed trend throughout the month at the various Indian markets where Jeera prices traded mixed on expectation of better export prospects and better sowing this season due to higher prices. Turmeric and Red Chilli prices, on the other hand, declined at the major markets amid better sowing data.

  • Black Pepper prices witnessed a steady trend throughout the month in the absence of any strong demand while Cardamom prices remained firm on expectation of lower production.

Ground Report

  • India Cumin Seed (Jeera) exports as on August of the current financial year (2016-17) begins from April surged 63.41 percent at 61,374.80 metric tonnes, according to latest data released by commerce ministry. The country has shipped around 37,558.11 per metric same period a year ago.

  • India Jeera exports surged this season due to empty pipeline in overseas market due to poor imports in FY 2015-16. The country's Cumin Seed export during 2015-16 was 94,352.47 metric tonnes, down from 156,555.99 metric tonnes in 2014-15.

  • According to trade sources, India could export around 1 lakh tonne Cumin Seed season 2016-17 as Geo-political tension in Turkey and Syria may restrict supply, thereby making India the single most preferred source of cumin seed supply in the world market.

  • India has been outpaced by Russia as the largest exporter of Coriander in the international market. Nearly 45,000 tons of Coriander has been shipped by Russia during Jan-Aug 2016, and is well set to capture a third of the global market.

  • Turmeric production in Telangana is seen at 210,000 tonnes in 2016-17 (Jul-Jun), compared with 186,000 tonnes in the previous year, according to the first advance estimate by state agriculture department.

  • Sowing of Turmeric stood at 17,000 hectare until now in Andhra Pradesh, up from 15,000 hectare a year ago. Apart from higher acreage, favorable weather will also boost the output and India may produce 9 million bags of Turmeric this year.

  • Red Chilli sowing so far in Indian state of Andhra Pradesh has been reported in 154,000 hectares against 107,000 hectares last year, higher by 43%.

  • Pepper production in India for 2016-17 is projected lower due to the erratic weather condition. A substantial increase in the next crop was anticipated earlier following the summer showers this year in some of the growing regions.

  • The production for 2017 is estimated at 55500 tons against 48500 tons in 2016. Domestic Pepper consumption in India has increased to 51500 tons against 50000 tons in 2016. The International Pepper Community (IPC) projection for 2017 has put the world output at 4,18,604 tonnes against 3,97,153 tonnes in 2016.

  • Black Pepper exports from India sharply declined by 46.61% during January-August 2016 while imports have increased during this period. Sharp fall in Pepper production in 2015-16 at 48,500 tonnes against the domestic demand of 50,000 tonnes and a consequent rise in prices could be attributed to the drop in the exports.Black Pepper imports have showed an increase of around 16% and stood at 12,081 tonnes against 10,418 tonnes during January-August 2015.

Global

  • Black Pepper production in Vietnam for 2016 is estimated at 150,000–160,000 tonnes, up about 18% y-o-y. The rise in production is mainly attributed to an increase in the areas planted, with expansions in Vietnam, Indonesia, Brazil and Cambodia.

  • In Vietnam, the production area for Pepper last year was estimated at 85,000 hectares. This year, the forecast is up 18% y-o-y at 100,000 hectares.

Outlook

  • Red Chilli prices declined drastically in the last 2-3 days as new crop supply has started coming to the market. New Red Chilli crop supply is expected to gather the momentum from next week when participants are expected to return to the market after Diwali holidays which is likely to pressurize prices.

  • Buyers are in wait and watch mood to enter into a new deal as it is expected that Red Chilli output is going to be higher this year by 20-25% amid increased acreage and supportive weather.

  • Demand in Jeera is said to be slow from domestic and overseas buyers at present. However, trade sources expect demand to improve from overseas in the coming days. Falling stocks in domestic and low stocks in International markets could support Jeera prices in long term even as weather affects short term trend to some extent.

  • As per market source, acreage under Jeera is expected to increase 10-15% in Gujarat and Rajasthan due to better realization compared to other crops. Jeera is sown in October and November and harvested from March. Still, prospects of rise in demand from domestic and overseas markets may limit sharp fall in prices.

  • Cardamom prices have been trading firm since last 4-5 days at the auctions held in Tamil Nadu and Kerala amid decreased arrivals. This phenomenon has been attributed to strong demand from upcountry markets following fear of sharp fall in current crop output due erratic monsoon rains.

  • The second round of picking is going on now and it is expected to come to a close by mid November. Third round will begin from December first week and may last till end of the month and with this much of the Cardamom crop would have been picked leaving very little to be harvested.

  • There are fears of a fall of 30-40% in Cardamom output during 2016-17 on year. Present dry weather in the main producing centers may limit the number of picking impacting the output. Lower production estimation likely to keep Cardamom prices in the days to come.

  • Turmeric prices have fallen a lot and these low levels are not sustainable. Expectations of higher production in the coming year due to strong sowing of Turmeric in the producing belts of Karnataka and Telangana may pressurize prices in the days to come.

  • The signs of early withdrawal of Monsoon rains from parts of Southern India have raised concerns that Black Pepper output may fall short of forecast. Prices are likely to move higher considering the overall production and market information at the prevailing demand supply situation.

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