Dynamics of Spot and Futures market prices of Cumin in India
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Date
2013
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Journal ISSN
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Publisher
UAS, Dharwad
Abstract
Cumin has commonly known as Jeera. This is one of the most important spice grown
in India. The results revealed that growth rate in area under cumin was found to be positive,
while production also showed increasing growth due to increased productivity.. With this
backdrop the present study was undertaken by collecting monthly prices of cumin in major
cumin markets (Gujarat and Rajasthan) of India for a period of 21 years (1991-92 to 2011-
12). The futures prices for cumin seed was also collected for the same period. The growth
rate analysis revealed that production growth rate is highly significant. Hence, there is need to
evolve some varieties with stable or sustained productivity in order to meet future demand.
An increasing trend in prices was observed in all the markets, but the quantum of increase
varied from one market to another. Price of cumin was found to be highest during off season
and lowest during harvest season. The higher monthly seasonal indices of prices were
observed during September to October and lower during the months of March and April.
Hence, the farmers should be educated to plan their marketing particularly in these months.
Forecasting analysis was employed to quantify the variation in prices and also to forecast
cumin seed prices. The forecasted prices in all the markets showed an increasing value. Cointegration
analysis between spot and futures prices for cumin seed showed high cointegration
between markets. Hence, cumin economy should take this advantage to encourage
the production of cumin. The analysis revealed that, storing cumin and selling of it during off
season would help the producer in getting higher returns. Finally it was recommended to
disseminate the forecasted prices to farmers for their advantage.