Low demand checks nutmeg rally

Poor demand from upcountry markets coupled with the rise in imports have hindered the much expected rally in the nutmeg and mace market.

Though the prices of nutmeg and mace have appreciated slightly, the market is expecting a sharp rise this month as there is a serious shortage of the spice in the domestic market.

Prices of shelled nutmeg are quoting in the Rs 135-140 range, up by Rs 5-10 a kg against last month, while those of unshelled nut are quoting around Rs 260, up by Rs 10. Prices of the best quality red mace, which is rare in the market, is stable at Rs 460-470, while that of mace (yellow) is at Rs 420-430. The traders were expecting a price tag above Rs 500 for red mace and Rs 300 for unshelled nutmeg.

Leading stockists said that poor demand from the upcountry markets was holding back the rally. A major portion of the domestic demand is being met by imported stuff, especially for extraction purposes, from countries such as Sri Lanka and Indonesia.

However, Kochi-based exporters said that the imports were not in high quantities as overseas prices for best quality nutmeg were almost on par or slightly higher than those in India. They said that export quality un-shelled nutmeg was quoting at Rs 285 a kg in the domestic market ($ 7215 per tonne), but even at that tag stockists and growers were reluctant to sell.

As the next crop season will commence only mid-May, growers and stockists are still expecting a good rally in March and April. They expect Rs 300 plus for farm grade nutmeg (un-shelled) and Rs 500 plus for best quality mace.

Meanwhile, the country's export has dropped to 1,100 tonne, down by 24 per cent during April-December period of 2007 as against 1,455 tonnes in the same period of 2006.

The drop was mainly due to higher price tags than other producing nations.