Jeera July futures in NCDEX touched a record high of Rs. 58,085 per quintal on Monday, before coming down to around Rs. 55,500 on Tuesday.<\/p>\n
This was due to profit booking and extension of additional surveillance margin of 2.5 per cent till July 18, including on all contracts to be launched in the future.<\/p>\n
The softening, according to some reports, is also because of fears of regulatory action on jeera traders over allegations of excessive speculation.<\/p>\n
Jeera crop has been on fire since the start of this year, soaring almost 55 per cent during the April-June quarter till June 27.<\/p>\n
The prices have jumped a whopping 73 per cent since January.<\/p>\n
The rally in prices has prompted traders to compare it with gold.<\/p>\n
Ten gram gold price on Tuesday was around Rs. 55,000 in Delhi, almost similar to a quintal of jeera in NCDEX.<\/p>\n
The rally has been primarily driven by a demand and supply shortage.<\/p>\n
Some traders said speculation is also playing a part.<\/p>\n
Fundamentally, traders said jeera demand is estimated to be around 8 million bags this year (2023-24) in India (1 bag=50 kgs).<\/p>\n
Supply is around 6.5 million bags, a shortfall of almost 23 per cent between demand and supply.<\/p>\n
The jeera crop has been impacted mainly due to unseasonal rains in Rajasthan and Gujarat and also due to shifting in acreage to other lucrative options by farmers.<\/p>\n
Initially, traders had estimated jeera production this year to be around 7.5 million tonnes but the unseasonal rains in March pulled down output further.<\/p>\n
Last year (2022-23), too, India produced around 6.6 million bags of jeera.<\/p>\n
The year before that (2021-22), production was almost 8-8.5 million bags.<\/p>\n
Traders said panic started when the word spread that jeera crop is seeing a big drop of just around 5 million bags.<\/p>\n
They said with such sky-high prices, there would be some sort of intervention.<\/p>\n
This may keep the market on tenterhooks for the next few weeks.<\/p>\n