Cold wave pushes up prices of mustard; cumin seeds cost less

Cold wave pushes up prices of mustard; cumin seeds cost less
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First Published: Thu, Jan 31 2008. 12 16 AM IST
Updated: Thu, Jan 31 2008. 12 16 AM IST
Ahmedabad: The unexpected cold wave sweeping through parts of north and central India since 14 January has caused prices of cumin seeds (jeera) to plummet even as it has resulted in an increase in the price of mustard.
Low temperatures improve the productivity of the cumin plant as well as the quality of cumin seeds, and traders in one of India’s biggest jeera markets, the Unjha Commodities Market in north Gujarat, are looking forward to a bumper crop this season, which will begin in March.
Low temperatures have an opposite effect on the mustard plant and traders fear this year’s crop won’t be as bountiful as that in previous years.
Temperatures in north India and in the entire northern hemisphere usually rise in the second half of January. The Hindu harvest festival of Makar Sankranti falls exactly midway through January. However, this year, temperatures in north and central India have remained low even after the festival.
“The area under (jeera) cultivation in Saurashtra, north Gujarat, and Rajasthan has increased over one-and-a-half times from 300,000ha last season to 450,000ha this season. This, coupled with a prolonged cold wave, would prop up production of the crop this season by 35-40%,” said Pravinbhai Patel, proprietor of Unjha Commodities & Securities Ltd, a private firm trading in jeera and psyllium seed husks (or Isabgol).
While cumin seeds are used for seasoning across India, psyllium seed husks are the active ingredients in some medicines that relieve constipation.
Patel expects the production of jeera to rise from 2.2 million sacks (each weighing 20kg) to three million sacks this season. This expectation of higher production has hammered down the price of jeera from Rs2,500 per 20kg sack (Rs125 per kg) a few months back to Rs1,700-1,800.
Prices of the product on commodity exchanges such as Multi-Commodity Exchange and National Commodities & Derivatives Exchange reflect this trend. “Jeera today is quoting at Rs108 per kg on these exchanges and still they are finding it difficult to attract buyers,” Patel said.
“India consumes about 2.1 million sacks of jeera while the rest is exported to some Arab nations and Europe. Last year Turkey had bad monsoon and we had only about 100,000 sacks left after meeting domestic needs. This season, we expect Turkey to grow good quantity of jeera and domestic production in India would grow by more than 35%. This means more jeera would be available locally and the export market too may not see enough demand,” said Bharat Patel, a trader in Mehsana and Unjha jeera bazaar. Pravinbhai Patel and Bharat Patel claim that this could lead to a further reduction in the price of jeera—to Rs1,200-1,300 per 20kg sack by March.
Meanwhile, mustard prices have risen due to heavy speculative buying in the futures and cash markets, primarily due to the fear of crop damage in Rajasthan and Madhya Pradesh.
“The standing mustard crop in north-west Rajasthan, especially in Ganganagar, Alwar, Kota and Jaipur, has been hit hard as temperatures have fallen below zero degree (Celsius) in several places,” Biren Vakil of Ahmedabad-based commodities consulting firm Paradigm Commodities Ltd said.
Mustard futures prices have moved up to Rs500, from Rs470 per 20kg last week. According to some traders, around 15-20% of the crop in Rajasthan has been damaged in the cold wave.
Last week, the Central Organizaton for Oil Industry and Trade, an industry body representing the oil seeds industry, estimated this year’s mustard crop at around 5.2-5.3 million tonnes (mt). The Solvent Extraction Association, another industry body, estimated it at 5.6mt, down from 5.7mt last year. “However, the frost and cold wave in Rajasthan and north India could now see the mustard crop drop to the levels of around 4.5mt, compared with last year’s crop of 5.7mt,” a senior SEA official who did not wish to be identified said.
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First Published: Thu, Jan 31 2008. 12 16 AM IST