Short covering helps Jeera when prices fall as a result of increased production

Jeera futures recorded a tiny gain of 0.42%, closing at 25380, on short covering following a decrease in prices due to increased production prospects in Gujarat and Rajasthan, the two major farming states. Due to farmers expanding cultivation in response to record prices in the previous marketing season, jeera acreage reached a four-year high during the current rabi season.

Gujarat’s jeera agriculture spanned 5.60 lakh hectares, a noteworthy 160% rise over the previous year and an area that exceeded the typical 3.5 lakh hectares. In addition, jeera farming in Rajasthan increased by 25% to 6.90 lakh hectares from 5.50 lakh hectares the year before.

Farmers are managing issues including less water availability, fewer cold days, and worries about fusarium wilt assaults on crops despite the possibility of a bountiful crop in India. In addition, the demand for Indian jeera has decreased globally as consumers choose Turkey and Syria over India because of India’s higher prices.

Complicating the picture is the expectation of increased occurrences of blight and pest infestations as a result of climate-related problems. Nonetheless, exports of jeera increased by 51.05% in December 2023 compared to November 2023 but decreased by 3.73% in comparison to December 2022. With open interest declining by 0.75% to close at 2397 and prices rising by 105 rupees, the market appears to be under a short covering.

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