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Jeera (Cumin): A Spicy Saga of Supply and Demand

Jeera, or cumin, is an essential ingredient in Indian and many global cuisines. Over the past couple of years, Jeera prices have been on a relentless upward trajectory, scaling all-time records. The root cause of this price surge can be traced back to two consecutive years of inadequate crops. In 2023, Jeera yields were especially disappointing, dealing a severe blow to the industry. The proverbial straw that broke the camel's back, however, was the untimely rain during harvest time. With the 2022 crop already falling short of annual demand, there was little relief from carry-over stocks. Consequently, farmers have offloaded most of their inventory, leaving remaining stocks in the hands of traders.

The skyrocketing prices have had a noticeable impact on demand. Retail traders, in particular, have shied away from Jeera due to its high cost, and households have been forced to cut back on consumption. To compensate for the high cost of Jeera, processors are substituting it with coriander to produce spice powders, further affecting Jeera's domestic demand. The export scenario also reflects the price sensitivity of Jeera. In June 2023, India exported approximately 10,411.14 tonnes of Jeera, marking a significant 59.81% drop compared to May 2023. As we enter the Indian festival season, domestic demand for Jeera is expected to pick up. Additionally, there is anticipation of reduced imports and the entry of new investors and stockists into the market within the next six months. However, it's worth noting that the new harvest season does not commence before February, and Jeera prices are expected to remain firm until then.

Another intriguing aspect of the Jeera market is the role of international suppliers. Approximately 70 to 75% of the total cumin import deal from Syria and Turkey has experienced defaults, with only 25% reaching India. The record prices in India have created a sense of eagerness surrounding the Turkish cumin crop in the market. Bangladesh is also emerging as a prominent player in the cumin trade due to its competitive pricing. Taking all these factors into consideration, it's unlikely that Jeera prices will cross the 70,000 mark by October 2023. However, in the coming 3-4 months, we can expect the prices to test levels beyond 82,000, driven by a combination of domestic demand resurgence and international dynamics.

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