JUNE 10 2016
CUMIN UPDATE
INDIA
Nearly 70% of Indian 2016 crop has already arrived in the market. Export demand has been slow with China being the dominant importer this year and ensuring prices remain on higher levels supported by the low carryover stocks. Local stockists have still not covered their requirements and few hundred tons are lying in the exchange warehouses. IPM cumin projects have failed miserably, due to unexpected changes in weather.
The commodity exchange followed the same trend like last year – moving up very sharply in the months of February to middle April and then moving down sharply between middle April to May. This led to a loss of a lot of export orders as buyers were confused to the direction of the market. Lower priced contracts executed during Gulfood and World Spice Congress were either washed out or renegotiated or delayed.
The cumin exports are decreasing in quantity terms: 2014-15 - export 1, 55,000 MTs 2015-16 - export 1,00,000 MTs 2016-17 – export 80-90,000 MTs
As Ramadan has started and summer holidays in Europe and USA, demand is very sluggish at the moment and prices are floating.
Going forward, we may witness La Nina phenomenon this year, resulting in heavy rainfall leading to soil with heavy moisture. This may delay the new crop sowing, which normally starts in end-October, to middle of November and December and maybe a lower crop. We estimate prices to be highly volatile and firm during the period of October to January, 2017 – if the rainfall follows the La Nina phenomenon.
SYRIA
Syrian cumin crop is already harvested and some Dubai sellers are aggressively selling at USD 2275-2350/- PMT levels – quality/purity being a big question mark, because of the strife in Syria. The good/genuine Syrian exporters are offering at levels of USD 2450/2500/- PMT.
We estimate the Syrian cumin crop to be about 15,000 mts – good quality and density of the seeds. Farmers will try and sell the cargo asap to encash the material. Roads are still difficult, but accessible and Lattakia port is working. There maybe some delay in transport and delivery due to Ramadan. Government regulations
TURKEY
As on date, the Turkey new crop cumin looks good, in the range of 8000-10,000 mts. We all remember the last year’s scenario when unexpected rainfall led to dark seeds. So far, the rain clouds are not around. Turkish lira has been highly volatile in the last couple of months and has dragged down the prices. If it sustains around current levels and the crop is as per the above range, we might see prices coming to levels of USD 2450-2600/- PMT. Crop will start coming by end of June, but due to the BAIRAM holidays during 27th week, the first shipments will not leave Turkey before 15th July, 2016.
AFGHANISTAN
From reliable sources, we understand that the crop this year has been damaged due to unseasonal rains and will lead to darkish seeds.
BULLISH FACTORS
1. Empty Pipeline across local and international markets – still valid, as all buyers are buying hand to mouth. Unlike last year, wherein Dubai market was offering Indian cumin much cheaper than local levels
2. Small carryover stocks from last year – still valid
3. Turkey and Syria crop only from June onwards (Ramadan demand will be over by then) – this will become a big bearish factory for at least the months of July and August
4. China demand has not yet comes as much as expected – China did cover a good quantity during April and May (from Mundra, Indian cumin exported to China in April – about 3500 mts and in May about 7000 mts), but China demand is still pending and it remains to be seen whether they shift to Turkey or Syria
5. Indian currency has started strengthening – always a factor in current volatile world economy
BEARISH FACTORS
1. Slow economy and financial tightening across markets, including geo-political tensions in Middle East and North Africa, fear of currency devaluation in China and Egypt – most of the factors still remain
2. At higher prices, buyers will prefer Turkish or Syrian origin cumin compared to Indian cumin – this is the reason why we are seeing some softening of prices currently (though domestic demand may keep markets at current levels)
3. South American weak currencies and their preference for cheapest cumin may get affected by stricter controls from Spices Board - more efforts being put in reducing adulterated cumin exports and this may lead to lower quantity buying from South American countries. On the flipside, the South American buyers shifting to genuine cumin may help improve prices.
Please feel free to contact us for more regular updates and customised offers for spices from major origins by email (export@supremia.ro)