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Cumin prices are likely to soar by up to 30-35 percent to touch a five-year high of Rs 165-170 per kg in the 2021-2022 crop season following a decline in production, low acreage and damage to the crop due to excess rainfall, according to a report.
Cumin appears set to take the centre stage as a sharp decline in production in crop season 2021-22 (November-May) drives up its prices to a five-year high, CRISIL Research said in a report.
CRISIL estimates cumin prices to shoot up 30-35 percent to touch a five-year high of Rs 165-170 per kg in the Rabi season 2021-2022.
Cumin acreage also fell by an estimated 21 percent year-on-year to 9.83 lakh hectare during Rabi season 2021-2022, it said.
The acreage has declined by 22 percent in Gujarat and by 20 percent in Rajasthan, the two major cumin-producing states.
According to the report, the decline in acreage is due to farmers shifting to mustard and gram crops, which witnessed a surge in prices.
During the cumin sowing period (October-December 2021), mustard prices jumped 43 percent year-on-year to Rs 74 per kg and gram prices increased 35 percent, making these more attractive, it added.
The report revealed that cumin prices have been falling since 2018, in fact, prices plummeted in 2020 and 2021 (up to August), which might have been another reason for deterring farmers from taking up the cumin crop.
Further, the report said adverse climatic conditions in these two states deterred proper seed filling, resulting in an estimated yield decline of 20 percent in Gujarat and 15 percent in Rajasthan.
Cumin is sensitive to water and excess moisture in soil leads to diseases such as wilt and excess rainfall in the key cumin belts of Dwarka, Banaskantha and Kutch in Gujarat, and Jodhpur and Nagaur in Rajasthan increased the probability of wilt attack, preventing farmers from sowing the crop, the report stated.
Thus, the total cumin output is estimated to have declined 35 percent year-on-year to 5,580 lakh tonne in 2022, it said, adding that farmers, therefore, are set to reap lucrative realisations this year.
Meanwhile, the exports declined 24 percent year-on-year in fiscal 2022 (April 2021-February 2022) after trending up between fiscals 2018 and 2021, owing to 51 percent drop in shipments to China (accounts for one-third of the total exports) following a pesticide residue issue in Indian consignments.
Given that production has likely declined by a significant 35 percent, exports too are expected to fall this fiscal, the report added.
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