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Informist, Wednesday, Nov. 27, 2024

 

By Shreya Shetty and J. Navya Sruthi

 

MUMBAI – Acreages of jeera and coriander are likely to fall by at least 5% and 10%, respectively, during the current rabi season, analysts said. The fall in area under the spices is mainly due to farmers shifting to more lucrative crops such as wheat, chana, and garlic, traders and analysts said.

 

Currently, the acreage of coriander and jeera is low in Gujarat, Madhya Pradesh, and Rajasthan, market participants said, attributing the fall to delayed sowing in the current season owing to late harvest of kharif crops. Gujarat and Rajasthan are major jeera and coriander producing states in India, while Madhya Pradesh is among the top producers of coriander.

 

In Gujarat, as of Monday, the area under jeera fell 76.3% on year to 57,915 hectares from 244,639 hectares last year, according to the weekly sowing report released by the state agriculture department. Coriander acreage in the state also fell 71.9% on year to 15,955 hectares from 56,737 hectares a year ago, the report showed.  

 

Although the sowing of jeera and coriander will progress in December, market participants still see a 5-8?ll in jeera acreage and 10% drop in the area under coriander as compared to last year. This drop in sowing is mainly due to higher returns on crops such as wheat and chana, which are supported by higher minimum support prices, analysts said. For the 2025-26 rabi marketing season, the government had set the minimum support price of wheat 7% higher at INR 2,275 per 100 kg and that of chana at INR 5,440 per 100 kg, up 4% from the previous year. 

 

The acreage of jeera and coriander could fall by 12-20% on year, Satyanarayana Gupta, a local trader from Rajasthan's Ramganj said. However, the current position of the acreage will be apparent only by Dec. 15, when rabi sowing is well underway in the prominent spices-growing states, he said. 

 

RECAP 2023
In September 2023, jeera futures on the National Commodity and Derivatives Exchange had touched a record high of INR 64,000 per 100 kg due to a drop in yield and acreage. Following the all-time high prices, jeera acreage had increased in last rabi season, which later pushed prices down.

 

According to data from the Spices Board of India, jeera production rose to 860,087 tonnes in 2023-24, from 577,273 tonnes the previous year. Higher supplies during last year's rabi season have led to larger ending stocks of jeera in 2023-24, and farmers received lower returns as prices remained at the INR 30,000 per 100 kg level, Ravi Shankar Pandey, senior analyst at SMC Global Securities, said. 

 

However, the situation was different when it came to coriander. Farmers have shifted from coriander to other crops during the last rabi season because of higher stocks from the previous season, which led to lower returns. In 2023-24, coriander prices dropped by at least 10% on year to INR 7,244 per 100 kg, which led to lower production in the year.

 

According to the data from the Spices Board of India, the area under coriander fell 18% on year to 583,294 hectares in 2023-24 and the production was also down at 791,273 tonnes from 973,973 tonnes the previous year.  

 

Despite lower production in last year's rabi season, SMC's Pandey said that the ending stocks in 2023-24 were around 270,000 tonnes, which are being used as carry-forward stocks in the current year. The expert sees coriander output dropping by 25% during the current season, due to lower returns compared to wheat and chana. 

 

CONSUMPTION
Despite the lower acreage of coriander and jeera, traders and experts do not see any deficit in either of the spices till next year's rabi arrivals. Though coriander output is seen lower in the current rabi season, SMC's Pandey said that the production will be enough to meet consumption, with total coriander stocks seen at 1 million tonnes by the end of the crop year. The annual consumption of coriander in the country is 720,000-750,000 tonnes, with a 2-5% annual growth rate, he said. 

 

However, the lower acreage might affect consumption in 2025-26, especially in the masala industry, with coriander used in several blended spices, Pandey said.  

 

Similarly, India's jeera consumption will not be affected due to lower acreage as plenty of stocks are available in domestic markets. "Though I see the annual consumption increasing by 15-17% on year as stockists load up their inventories, we still see this year's (2024-25) ending stocks rise by 40-50% on year because of adequate availability," Pandey said. In 2023-24, ending stocks of jeera were 255,000 tonnes. 

 

EXPORT DEMAND
The export demand for jeera this year has been better than that for coriander. Jeera exports during Apr-Sept were 119,249.5 tonnes, 70% higher than in the same period last year, according to data from the Ministry of Commerce and Industry. India accounts for 80% of the world's total jeera production, and exports more than 60% of its output, SMC's Pandey said.  

 

"There is good demand for Indian jeera from China, Syria, and Turkey, which will support export demand," Pandey said. Lower sowing of the spice is unlikely to weigh on exports of the spice due to ample stocks of jeera, he said.

 

However, the scenario is different for coriander, as the exports of the spice are seen down due to ongoing geopolitical tensions. While the country produces around 54% of the world's total coriander, it exports only 20-25% of the spice.

 

The export pattern for coriander has not been good in the past two years, adding to the drop in demand and thus in acreage, Pandey said. Coriander exports as of September 2024-25 (Apr-Mar) were 22,279.6 tonnes, down 64.99% from 63,632.4 tonnes exported in the corresponding period last year, according to data from the ministry.

 

FUTURES MARKET
Experts see higher gains in coriander prices than in jeera due to tighter supplies and lower acreage of coriander. Even though jeera acreage is also likely to fall in the current rabi season, Pandey said higher stocks of the spice are likely to keep prices rangebound at INR 35,000-38,000 per 100 kg. 

 

The price of the most active December contract of coriander on the NCDEX on Wednesday was INR 7,726 per 100 kg down 1.6% from the previous close.

 

Prices of jeera are moving sideways currently, said Anu V. Pai from Geojit. "Any movement will solely depend on the progress of sowing and export demand for the spice, which has been good so far," she said. On the other hand, prices of coriander are on an upswing as the market is reacting to news of lower acreage.

 

Coriander prices are likely to rise to INR 12,500 per 100 kg with respect to current fundamentals, SMC's Pandey said. Support for coriander is seen at INR 6,900 per 100 kg and resistance is seen at INR 12,500 per 100 kg, he said. Geojit's Pai sees support for coriander at INR 6,700 per 100 kg and resistance at INR 9,900 per 100 kg. 

 

The price of the most active December contract of jeera on the NCDEX on Wednesday was INR 25,030 per 100 kg, down 1% from the previous close. End
 

Edited by Deepshikha Bhardwaj

 

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