Higher production prospects caused prices to fall, leading to a gain in Jeera from short-covering

Yesterday, jeera prices fell sharply by 2.5 percent, closing at 26545. This was mostly caused by increased production expectations in Gujarat and Rajasthan, two important cultivation regions. In reaction to record prices seen in the previous marketing season, farmers increased their cultivation areas, resulting in a four-year high in jeera acreage for the current rabi season.

Jeera cultivation increased by a significant 160% in Gujarat alone, beyond average acreage levels, and by a noteworthy 25% in Rajasthan. The quality of the produce may be threatened despite the increase in production by issues like decreased water availability, fewer cold days, and worries about fusarium wilt attacks on crops.

Concerns about climate change further increase the uncertainty surrounding the crop by raising the possibility of increased blight and sucking pest attacks. Even so, shipments were still down from the prior year in November 2023 despite a minor increase from October 2023. Although prices have dropped significantly by -680 rupees, the market is still seeing new selling pressure based on technical analysis, with a gain in open interest of 2.64%.

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