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Informist, Tuesday, Dec. 31, 2024

By Taniva Singha Roy

MUMBAI – The outlook for spices for 2025 is a mixed one. While analysts are bullish on jeera due to prospects of lower production and carryover stocks, turmeric prices are seen supported despite higher production. Coriander prices are expected to fall next year due to concerns about a drop in supply, though prices are likely to be largely steady in the near term, analysts said.

JEERA

At 800,000 hectares, the area under jeera in marketing year 2025-26 is down 20%, which is why prices are likely to rise, said Ravi Shankar Pandey, senior analyst at SMC Global Securities. Rising domestic demand is also likely to support prices in the near term, Pandey said. This year, jeera sowing was hit because farmers shifted to more profitable crops such as wheat, chana, and garlic, Pandey said.

Robust export demand for jeera will further lift futures as it has the tendency to trade with a premium over the spot price. Export demand has increased due to a recent drop in prices, and is likely to surge further, even with rising prices, according to analysts at SMC Global Security.

In 2025, jeera is likely to get major support at INR 19,000-INR 21,000 per 100 kg and face resistance at INR 38,000-INR 40,000, said Anu V. Pai, analyst at Geojit Communications.

TURMERIC

Despite anticipation of higher production, analysts are bullish about turmeric in the coming year as carry-forward stocks are low. In the near term, prices at major trading centres are likely to increase as arrivals decline, with farmers expected to hold on to stocks in anticipation of an increase in prices. Higher local and overseas demand ahead of Ramadan is also likely to support prices.

In 2024-25 (Apr-Sept), turmeric exports rose 1% to 92,911.47 tonnes, according to data from Spices Board of India. In October, they were up 57% on year at 15,938 tonnes. The UAE emerged as the largest buyer of Indian turmeric in October, with purchases of 3,076 tonnes, 195% higher than in the previous year. Purchases by Bangladesh rose 48% to 1,867 tonnes. Other buyers were the US, Iran and Malaysia. Fresh export enquiries from Bangladesh have increased, and this will support market sentiment.

However, in the long term, analysts are bearish on the spice due to prospects of higher production, according to SMC Global Securities. Analysts say once prices drop below INR 13,000 per 100 kg, they could fall to INR 12,400 per 100 kg and if this level is breached, they could fall to INR 11,400 per 100 kg. Turmeric could face resistance of INR 15,000 per 100 kg and may rise up to INR 16,600 per 100 kg in the long term, said Pai.

CORIANDER

Most brokerage firms expect coriander prices to fall in 2025 due to subdued export demand. But in the near term, factors such as a slowdown in sowing due to adverse weather conditions, shrinking arrivals, and lower production estimates are likely to support prices. Total production of coriander is estimated to drop 11% on year to 630,000 tonnes in 2025-26, Pandey said. Sowing activities improved in Gujarat, with the acreage at 120,512 hectares as on Dec. 23, against 120,234 hectares a year ago, but the acreage in Rajasthan and Madhya Pradesh is reportedly lower.

Coriander prices could fall to INR 7,540 per 100 kg; if they break this level, they could fall to INR 6,900 and then INR 6,350 in the long term. At the higher end, prices could reach INR 8,100, and then, test resistance at INR 8,500 and INR 9,250, according to Geojit Communications.

ACREAGE

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

Although sowing of jeera and coriander is expected to have progressed in December, market participants see a 5-8% drop in jeera acreage and a 10% fall in the area under coriander compared to last year. This drop is mainly because farmers shifted to crops fetching higher returns, such as wheat and chana, which benefit from higher minimum support prices, analysts said. For the 2025-26 rabi marketing season, the government has 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.

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 in the current rabi season is seen lower, SMC's Pandey said production would be enough to meet consumption, with total coriander stocks seen at 1 million tonnes by the end of the crop year. Annual consumption of coriander in the country is 720,000-750,000 tonnes, with a 2-5% annual growth rate, he said.

For jeera, the drop in acreage may not be much of an issue, as carryover stocks are plentiful. "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, the ending stock of jeera was 255,000 tonnes.  End

Edited by Avishek Dutta

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