Jeera update sep2016

Agri Update – Jeera (Cumin)

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www.angelcommodities.com

Thursday, September 08, 2016

Jeera prices may surge on dwindling supplies, good

export demand but sowing progress may weigh on

prices

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Prepared by Ritesh Kumar Sahu Analyst - Agri Commodities [email protected] (022) 2921 2000 Extn. 6165

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Price Performance

The jeera on the National Commodities and Derivative

Exchange (NCDEX) has been at higher levels this season

compared to last three years. In the current year (2016)

jeera price on NCDEX jumped by about 38 per cent from

its low levels in February. The prices have touched its

highest in July (₹19,810 per quintal) from its lower levels

of ₹13,145 in February. Currently, the prices are hovering

around ₹17,740 levels in September.

In 2016, jeera prices have been in uptrend until July in

spot and futures market due to good demand from the

stockists and improving exports. Traders and stockists

have received higher domestic demand for jeera due to

good quality production this year after two years of lower

production and quality issues on bad weather during

harvest months.

The exports of Jeera increased compared to last year

during peak arrivals seasons of March, April and May

support the prices at higher levels. Moreover, the stock

positions in the NCDEX warehouse were at lower levels

compare to last year. According to the stock data shown in

15000

16000

17000

18000

19000

20000

21000

2-M

ay-16

9-M

ay-16

16

-May-1

6

23

-May-1

6

30

-May-1

6

6-Ju

n-1

6

13

-Jun

-16

20

-Jun

-16

27

-Jun

-16

4-Ju

l-16

11

-Jul-1

6

18

-Jul-1

6

25

-Jul-1

6

1-A

ug-1

6

8-A

ug-1

6

15

-Au

g-16

22

-Au

g-16

29

-Au

g-16

5-Se

p-1

6

Source: Ncdex

Jeera Futures Price (Rs per Quintal)

9550

11550

13550

15550

17550

19550

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Monthly Avg. Price of jeera for last 3 years- NCDEX (Rs per Quintal)

Y 2014 Y 2015 Y 2016 Source- NCDEX

Exchange website, the stocks were about 70 per cent lower

than last year average stocks of 15,000 tonnes in NCDEX

warehouses in Unjha and Jodhpur.

However, jeera prices started to correct in the second half

of July mainly due to reports of slowdown in exports due to

higher domestic prices. There is good demand from

Vietnam and UAE, which supported the prices, but higher

prices have limited the demand from other countries. The

progress of monsoon rains in the country also weighs on

jeera prices on expectation of higher jeera sowing during

next Rabi season.

On NCDEX, Jeera prices have declined by about 10.1 per

cent from July high. In the below chart, we can see the

prices of jeera correcting after Jul 2016.

Declining Market Arrivals

The arrival of jeera in the physical market is declining during

the last three months – June, July and August as per the

seasonal trend (as shown on below chart). The harvesting

for 2015-16 season started in March and arrivals peak

during March, April and May.

As per the Agmarknet data, the quantity of jeera arrivals in

the country reported lower by 30 per cent in first five

13000

14000

15000

16000

17000

18000

19000

20000

Oct-1

5

No

v-15

Dec-1

5

Jan-1

6

Feb-1

6

Mar-1

6

Ap

r-16

May-1

6

Jun

-16

Jul-1

6

Au

g-16

Sep-1

6

Source: Reuters

Monthly Average Closing Price- Jeera (Rs/Quintal)-

6,000

16,000

26,000

36,000

46,000

56,000

66,000


Monthly arrivals (tonnes) Jeera - 3years Average

Source: Agmarknet


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month of new financial year (April-August) at 69,675

tonnes compared to more than 1,00,000 tonnes same

period last year. The production in 2015-16 in Gujarat

forecasted at 2.38 lakh tonnes (lt), up by about 21 per cent

compared to previous year 2014-15.

The arrivals in the physical markets in the country are not

reflecting in the production estimates. That means, the

market participants are speculating that commodity

aggregators and stockists are still holding jeera in

anticipating higher prices during the winter months.

Lower Stocks in NCDEX

In 2016, the stock position in the NCDEX warehouse lower

compared to deposits done during last year. The average

stock positions at NCDEX warehouse during last year

(2015) during April to August months was around 15, 000

tonnes while in 2016 the average stock held is only 4,300

tonnes. The lower deposits in Exchange reflecting good

physical demand coupled with higher exports for jeera in

the current marketing year compared to last year.

The spot price of Jeera during the month of June and July

in Unjha market was higher by more than 14 per cent

compare to last year prices.

0

20000

40000

60000

80000

100000

Apr May Jun Jul Aug Total

Comparision of arrivals of Jeera in 2016-17 and 2015-16

FY16-17 FY15-16 Source: Agmarknet

0

5000

10000

15000

20000

25000


Stock position in NCDEX- 2015 Vs 2016 (Tonnes)

Y2015 Y2016 Source: NCDEX

Exports

India exported jeera worth ₹68,891 lakh with total

quantity of 44,023 tonnes in the first three months (Apr-

Jun) of 2016-17. The export volume is higher by 71.7 per

cent compared to last year data for the same period.

Vietnam is the largest buyer of jeera accounting for

exports worth ₹29,727 lakh followed by United Arab

Emirates (UAE) and USA, which imported jeera worth

₹4,967 lakh and ₹4,637 lakh respectively.

According Department of commerce data, in June,

country exports about 9,859 tonnes of jeera, down by 52

per cent, compared to May (20,383 tonnes) but 39 per

cent higher year on year (7,064 tonnes).

In the first three months of new financial year, jeera

exports has achieved about 46% of last year’s export

volume due to good demand from Vietnam, UAE and USA.

Vietnam is the largest importer of Jeera, which imports

more than 41 per cent of total jeera exported by the

country. Vietnam is aggressively importing jeera this year

despite the higher prices. It has imported about 74.6 per

cent of total imports in three months compared to last

year’s import volume.

The export demand from UAE, USA, Bangladesh and Brazil

is steady in the current financial year as they also

imported 22.4 per cent of jeera by volume in April- June

2016.

In 2015-16, India exports about 94,352 tonnes of Jeera,

which is lower by 40 per cent lower compared to previous

year’s exports of 1.56 lakh tonnes. The top five-export

destination during last financial year was the Vietnam,

USA, UAE, Brazil and Egypt.

4,000

9,000

14,000

19,000

24,000

Jan Feb Mar Apr May Jun

Export comparision (tonnes ) - 2015 & 2016 -Jeera

Y2015 Y2016 Source: Dept of Commerce


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Technical Levels

Commodity S2 S 1 CMP R 1 R2

Jeera Oct’16 16200 17000 17730 18100 18900

According to below chat, jeera exports will be steady in

coming months. Jeera exports during March to June

remains higher due to peak arrivals and lower prices in the

country.

Price Outlook

Since August, Jeera prices is correcting lower as physical

demand in domestic market is not picking up due to lower

than expected export orders. The jeera price has

improved occasionally on export enquiries but was

weighing down due to lack of trade confirmation. As per

the trade sources, the exports during July and August fell

by almost 50 per cent compared to last year exports

during the same period.

Jeera prices in the current financial year are at higher level

due to good domestic demand as production during last

two years was lower than the average production of the

country. Consequently, the stock levels in the country

were at lower levels when the arrivals start in March. As a

6,000

8,000

10,000

12,000

14,000

16,000

18,000


Monthly Jeera Exports (tonnes) - 3 years Average

Source: Dept of Commerce, GOI

result, spot prices of jeera in domestic market are at

higher levels compared to 5 years of average prices as

shown in below chart.

Currently major part of jeera stocks are with the local

aggregators and stockists who are expecting further surge

in prices after the jeera crop from Turkey and Syria is used

up by the end of October. Until that time, the domestic

stocks will be diminishing and new season crop sowing

will commence.

During the next 3 months, the movement of prices will

depend solely on export and domestic demand. The fresh

crop will start arriving in the market only after March.

We expect, Jeera NCDEX for Oct’16 to touch ₹ 18,900 per

quintal as the traders and stockists try to hold on the

stocks on expectation of good export and domestic

demand during the lean season.

13000

14000

15000

16000

17000

18000

19000

20000


Jeera Spot Price - 2016 Vs 5 years Avg Price (Rs/Qtl)

Y 2015 Y 2016 Source- NCDEX

Data & Analytics

Jeera update sep2016