Output surge to keep ginger prices low

Prices of wet ginger are set to come under pressure amid high output estimates, following favourable monsoon and no loss in acreage.

Although absolute production and acreage are unknown at present, Yogesh Mehta of the Indian Spices & Foodstuffs Export Association feels that the acreage under ginger cultivation has not declined.

The prices of wet ginger are currently quoted between Rs 1,200 and Rs 1,300 a quintal and orders for exports are being booked at Rs 1,200-1,300 a quintal for January shipment.

With the supply of new crop, the prices are expected to decline further to Rs 1,100 in a month.

The prices of wet ginger have moved dramatically in the last one year. Around last December, the spice was quoting at an all-time high at Rs 2,400 a quintal from the present Rs 1,200-1,300.

The prices were in the range of Rs 1,400 in May and June this year, rising to Rs 1,700 in August, dropping to Rs 1,650 in September. Since September, they are on a decline.

"Our price movement depends upon China and Nigeria. If they reduce the supply, our demand goes up," Mehta added.

China and Nigeria have started quoting at lower-than-expected prices with the former pricing the spice at $1,150 a tonne and the latter booking orders in the range of $800-900 a tonne. India remained unmatched with the country quoting its exports at $1,200 a tonne.

"India has lost the European ginger export market to China and Nigeria over the issue of quality. Imported ginger from China turns into a whitish powder when crushed, while the Indian ginger turns creamy. Even if wet ginger is washed with permitted quantity of sulphur dioxide, the colour of powder remains the same. So, ginger exports from India have not found place on the European traders' list," Mehta said.

The country exported 5,000 tonne of wet ginger this year up to October as compared with 2,850 tonne during the same period last year. The domestic demand for wet ginger accounts for 4 lakh tonne per annum, which is entirely met through the domestic output.

The country exports roughly 6,000 tonne to the Gulf countries and the USA. A tonne of dry ginger can be produced from every 5 tonne of wet ginger.

The supply of this three-month crop starts during late November and early December. Kerala, Andhra Pradesh, Tamil Nadu and Karnataka are the leading producers of ginger in the country.