Jeera Futures Hit Record High of Rs 36,000 Amidst Fears of Crop Shortage

The jeera-growing regions of Rajasthan's southern and northwestern districts of Alwar, Jaisalmer, Jaipur, Bikaner, Bhilwara, and Barmer have received a second wave of unseasonal rainfall in the last week, raising concerns over crop quality.

Jeera futures for April expiry quoted as high as Rs 36,455 per quintal on the National Commodity and Derivatives Exchange (NCDEX), while the far-month May contract for jeera quoted above Rs 36,600 per quintal amid renewed concern about crop quality.

Prices have increased by nearly 45 percent since December 2022, when they were Rs 25,085 per quintal. Jeera prices were quoted at Rs 35,399 per quintal in the spot markets at Unjha in north Gujarat, with arrivals ranging between 22,000 and 25,000 bags. "The impact of the unseasonal rains will be felt primarily in Rajasthan, where the crop is still in fields or at the harvest stage," said Jayantibhai Patel, a jeera trader from Unjha. In Rajasthan, crop damage could amount to 15-20% of total crop yield.

In Gujarat, however, we do not expect a significant impact on the crop. However, the quality has suffered, which is fueling the higher price sentiment. Moisture or overcast weather has an affect on the jeera crop's seed quality, which typically turns blackish, indicating rotting. The Federation of Indian Spice Stakeholders (FISS) produced a crop estimate for seed spices in February this year, forecasting the jeera crop for 2022-23 at 3.84 lakh tonnes (69.96 million bags of 55 kg each), up 28% from last year's 3.01 lakh tonnes.

FISS reported a 12.9% rise in acreage in Gujarat and Rajasthan, while yields are predicted to be 13.2% higher than last year. Gujarat's jeera harvest is expected to be 22% higher at 1.41 lakh tonnes, while Rajasthan's crop is expected to be 32% higher at 2.43 lakh tonnes. However, for traders, the decreased stock positions and crop weather damage are significant reasons to be positive on the price.

According to market sources, the jeera crop is expected to be 60-65 lakh bags, with a carryover stock of roughly 5 lakh bags. According to dealers, prices may rise further as export demand from China and other nations has been weak in recent weeks. Notably, Lok Sabha Speaker Om Birla, who is also a member of the Rajasthan Legislative Assembly, has allegedly raised worry about crop loss caused by unseasonal rainfall in the state.