Dried ginger trade on wane as prices zoom

A spurt in prices of ginger has resulted in a dull trading in the current week with the demand for the commodity on the downhill "� in the domestic as well as in the overseas market. The price of the best quality dried ginger has appreciated by Rs 1,000 a quintal at Rs 5,500, which had been hovering around Rs 4,000-4,500 six weeks ago. Market observers view this as a correction, as trading is almost at the fag end of the season now.

An increase in stock position in the upcountry market slowed down the demand to a certain extent. But of late supply has been hindered as the rainy season has arrived in ginger-producing areas, hence the spurt in its prices.

A local trader said markets would see buying interest only by July, as there would be seasonal demand from north India and he expected further appreciation in prices then.

As far as India is concerned, exports market, too, is currently not active with the arrival of ginger from China, Nigeria and Ethiopia in global markets. China has lowered its price tag to $1,200 a tonne from $1,250 a month ago, while India has lowered the price to $1,190. But, in exports, Nigeria is the real threat to India and China, as its exporters are now offering ginger at just $1,050, following the last week hike of Rs 100. Ethiopia is also offering ginger at a lower level of $1,100 to importing nations showing interest in Nigerian market.

While bumper crop in this season has helped Nigeria in slashing its ginger prices to the lowest level, China is also active in various global markets. Even domestic oleoresin and oil manufacturers are interested in importing Nigeria stuff, thanks to its rich oil content and considerably lower tariff. In fact, 70 per cent of their total import of 413 tonne of ginger during the January-March 2006 period was from Nigeria.

During the period, India exported 518 tonne, with the highest export amount at 218 tonne was in February. It is estimated that total production in India has maintained the same level of 15,000 tonne as in 2005 season, though the production of green ginger has been estimated at 80,000 tonne, up 30-40 per cent from the last season output.

The steep fall in prices of dried ginger compared with the last season, when the prices had increased to Rs 15,000 a quintal, has endured the steady performance in production, according to market experts.