Saffron prices soar 150% in a year

Despite a 50 per cent estimated growth in output, prices show no signs of softening.

Saffron prices are showing no signs of softening despite expectations of a good crop this season. Prices are ruling around Rs 1.15 lakh a kg against last year's price of Rs 45,000, a jump of over 150 per cent owing to a drop in production in India and Iran.

The country produces 15-20 tonnes of saffron every year. However, in 2006-07, the output dropped to 10 tonnes. In Iran, the production was around 150 tonnes against the average annual crop of 200 tonnes.

Anticipating a better crop this year, estimated at between 15 tonnes and 20 tonnes, the prices came down to Rs 90,000 a kg level a couple of weeks ago. But renewed demand from ayurveda pharmacies, sweet and gutka makers pushed the prices up again. A trader in Mumbai market said, "Since there is virtually no carry-over stocks left, prices are going up on new demand." He said that apart from traditional buyers, the demand from cosmetic industry had also gone up.

The traders said at the current price level, it was difficult to retain stocks, and higher prices meant more adulteration. Imports of the commodity is also difficult as quality remains a major issue with buyers. Besides, the customs department suspects that a cheaper and adulterated version of the commodity is being imported in the pretext of saffron to transfer unaccounted money. Kashmir kesar (saffron), which comes in two varieties (Lacha and Mogra), is considered superior to Iranian kesar. Lachha kesar was at Rs 95,000 per kg and mogra kesar stood at Rs 115,000 per kg last week.

Over the last few days, fresh arrivals from Kashmir have stopped as the region is cut-off from other parts of the country due to heavy snow fall.

Traders also mix Iranian kesar with Kashmir kesar to bring prices down. There are different varieties of Iranian kesar and their prices vary accordingly.

Kesar adulteration is not something new in the country. Earlier, maize fibres were mixed with kesar. These days butter paper is also mixed with kesar using some thickening agents and perfumes. Most of the laboratories in the country are not equipped to check the quality of kesar. The reports given by labs only mention that a sample has failed the quality test. According to traders, lab reports should reflect the fact that they are adulterated.