Spices get cheaper on weak export demand and bigger harvest

Prices of spices including coriander, turmeric and cumin have fallen 5% to 7% in the past month because of a bigger harvest and weak export demand.

Coriander future prices for December delivery on the NCDEX dropped 7.43% to Rs 6,300 per quintal of 100 kg; turmeric fell 6.32% to Rs 5,525 per quintal; and cumin was down 4.65% to Rs 13,755 per quintal.

Export demand is down 10% since September largely due to concerns of pesticide residue, high moisture content and competition from Ukraine and Syria, Mitesh Patel, chairman of the Federation of India Spices Stakeholders said.

“In April-August spice exports had increased by 15% which have dropped by 10% in September-October. This led to a drop in prices of most of the spices,” said Patel.

The recent ban by Egypt on import of cumin seed from India due to pesticide concerns and a 20% higher crop than the previous year has put pressure on the prices, said Patel. “China and Bangladesh reduced imports of fennel and cumin seed due to high moisture content. Also, cheaper supplies of coriander by Syria reduced India’s viability to export coriander in the global market,” he added.

Paras Budhiraja, MD, Paras Spices said that currently buyers were making limited purchases, unlike previous years when they bought inventories for six to eight months or for the entire year.

“This year the domestic production has been very good and prices remain low. Hence, the purchases have been limited and prices for coriander, turmeric and cumin have been stable to the negative side. However, by January-February a clear picture will emerge when the peak demand and orders usually come,” Budhiraja said.

Reports of good sowing of coriander due to ample water availability in the reservoirs has led to a drop in the prices in spot and futures, said Amit Gupta, research associate, Kedia Advisory. “Turmeric prices dropped as demand was weak in spot markets with most traders holding huge inventories. The cumin crop early this year has been very high this year and current sowing trends from Gujarat shows a 156% increase in the acreage at 50,496 hectares compared to the same time last year. While there is a lot of time for the actual harvest to arrive in the market, traders will be focusing on the sowing activity in near term,” he said.