Why jeera prices are shooting up in wholesale markets

On June 20, cumin prices touched a new high of Rs 54,125 per quintal at the APMC mandi of Unjha in Gujarat, the price-setting market for the crop. Here is what is driving the surge.

Farmers make piles of jeera at the Unjha APMC mandi. (Express Photo by Gopal B Kateshiya)

6 min readRajkotJun 23, 2023 12:32 PM IST First published on: Jun 21, 2023 at 07:38 PM IST

Cumin, commonly known as jeera, the aromatic seed that adds an extra punch of taste to Indian dishes, has turned hot in the past eight months or so.

On Monday (June 19), its price crossed the Rs 50,000 per quintal mark at the APMC (agricultural produce market committee) mandi of Unjha in Gujarat’s Mehsana district. On Tuesday, it touched a new high of Rs 54,125.

The accompanying chart shows various milestones in jeera prices at Unjha, starting from November 24, 2017, when they first touched Rs 20,000 per quintal. Much of the price increase, a more than doubling, has happened only since October 2022!

Jeera prices going up

What explains this unprecedented price spike?

Market functionaries attribute this to supply-demand imbalance. “Arrivals this year (the marketing season for jeera begins from mid-February and peaks in May) have been half of the demand. It has led to traders laying their hands on whatever is coming to the market, and jacking up prices in the process,” said Sitaram Patel, a leading commission agent at the Unjha APMC, the world’s largest wholesale market for the spice.

Why have prices shot up?

Both. India’s jeera production, according to government estimates, has fallen from 9.12 lakh tonnes (lt) in 2019-20 to 7.95 lt in 2020-21 and 7.25 lt in 2021-22. Traders reckon the size of the 2022-23 crop (sown in October-November and harvested in February-March) to be marginally lower, mainly due to unseasonal rains during the second half of March this time.

However, the output decline alone is not behind the current price surge, which has equally to do with the very low carry-forward or opening stocks. According to the Federation of Indian Spice Stakeholders (FISS) – an Unjha-based body of spice seed processors, traders and exporters – these stood at about 35 lakh bags (of 55 kg each) in February 2022, before the beginning of the last crop marketing season.

This time’s carry-forward from the 2021-22 crop has been just 3-4 lakh bags. The low inventory with traders, coupled with a dip in production, is what has resulted in prices being pushed up.

Is there any other factor that decides jeera prices?

India’s jeera production is meant for both its domestic market as well as for export. During 2022-23 (April-March), exports of cumin seeds amounted to 1.87 lt (valued at Rs 4,193.60 crore), as against 2.17 lt (Rs 3,343.67 crore) in the previous fiscal. The top export destinations include China, Bangladesh, US, UAE, Pakistan, Saudi Arabia and Turkey.

“China has been importing Indian cumin aggressively. Over the past three months alone, China has imported 25,000-30,000 tonnes of cumin from India, as crop there is not sufficient to meet the demand. Demand has gone up this year as hotels and restaurants are reopening after long-drawn Covid-19 restrictions. There is demand from Bangladesh and Pakistan also, because of the Bakrid festival towards the end of this month,” informed Alpesh Patel of MR Agro Industries, an Unjha-based jeera exporting firm.

The potential for price volatility is obviously higher in a commodity where there is both domestic and export demand. “The low carry-forward has meant a hand-to-mouth scenario for both exporters and domestic players. Everyone wants to buy now, since the new crop will arrive in the market only in mid-February next year,” he added.

Which are the major producers of jeera?

India accounts for some 70% of the world’s production of this seed spice. Other countries such as Syria, Turkey, UAE and Iran make up the balance 30%. Many of them, unlike India, have been facing production disruptions from civil war and natural disasters. Jeera is grown on about 8 lakh hectares area in India. Out of the total 7.25 lt production in 2021-22, two states – Gujarat (4.20 lt) and Rajasthan (3.03 lt) – had a combined 99.7% share.

Why do others not cultivate cumin?

Jeera is an extremely weather-sensitive crop. It requires a moderately cool and dry climate sans any humidity, which is conducive for fungal infestation during the crop’s flowering and seed development stages. That naturally limits the area of cultivation to Saurashtra, Kutch and the northern parts of Gujarat and adjoining districts of western Rajasthan such as Jalore, Barmer, Jodhpur, Jaisalmer, Pali and Nagaur. Unjha, enjoying the strategic advantage of being in the centre of the country’s jeera cultivation belt, has become the price-setting market for the crop.

How much have farmers benefited from high prices?

An estimated 80% of this year’s jeera harvest has already been marketed. It’s only the remaining 20% crop that will command prices of Rs 50,000-plus per quintal. However, Dinesh Patel, chairman of the Unjha APMC, believes that roughly half of those coming to sell now are farmers. The rest are aggregators and traders, who would have bought and stocked up from farmers. Most of the farmers bringing their crop to sell are from Rajasthan, who have the capacity to hold back their produce. “They may be farmers, but have learned to play the market just like us,” a commission agent-cum-trader noted.

What do the high prices mean for consumers?

Jeera isn’t an essential food, but a premium seed spice that imparts aroma to everything from curries to rice to soft drinks. It is also used in powdered form, whether as a single item or ingredient in milled garam masala mixtures sprayed on food dishes. But the overall quantities for such applications is generally very low. Unlike in the case of onions and potatoes, which have a bearing on the consumer price index, the government may not be inclined to intervene much in the market to control its prices.