CROP. JEERA Special report. Sowing and harvesting period. Cropping season

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1 CROP Jeera or cumin seed is the dried fruit of a small herbaceous plant and is used mainly in cooking in India. It is grown in countries like India, Turkey and Syria and is used as food item and in medicines and has been a symbol for culture in Asian and African countries. Jeera accounts for 20-30% of total Indian spices exports. Jeera can be produced on almost all soil types but the soil, which suits the best to this crop, is a well-drained, fertile sandy soil type. It needs a minimum of 3 to 4 months of duration period after which it is harvested. A dry climate is required for proper cultivation and rains can be harmful especially during flowering period as fungal disease can set in. The sowing is done in October-November. Harvesting starts from February-March. As jeera is a weather-sensitive crop, the quality is adversely affected if rains occur during harvesting time. Again a cool climate during the sowing season is beneficial for the crop during growth stage. February-March is the peak arrival season. Sowing and harvesting period Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Sowing Harvesting Cropping season Region Cultivation period Harvesting period Saurashtra mid Oct mid Nov mid Jan-mid Feb North Gujarat Nov Feb to mid-march Rajasthan mid Nov-mid Dec March

2 MAIN PRODUCING COUNTRIES India is the major producer of jeera followed by Turkey, Syria and Iran. It is also produced in very small quantities in countries like Pakistan, Egypt, Afghanistan and Chile. There has been a general increase in Indian production over the last few years. India contributes ~70% of total World Production. It is also one of the largest consumers of the product and 70-80% of its production is consumed internally. Syria stands second producing tons whereas Iran and Turkey produce tons. The new crop in Syria and Turkey is harvested in July- September. Thus, until then, Indian cumin seed finds good market in overseas countries. Indian markets face some competition from these markets as their rates are generally lower than Indian rates. But with overall production in these countries being much lower than India, their stock levels get exhausted fast and India again becomes the prominent exporter for the commodity.

3 MAJOR PRODUCING STATES India is the largest producer, consumer and exporter of jeera in the world. The output has not been consistent and is dependent on the area under the crop (which in turn depends on the price realizations during the previous year) and the yield (which is dependent on the weather factor). Gujarat and Rajasthan are the major producers of jeera in India. They account for ~90% of total Indian production. The rest is produced in West Bengal, Andhra Pradesh, Uttar Pradesh and Punjab. Major growing areas are Mehsana, Saurashtra and Kutch in Gujarat. The major growing areas in Rajasthan are Barmer, Jalore, Nagaur, Pali, Ajmer, Bhilwara, Tonk, Jodhpur, Jaisalmer, Sirohi, Sikar and Bikaner. The major areas in Gujarat are Banaskantha, Sabarkantha, Mehsana, Patan, Junagarh, Jamnagar, Rajkot, Bhavnagar, Amreli and Surendra Nagar. MAJOR TRADING CENTERS Unjha in Gujarat is one of the biggest trading centers for jeera. The others are mainly in Rajasthan and include Niwai, Kekri, Nagaur, Jodhpur, Pratapgarh, Nembhaheda, Bhawani mandi, Jhalarapatan, Ramganj mandi, Rani, Palli, Kota, Jaipur and Rajkot along with Delhi. FACTORS AFFECTING PRODUCTIVITY AND PRICE TREND Rainfall pattern and temperature Total area covered Arrivals in the markets Demand from millers, stockists and retailers Quality of crop produced Demand in the international markets Currency fluctuations in Re vs Dollar Stock level and production in the international markets namely Syria and Turkey and their export prices. Import and export policies by the Indian Govt.

4 CONTRACT SPECIFICATIONS / DELIVERY Name of commodity Ticker symbol Trading system Basis Unit of trading Delivery unit Maximum Order size Quotation Jeera JEERAUNJHA NCDEX Trading System Ex-warehouse Unjha exclusive of sales tax/vat 3 MT 3 MT 150MT Rs per quintal Tick size Re 5 Jeera of Indian origin with the following specifications. Jeera to be necessarily machine cleaned Foreign matter* Seeds with stalks Damaged, 1.0 % basis 8.0 % max 2.0% basis discolored, shriveled Quality specification and immature seeds Insect damaged Should not be more than matter Test weight (on 0.5% Maximum 300 seeds count basis) Moisture per gram 9% max Quantity variation +/- 2% *Foreign matter includes anything other than jeera seeds e.g. sand, silica, pebbles, and other edible/non edible seeds Delivery center At the accredited warehouse(s) in Unjha (up to the radius of 60 km from the municipal limits) Additional delivery centers At the approved warehouse(s) in Jodhpur (up to the radius of 60 km from the municipal limits) with location wise premium/discount as announced by the Exchange prior to launch of contract

5 INDIAN AREA & PRODUCTION SCENARIO Source : Spice Board of India

6 NCDEX MONTHLY SPOT RATE NCDEX MONTHLY FUTURES RATE Jeera rates in the spot markets have nearly doubled over the last 10 years. The main factor contributing to this rise in price has been the fall in production especially in Gujarat. Even though the area under production did not fall much, yet a fall in productivity ensured overall fall in production for the commodity. The production being dependent on the vagaries of weather, it has been adversely affected due to the weather uncertainties over the last few years. Rising export and domestic demand along with falling / stagnant production also ensured a firm trend for the commodity in the Indian markets.

7 EXPORTS Jeera accounts for a major chuck of spices exports from India. The exports are mainly to countries like US, UK, Japan, Brazil, Bangladesh, Singapore and many others. Source: Spice Board of India The exports during recent years have shown a huge rise due to increasing demand from EU and the US and more importantly, the Gulf countries. It needs to be noted that Gulf countries generally meet their import demand from Turkey and Syria. But the continuous political disturbance in those countries over last few years has ensured that the export demand shifted to India. The production and export from Turkey and Syria have reportedly fallen, and the Indian exporters have benefitted from that. Better quality Indian product and limited stocks in international markets due to low production there have ensured a rising demand for Indian jeera despite its higher rates. Also, the Indian production being a lot higher than that in Turkey, Syria or Iran, the Indian stock is generally available throughout the year while the stocks in others get exhausted soon. So, most exporters generally turn to India for their requirements resulting in flare up in rates in the Indian markets. Apart from jeera, the byproducts of cumin seeds like oleoresins of cumin seeds and cumin oil is also exported from India. Due to cheaper rates in Turkey and Iran, the Indian exports get affected. But Indian quality being better than those of others, it obviously attracts premium rates than those of other origins.

8 Source: Spice Board of India Estimated exports of Spices in Commodity Quantity (tonnes) Value (Rs lakhs) Pepper 21,250 94,002 Chilli 3,12,500 2,72,227 Turmeric 77,500 66,676 Dhaniya 45,750 37,186 Jeera 1,21, ,006 Total (of all spices) 8,17,250 13,73,539 Source: Spice Board of India Thus the latest estimates predict jeera contributing more than 10% of all spice exports both in terms of value and quantity. Quantity-wise it ranks 2 nd and value-wise, it ranks 3 rd w.r.t. the export figures from India. This goes on to show the importance jeera has in the Indian agriculture sector.

9 INTERNATIONAL MARKET REPORT Jeera crop calendar Country Sowing time Harvesting time India Oct-Nov Feb-Mar Syria Nov-Dec June-Sep Turkey Nov-Dec July-Sep Iran Nov-Dec June-Sep Syria Jeera has been an important crop for Syria w.r.t foreign exchange earnings. It is grown as a winter crop where it is sown in November-December and harvesting is done during June-September. The main areas where it is grown there are in Aleppo, Idleb, Hama, Al-Rakka and Homs. Most of the crop is exported and only ~10-15% is consumed internally. UAE and Saudi Arabia are the main importers for their crop. Syrian production estimates have generally been at 20,000-25,000 tonnes. Iran In Iran, cumin seed is mainly produced in the Khorasan province with around 4000 hectares of area under cultivation and estimated production of 15,000 tons. The harvesting period is June-September coinciding with Syrian harvesting period. The local consumption unlike India is very limited and major produce is available for exports. U.S., Europe and Middle-East countries remain the main target buyers for Iranian cumin. Its production plays an important role in determination of prices of other origins in international market as Iran is one of the major exporters to the world market. Production in Iran and Turkey generally vary between 10,000-15,000 tonnes each.

10 MONTHLY PRICE TREND (NCDEX rates mentioned) (Average NCDEX Spot rates from 2007 to 2014)

11 MONTHLY PRICE TREND The price pattern can be divided into 3 portions: April to July August to October November to March April to July : Trend Bullish In India Jeera is harvested during February-March. The crop in the International markets from Turkey and Syria start arriving from July- September. Low availability of stocks in the International markets (where production is far lower than that in India and stocks get exhausted) ensures full export demand from the Indian sub-continent. Thus we see prices rising from April onwards till Mid-August. The export demand for the new crop starts rising as the prices are generally at very low levels till harvesting completes in March. There is summer season domestic demand also in the Indian markets especially from North India. This supports the uptrend further. August to October : Trend Bearish From July onwards, for the next 3-4 months, a fall is generally noted in the market rates. This is the time when the harvesting starts in Turkey and Syria. Their rates being lower than the Indian rates, the exports from here get affected especially to the mid-east Asian countries. This is generally the cooling period as traders wait for the rains to take place in Gujarat and Rajasthan to speculate on the sowing aspects for the next crop. Again, weather in growing areas of Gujarat and Rajasthan too have some impact on the market sentiments as the sowing period starts within next few months. Good rainfall activities during this period have bearish impact on the market sentiments and traders expect the high moisture content in the soil to be beneficial for the crop sowing in coming months. November to March : Trend very volatile The trend during November to March depends basically depends on the weather factor. Rains before the sowing period are good for the sowing prospects that start in October. Temperatures during the winter season are important for the growth of the crop. A cool climate is good for the crop growth. Excessive rains can however damage the standing crop also. Exports too pick up during the winter season in November-December (before the Christmas holidays) from US and the EU countries, which support the prices to some extent. However, during this critical period of sowing, growth and harvesting stage, it is the weather factor that remains very critical in determining the sowing area, the productivity of the crop and hence the overall production prospect for the crop. Any major variation in production prospects could have a long term impact on the price for the commodity.

12 LATEST REPORTS Fundamentals Price for Jeera has cooled down even since it touched a high level of in January this year. Delayed sowing due to delayed arrival of Monsoon last year and fall in productivity due to adverse weather conditions during the growth stage have resulted in apprehensions of a fall in production by more than 20%. The sowing area has reportedly fallen by 25-30% due to late Monsoon rains. Lack of strong demand on the export front have kept prices under check as also the high arrivals of the new crop which is still continuing as delayed harvesting has been there this year. New crop arrivals in the month of March were on the higher side and that kept pressure on the market rates. Exports and domestic demand have also remained low keeping further pressure on the prices. However, overall strong Fundamental factors prevailed for the commodity. Delayed arrivals of rains last year lowered the sowing area. As per Govt reports, in Gujarat, normal area is approximately 3.88 lakh ha. Till , only 2.64 lakh ha have sown as compared to 4.54 lakh ha last year. Sowing area during current year is likely to go down in Gujarat and Rajasthan due to lower price as compared to Coriander. Area has shifted to Coriander and Fenugreek seed. Cumin output is expected to fall steeply in Gujarat this year. Output was 3.46 lakh tons in the state last year but may fall this year as acreage is slashed by 42%. However, yield is expected to improve after the rainfall that the state received recently. Still, there is less probability of the output to cross 2 lakh tonnes. On top of that are the recent unseasonal rains in Gujarat and Rajasthan, which created apprehensions of crop damage and further fall in crop productivity. Latest report from Spice Board of India indicates pickup in exports during April-Dec 2014 period at 1.28 lakh tonnes (up from 1.00 lakh tonnes in April-Dec 2013) a rise of 28% in Quantity and 8% in value. Targeted Export for period is 1.00 lakh tonnes. With Indian produce being of superior quality, they fetch a premium w.r.t. International market. Adverse reports from International producers would be beneficial for the Indian markets in the long term. The exports have already started rising and further rise in exports are expected in coming weeks for the new crop. As crop arrivals slow down, a rise in export and Festive season domestic demand are expected to support prices in the near term. Fall in production and lack of stocks in the International markets would also ensure prices remain firm in the medium to long term. Technicals NCDEX Jeera August contract S S R R