On Tuesday, profit booking and weaker demand at higher levels caused NCDEX jeera (cumin) futures to fall below 39,500 a quintal. Prior to a few weeks ago, jeera prices had risen to around $42,000 per quintal due to crop damage brought on by weather-related events that reduced yield and strong demand from both domestic and foreign markets, particularly from China in advance of its holiday season.
Higher exchange margins, which are making traders hesitant to buy at current levels, may be one of the causes of the decrease in jeera futures, according to Kedia Commodities. If prices move consistently in one direction, futures exchanges are required to raise the margins. Additionally, traders are hesitant to open new positions as a result of the prices reaching new highs, which increases the selling pressure.
The upcoming vacation in China, which is anticipated to slow demand from one of the top buyers, may also be a reason for the decrease in jeera futures prices. Any decrease in demand may cause prices to trend downward. However, given the supply-demand dynamics, despite the short-term weakening, the long-term outlook for jeera futures is still favorable.
India is the world’s top producer and exporter of jeera, and due to crop yield degradation, it is anticipated that availability would stay limited. Furthermore, prices are likely to be sustained over time due to the rising demand for Indian spices in international markets. The market may continue to feel some selling pressure in the near future due to the current level of uncertainty and caution among traders, it warned.