Nutmeg soars on supply crunch

A huge dip in supply has caused nutmeg prices to rise in the domestic market in the recent weeks. Unshelled nutmeg has appreciated by Rs 60-70 per kg and crossed the psychological mark of Rs 300 a kg. It was expected to cross Rs 300-plus earlier, but it happened only during last week.

The average price of nutmeg touched Rs 325 a kg, while the best quality spice has been quoted in the range of Rs 340-350. But even at these high prices, the spice is not available in the market, according to Kochi-based exporters.

An exporter told Business Standard that he wanted to buy 5 tonnes of nutmeg in order to meet export commitments, but could not find the crop in the market. Price of farm gate has touched $8500 a tonne in recent weeks - it was $7215 at the beginning of February - and it has put exporters in a tight spot to procure nutmeg.

Price of shelled nutmeg is moving in the range of Rs 160-170 a kg, which was Rs 100-110 a kg four weeks ago.

Kalady-based brokers said the serious drop in production had caused a tight supply condition in the market, hence the current hype in prices. Growers said the initial crop, which known locally as 'Makarakkaya' is not available due to lower output.

There will be a delay in the next harvesting season as output from plantations will hit terminal markets only by May-end. Usually the early crop hits the market by March-April, but this time there has been heavy drop in production thanks to the prolonged monsoon.

Meanwhile, price of mace remained almost steady at Rs 420 -460 thanks to imports from Sri Lanka and Indonesia. Price of mace has been moving in a narrow range, although best quality mace is not available in the market.

Market sources said that price of nutmeg, both shelled and un-shelled, would appreciate further as supply would only be enhanced by June.

Meanwhile, exports during April-December of 2007-08 have dropped 24 per cent to 1100 tonnes and are valued at Rs 23.82 crore as against 1455 tonnes valued at Rs 29.20 crore in the same period of 2006-07.