The Dhaniya futures contract traded on the NCDEX declined sharply last week. The most active April-month futures contract started the week on a negative note, extending its third week of consecutive fall.

A strong selling pressure prevailed as increasing supplies of fresh crop in the spot market amid a dull demand scenario weighed on prices of the futures contract. The Dhaniya futures contract touched a fresh four-month low of ₹6,911/quintal before closing the week at ₹6,918/quintal, losing 6.1 per cent from its previous week’s close.

The major markets of Rajasthan such as Kota, Ramaganj mandi and Baran remained closed during the week due to labour strike; this further induced negativity on price of the futures contract.

Dhaniya production in the current season is expected to be more or less the same as last year because the drop in acreage in Rajasthan is compensated by the record sowing in Gujarat. As per the latest data, sowing in Gujarat was at 1,21,100 hectare, higher by 32,500 hectares than last year. The export target for 2016-17 was at 40,000 tonnes while the exported volume in the first half was at 16,950 tonnes, lower by 5,409 tonnes y-o-y. Going by the current export demand, it is unlikely that the target for 2016-17 will be reached.

Outlook Dhaniya futures are expected to remain under pressure in the upcoming week. However, some recovery in prices is expected from the current low levels as prices have lost over 19 per cent in the last nine weeks.

The writer is Head-Commodity Research, Karvy Comtrade

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