Coriander hits 2-year high on improving exports, lower production
Coriander futures crossed the Rs 7,000 level for the first time in April after two years.
During the sowing season, last October, the most active future contract was trading at 6-year low of Rs 4,200 per 100 kg, but started its upturn since then, on reports of lower acreage following irregular rains in the monsoon and suppressed prices in the last two seasons kept farmers away from sowing coriander in the country.
The main reason for lower prices was higher supplies of coriander in the country due to record production numbers in 2016-17 and 2017-18 coupled with improved imports from Russia.
Madhya Pradesh, Gujarat and Rajasthan are the main coriander producing states in the country, accounting for 85-90 per cent of production.
Last year, coriander acreage were lower by almost 30-40 per cent due to deficient monsoon rainfall in Gujarat and most parts of Rajasthan while farmers have opted for other rabi crops such as wheat, chana in rabi 2018-19 for more profits.
Meanwhile, in Madhya Pradesh the area was down only by 10 per cent, as it is traditional sowing region for coriander.
Coriander futures crossed the Rs 7,000 level for the first time in April after two years on concerns over lower production in India and other competitors such as Russia, Ukraine and Bulgaria.
Moreover, higher prices in major coriander sourcing countries during the second half of 2018 and improving demand for Indian coriander kept prices positive in 2019.
Slow start to the new season arrivals also supported prices during the peak season. Arrival for new season coriander starts from February until April. Arrivals in the current year, according to the market sources are lower by about 20-25 per cent at 1.8 lakh tonnes until March 31 compared with 2.2 lakh tonnes last year. However, the exports have been higher until January in 2018-19 season.
According to DGCIS’s latest exports data until January, country exported 35 per cent more coriander during April-January period. For the current financial year 2018-19 (Apr-Jan), coriander (both forms) exports about 41,235 tonnes compared with 30,500 tonnes last year during the same period. Coriander seed exports in the first 10 months of 2018/19 are highest ever recorded until now.
The top coriander seed export destination are Malaysia, Pakistan and the UAE. Coriander in powdered form mostly exported to South Africa, the UK and the UAE. Export prices of coriander seed increase to Rs 7,638 per quintal in January from Rs 7,000 in December.
New season coriander is first available in India as harvesting starts in February and ends in April, while in other countries -- Russia, Bulgaria, Mexico, Ukraine and China -- the new crop start hitting the world market after June.
During the current year, coriander futures jumped over 12.5 per cent year-to-date, while the average traded price on NCDEX in 2019 (Jan-Apr) are higher by at least 20 per cent compared with last year’s prices.
In 2019, market is expecting tight supply situation on account on lower production and higher export demand. New season crop other than India will arrive after July, which may pressurise domestic prices as exports may gradually slows down and finally stabilize during the second half of 2019.
We expect, coriander may trade positive towards Rs 7,300-7400 range per 100 kg (CMP: Rs 7,080) in next 1-2 months on robust export demand and diminishing supplies.
However, going forward, the prices may take directions depending on production outlooks from Russia, Ukraine and Bulgaria. Domestic production will be sufficient for consumption within the country so the exports in the second half will determine the prices.