jeera—special report - religare online producing countries india is the major producer of jeera...

CROP

Jeera or cumin seed is the dried fruit of a small herbaceous plant and is used mainly in cooking in India. It is grown in countries like India, Turkey

and Syria and is used as food item and in medicines and has been a symbol for culture in Asian and African countries. Jeera accounts for 20-30%

of total Indian spices exports.

Jeera can be produced on almost all soil types but the soil, which suits the best to this crop, is a well-drained, fertile sandy soil type. It needs a

minimum of 3 to 4 months of duration period after which it is harvested. A dry climate is required for proper cultivation and rains can be harmful

especially during flowering period as fungal disease can set in. The sowing is done in October-November. Harvesting starts from February-March.

As jeera is a weather-sensitive crop, the quality is adversely affected if rains occur during harvesting time. Again a cool climate during the sowing

season is beneficial for the crop during growth stage. February-March is the peak arrival season.

Sowing and harvesting period

Cropping season

JEERA—Special report

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

Sowing

Harvesting

Region Cultivation period Harvesting period

Saurashtra mid Oct–mid Nov mid Jan-mid Feb

North Gujarat Nov Feb to mid-March

Rajasthan mid Nov-mid Dec March

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MAIN PRODUCING COUNTRIES

India is the major producer of jeera followed by Turkey, Syria and Iran. It is also produced in very small quantities in countries like Pakistan,

Egypt, Afghanistan and Chile. There has been a general increase in Indian production over the last few years. India contributes ~70% of total

World Production. It is also one of the largest consumers of the product and 70-80% of its production is consumed internally.

Syria stands second producing 25000 tons whereas Iran and Turkey produce 15000 tons. The new crop in Syria and Turkey is harvested in July-

September. Thus, until then, Indian cumin seed finds good market in overseas countries. Indian markets face some competition from these mar-

kets as their rates are generally lower than Indian rates. But with overall production in these countries being much lower than India, their stock

levels get exhausted fast and India again becomes the prominent exporter for the commodity.





MAJOR PRODUCING STATES

India is the largest producer, consumer and exporter of jeera in the world. The output has not been consistent and is dependent on the area under

the crop (which in turn depends on the price realizations during the previous year) and the yield (which is dependent on the weather factor).

Gujarat and Rajasthan are the major producers of jeera in India. They account for ~90% of total Indian production. The rest is produced in West

Bengal, Andhra Pradesh, Uttar Pradesh and Punjab. Major growing areas are Mehsana, Saurashtra and Kutch in Gujarat. The major growing

areas in Rajasthan are Barmer, Jalore, Nagaur, Pali, Ajmer, Bhilwara, Tonk, Jodhpur, Jaisalmer, Sirohi, Sikar and Bikaner. The major areas in

Gujarat are Banaskantha, Sabarkantha, Mehsana, Patan, Junagarh, Jamnagar, Rajkot, Bhavnagar, Amreli and Surendra Nagar.

MAJOR TRADING CENTERS

Unjha in Gujarat is one of the biggest trading centers for jeera. The others are mainly in Rajasthan and include Niwai, Kekri, Nagaur, Jodhpur,

Pratapgarh, Nembhaheda, Bhawani mandi, Jhalarapatan, Ramganj mandi, Rani, Palli, Kota, Jaipur and Rajkot along with Delhi.

FACTORS AFFECTING PRODUCTIVITY AND PRICE TREND

Rainfall pattern and temperature

Total area covered

Arrivals in the markets

Demand from millers, stockists and retailers

Quality of crop produced

Demand in the international markets

Currency fluctuations in Re vs Dollar

Stock level and production in the international markets – namely Syria and Turkey and their export prices.

Import and export policies by the Indian Govt.





CONTRACT SPECIFICATIONS / DELIVERY



Name of commodity Jeera

Ticker symbol JEERAUNJHA

Trading system NCDEX Trading System

Basis Ex-warehouse Unjha exclusive of sales tax/VAT

Unit of trading 3 MT

Delivery unit 3 MT

Maximum Order size 150MT

Quotation Rs per quintal

Tick size Re 5

Quality specification

Jeera of Indian origin with the following specifications. Jeera to be necessarily machine

cleaned

*Foreign matter includes anything other than jeera seeds e.g. sand, silica, pebbles, and

other edible/non edible seeds

Foreign matter* 1.0 % basis

Seeds with stalks 8.0 % max

Damaged,

discolored, shriveled

and immature seeds

2.0% basis

Insect damaged

matter

Should not be more than

0.5% Test weight (on

count basis)

Maximum 300 seeds

per gram Moisture 9% max

Quantity variation +/- 2%

Delivery center At the accredited warehouse(s) in Unjha (up to the radius of 60 km from the municipal limits)

Additional delivery centers

At the approved warehouse(s) in Jodhpur (up to the radius of 60 km from the municipal

limits) with location wise premium/discount as announced by the Exchange prior to launch

of contract



INDIAN AREA & PRODUCTION SCENARIO

Source : Spice Board of India





NCDEX MONTHLY SPOT RATE

NCDEX MONTHLY FUTURES RATE

Jeera rates in the spot markets have nearly doubled over the last 10 years. The main factor contributing to this rise in price has been the fall in

production – especially in Gujarat. Even though the area under production did not fall much, yet a fall in productivity ensured overall fall in produc-

tion for the commodity. The production being dependent on the vagaries of weather, it has been adversely affected due to the weather uncertain-

ties over the last few years. Rising export and domestic demand along with falling / stagnant production also ensured a firm trend for the com-

modity in the Indian markets.





EXPORTS

Jeera accounts for a major chuck of spices exports from India. The exports are mainly to countries like US, UK, Japan, Brazil, Bangladesh, Singa-

pore and many others.

Source: Spice Board of India

The exports during recent years have shown a huge rise due to increasing demand from EU and the US – and more importantly, the Gulf coun-

tries. It needs to be noted that Gulf countries generally meet their import demand from Turkey and Syria. But the continuous political disturbance

in those countries over last few years has ensured that the export demand shifted to India.

The production and export from Turkey and Syria have reportedly fallen, and the Indian exporters have benefitted from that. Better quality Indian

product and limited stocks in international markets due to low production there have ensured a rising demand for Indian jeera despite its higher

rates.

Also, the Indian production being a lot higher than that in Turkey, Syria or Iran, the Indian stock is generally available throughout the year while

the stocks in others get exhausted soon. So, most exporters generally turn to India for their requirements resulting in flare up in rates in the Indian

markets.

Apart from jeera, the byproducts of cumin seeds like oleoresins of cumin seeds and cumin oil is also exported from India. Due to cheaper rates in

Turkey and Iran, the Indian exports get affected. But Indian quality being better than those of others, it obviously attracts premium rates than

those of other origins.






Estimated exports of Spices in 2013-14


Thus the latest estimates predict jeera contributing more than 10% of all spice exports—both in terms of value and quantity. Quantity-wise it ranks

2nd and value-wise, it ranks 3rd w.r.t. the export figures from India. This goes on to show the importance jeera has in the Indian agriculture sector.



Commodity Quantity (tonnes) Value (Rs lakhs)

Pepper 21,250 94,002

Chilli 3,12,500 2,72,227

Turmeric 77,500 66,676

Dhaniya 45,750 37,186

Jeera 1,21,500 160,006

Total (of all spices) 8,17,250 13,73,539



INTERNATIONAL MARKET REPORT

Jeera crop calendar

Syria

Jeera has been an important crop for Syria w.r.t foreign exchange earnings. It is grown as a winter crop where it is sown in November-December

and harvesting is done during June-September. The main areas where it is grown there are in Aleppo, Idleb, Hama, Al-Rakka and Homs. Most of

the crop is exported and only ~10-15% is consumed internally. UAE and Saudi Arabia are the main importers for their crop. Syrian production

estimates have generally been at 20,000-25,000 tonnes.

Iran

In Iran, cumin seed is mainly produced in the Khorasan province with around 4000 hectares of area under cultivation and estimated production of

15,000 tons. The harvesting period is June-September coinciding with Syrian harvesting period. The local consumption unlike India is very limited

and major produce is available for exports. U.S., Europe and Middle-East countries remain the main target buyers for Iranian cumin. Its produc-

tion plays an important role in determination of prices of other origins in international market as Iran is one of the major exporters to the world

market. Production in Iran and Turkey generally vary between 10,000-15,000 tonnes each.



Country Sowing time Harvesting time

India Oct-Nov Feb-Mar

Syria Nov-Dec June-Sep

Turkey Nov-Dec July-Sep

Iran Nov-Dec June-Sep



MONTHLY PRICE TREND

(NCDEX rates mentioned)

(Average NCDEX Spot rates from 2007 to 2014)





MONTHLY PRICE TREND

The price pattern can be divided into 3 portions:

April to July

August to October

November to March

April to July : Trend Bullish

In India Jeera is harvested during February-March. The crop in the International markets from Turkey and Syria start arriving from July-

September. Low availability of stocks in the International markets (where production is far lower than that in India and stocks get exhausted) en-

sures full export demand from the Indian sub-continent. Thus we see prices rising from April onwards till Mid-August. The export demand for the

new crop starts rising as the prices are generally at very low levels till harvesting completes in March. There is summer season domestic demand

also in the Indian markets – especially from North India. This supports the uptrend further.

August to October : Trend Bearish

From July onwards, for the next 3-4 months, a fall is generally noted in the market rates. This is the time when the harvesting starts in Turkey and

Syria. Their rates being lower than the Indian rates, the exports from here get affected especially to the mid-East Asian countries. This is general-

ly the cooling period as traders wait for the rains to take place in Gujarat and Rajasthan to speculate on the sowing aspects for the next crop.

Again, weather in growing areas of Gujarat and Rajasthan too have some impact on the market sentiments as the sowing period starts within next

few months. Good rainfall activities during this period have bearish impact on the market sentiments and traders expect the high moisture content

in the soil to be beneficial for the crop sowing in coming months.

November to March : Trend very volatile

The trend during November to March depends basically depends on the weather factor. Rains before the sowing period are good for the sowing

prospects that start in October. Temperatures during the winter season are important for the growth of the crop. A cool climate is good for the

crop growth. Excessive rains can however damage the standing crop also. Exports too pick up during the winter season in November-December

(before the Christmas holidays) from US and the EU countries, which support the prices to some extent. However, during this critical period of

sowing, growth and harvesting stage, it is the weather factor that remains very critical in determining the sowing area, the productivity of the crop

and hence the overall production prospect for the crop. Any major variation in production prospects could have a long term impact on the price for

the commodity.





LATEST REPORTS

Fundamentals

Price for Jeera has cooled down even since it touched a high level of 17500 in January this year. Delayed sowing due to delayed arrival of

Monsoon last year and fall in productivity due to adverse weather conditions during the growth stage have resulted in apprehensions of a fall

in production by more than 20%. The sowing area has reportedly fallen by 25-30% due to late Monsoon rains.

Lack of strong demand on the export front have kept prices under check as also the high arrivals of the new crop which is sti ll continuing as

delayed harvesting has been there this year. New crop arrivals in the month of March were on the higher side – and that kept pressure on

the market rates. Exports and domestic demand have also remained low keeping further pressure on the prices.

However, overall strong Fundamental factors prevailed for the commodity. Delayed arrivals of rains last year lowered the sowing area. As

per Govt reports, in Gujarat, normal area is approximately 3.88 lakh ha. Till 5.1.2015, only 2.64 lakh ha have sown as compared to 4.54 lakh

ha last year. Sowing area during current year is likely to go down in Gujarat and Rajasthan due to lower price as compared to Coriander.

Area has shifted to Coriander and Fenugreek seed. Cumin output is expected to fall steeply in Gujarat this year. Output was 3.46 lakh tons

in the state last year but may fall this year as acreage is slashed by 42%. However, yield is expected to improve after the rainfall that the

state received recently. Still, there is less probability of the output to cross 2 lakh tonnes. On top of that are the recent unseasonal rains in

Gujarat and Rajasthan, which created apprehensions of crop damage and further fall in crop productivity.

Latest report from Spice Board of India indicates pickup in exports during April-Dec 2014 period at 1.28 lakh tonnes (up from 1.00 lakh

tonnes in April-Dec 2013) – a rise of 28% in Quantity and 8% in value. Targeted Export for 2014-15 period is 1.00 lakh tonnes. With Indian

produce being of superior quality, they fetch a premium w.r.t. International market. Adverse reports from International producers would be

beneficial for the Indian markets in the long term.

The exports have already started rising and further rise in exports are expected in coming weeks for the new crop. As crop arrivals slow

down, a rise in export and Festive season domestic demand are expected to support prices in the near term. Fall in production and lack of

stocks in the International markets would also ensure prices remain firm in the medium to long term.

Technicals



NCDEX Jeera August contract

S1 15100

S2 14400

R1 16900

R2 18100



jeera—special report - religare online producing countries india is the major producer of jeera...

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