Improving exports, deficient rains to support coriander in coming months

Riteshkumar Sahu

Coriander futures jumped to 8-month high on concern over lower production in the coming season amid deficient rains in Gujarat and

Rajasthan coupled with improving exports from the country.

It has surged more than 17 percent in October until now and heading for the highest monthly gain in more than 1 year. Earlier in the year,

prices sink to its lowest level since Dec 2012 at 4,126 rupees per 100 kg in June 2018.

Since attaining its highest price of 13,444 levels in June 2016, the prices have fallen more than 221 percent on the National Commodities and
Derivative Exchange (NCDEX) on rising stock levels in the country due to good productions, the constant increase in imports from Russia and

Ukraine and diminishing exports over the years.

In the current calendar year, coriander Futures on NCDEX surged 39 percent or Rs. 1,600 per 100 kg from its low levels (in June 2018) to

currently trade at Rs. 5,730 per 100 kg. Currently, it is trading 12.8% higher on the year.

After June lows, the prices have constantly on the rise and expected to increase further in coming months. The production in Rajasthan was
down almost 15 percent last year (2017/18) to 1.85 lakh tonnes because of decline in acreage as farmers shifting to other crops because of

low prices of coriander during the sowing season.

In October 2017, prices hit a near five-year low of 4,272 rupees per 100 kg because of record production in previous two years and higher

imports.

Rajasthan is the largest producer of coriander in the country followed by Madhya Pradesh and Gujarat. Due to lower acreage in Rajasthan,
Madhya Pradesh and Gujarat, Department of Agriculture, Cooperation and Farmers Welfare (Horticulture Division) in its 3rd advance estimate
for 2017/18, pegged the total production of coriander seed at 8.61 lakh tonnes (lt), down 6.7 percent as compared to 2nd estimate and 2.5%

lower from previous production.

According to Agmarknet, the arrivals of coriander seed in the country during since the start of the new season is down by 13 percent on year

to 3.87 lakh tonnes in 2018 compared to 4.50 lt in 2017.

Moreover, the stocks of coriander in NCDEX warehouses across Gujarat and Rajasthan dropped by 47 percent in October compared to average
stocks of the previous three months. The average stock levels during July to September was close to 24,400 tonnes, which is now down to

12,300 tonnes as on 18th October.

The imports of coriander seed were on the rise earlier. In 2013/14, India imported only 5,290 tonnes of coriander seed but the volume
increase to more than 45,800 tonnes in 2016/17. On the other hand, exports slipped about 31.7% during the same time. In 2016/17,

coriander imported were higher than the exports from the country.

However, in the last financial year as well as in the current financial year the exports have been higher than the imports. Coriander exports up

by over 25% in 2018/19 for Apr-Aug period on the year, which is encouraging signs for prices.

Coriander is a rabi crop and monsoon season rains in Rajasthan and Gujarat have an impact on the crop production. A per the data from
Indian Meteorological Department (IMD), the major coriander-growing region in Rajasthan i.e the Kota region received normal rains but

Saurashtra region in Gujarat got deficient rains, which will impact production in the next season.

Going forward, coriander prices in futures may trade positive towards 6,500 rupees per 100 kgs (CMP: 5,730) on the expectation of improving

exports demand and a possible decrease in sowing areas in Rajasthan and Gujarat in coming rabi season.

Moreover, the decrease in stocks levels with the traders will also support coriander prices during the next few months.

Disclaimer: The author is a Research Analysts - Agri- Commodities, Angel Broking Ltd. The views and investment tips expressed by
investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.