A sharp decline in production in crop season 2021-22 that began in November is set to drives up cumin prices to a five-year high, says a research report released by ratings agency .

Cumin is the second-most popular spice in the world after black pepper.

A crop native to Egypt’s Nile valley and the Eastern Mediterranean, it is now largely produced in four countries — India, Syria, Turkey, and the United Arab Emirates (UAE).

Today, India accounts for ~70% of the world’s cumin production and is also the largest exporter (30-35% of its production). A shortfall in the country’s output is therefore bound to send up prices globally, too.

“Cumin acreage fell an estimated 21% on-year to ~9.83 lakh hectare during rabi season 2021-2022. Acreage likely declined 22% on-year in Gujarat and 20% on-year in Rajasthan,” said Crisil.

Adverse climatic conditions in the two states deterred proper seed filling, resulting in an estimated yield decline of ~20% on-year in Gujarat and ~15% on-year in Rajasthan.

Thus, total cumin output is estimated to have declined ~35% on-year to 5,580 lakh tonne in 2022.

During the cumin sowing period (October-December 2021), mustard prices jumped 43% on-year to Rs 74/kg and gram prices increased ~35% on-year, making these more attractive than cumin.

Cumin prices have been falling since 2018. In fact, prices plummeted in 2020 and 2021 (up to August). This, too, deterred farmers from taking up the cumin crop.

Cumin is sensitive to water and excess moisture in soil leads to diseases such as wilt. 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.

“After trending up between fiscals 2018 and 2021, cumin exports declined ~24% on-year in fiscal 2022 (April 2021- February 2022), owing to 51% drop in exports to China (accounts for one-third of exports) following a pesticide residue issue in Indian consignments. Given that production has likely declined by a significant ~35%, exports too are expected to fall this fiscal,” the report noted.

That apart, India does benefit from the fact that the crop harvesting calendar varies across cumin cultivating countries. In India, cumin is grown as a rabi crop — sown during October to December and harvested between February and April. It is able to fill the void created by other countries’ lean season.

“The shortfall in supply is expected to send cumin prices soaring this year.

Unjha mandi in Gujarat, which accounts for ~40% of India’s cumin arrivals, witnessed a 60% on-year decline in arrivals in March 2022. While arrivals for April (1st – 23rd) show ~38% increase on-year, it is on a low base of last year where there were no arrivals in the second half of April amid the pandemic.Consequently, prices in the mandi jumped 47% and 72% on-year in March and April (1st – 23rd), respectively.

Prices in Unjha mandi have been increasing from Rs 180 per kg levels in March to about Rs 215 per kg this month,” said Crisil.

Fall in exports will put pressure on global price as well. Short supply from India, higher prices in Turkey and estimated lower production in Syria will support the bullish trend. “As on April 23, 2022, cumin prices in the international markets were up ~50% on-year at €2.34/ kg on average,” Sao Crisil.

CRISIL estimates cumin prices to shoot up 30-35% on-year to touch a five-year high of Rs 165-170/ kg in rabi season 2021-2022. Cumin farmers, therefore, are set to reap lucrative realisations this year.