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European spice dealers challenge price falls in Indian cumin seed

Indian cumin seed sources have reported instances of prices easing in recent weeks and have forecast further slides ahead on a lack of domestic and international demand.

European traders are less convinced on the potential for additional price falls and feel that the main downtrend of late has been on prices on the National Commodity & Derivatives Exchange (NCDEX) rather than on the physicals side.

Yashodhan Shah, managing director of Virdhara International, a spices manufacturer and exporter, said Indian cumin seed prices are consistently coming down. In a September 8 market report posted on LinkedIn, Shah said that prices of European quality cumin seed had fallen by USD70 per tonne compared with those of week 33.

Prices of Singapore quality cumin seed were said to have reduced by USD90/tonne from levels of week 33.

“Still prices are expected to go further low because of lack of international and domestic demand,” Shah added.

One UK seeds and spices trader said his contacts in India were reporting that demand has been low from the NCDEX, but physicals sales had remained high. On NCDEX sales had been running about 25% of those at the same time last year.

One of the reasons for this sharp fall in exchange volumes is the scandal that arose over speculative trades. This led to the arrest early this year of certain individuals who were found to be manipulating markets to their own ends.

The trader said that price falls on the physicals side had been in a range of 3% to 5%.

Pesticide guarantees

Andrew Barker, managing director of PBA Brokerage, noted that the Indian cumin seed sector has two distinct markets, the one being for material that does not carry guarantees on minimum pesticide residue and the other on that which is guaranteed.  The price differential between these can be as much as USD1,000/tonne.

Prices on the NCDEX are for the “bulk standard” Indian cumin seed, meaning that not carrying any pesticide residue guarantees.

“So that has eased down recently. However, the price for Indian cumin seed with pesticide guarantees has not eased down at all. It is around USD2,700 per tonne,” Barker said.

Good rains have raised expectations for better crops for all those due to be planted after Diwali in October.

The UK trader quoted bold, heavy Indian cumin seed at USD2,175-2,200 per tonne c&f European main ports (EMP).  Standard European quality was at USD2,125/tonne c&f EMP. Both products carry guarantees as within the EU limits on pesticide residues.

Singapore quality would be around USD2,025/tonne c&f. This quality is not checked for pesticide residues.

The UK trader added that a lot more Indian producers were involved in integrated pest management systems and therefore able to meet EU requirements on pesticide residues.

Barker added that Syrian cumin seed is currently being offered at around USD2,750/tonne c&f with pesticide guarantees for the EU and US.

He viewed current demand as slack and supply as favourable, with India gearing itself up for European demand.

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