Ginger prices soared on short-supply even as demand for raw ginger continued to remain strong.

Raw ginger prices touched Rs 3,800 for 60-kg bag, a record, against Rs 3,600 a bag in 2011, P.V. Eliyas, a ginger grower and trader in Kerala's Wayanad district told Business Line.

Due to unremunerative prices last year on over production, growers gave up cultivation this year and consequently, the total output is only one-third of the demand.

“Around 1,500 – 2,000 tonnes of raw ginger are usually moved out on a daily basis to various markets in South and West from Karnataka and Kerala. Currently, we are only able to send only one-third of it for want of material,” he said.

Eliyas said that if last year one lakh acres were planted with ginger, in the current season the acreage is only 25,000 acres.

Many farmers gave up cultivation in the absence of remunerative prices, on the one hand, and high investment, on the other. According to him, for cultivating ginger in one acre an investment of around Rs 3.5 lakh is needed. All inputs cost have increased significantly. The yield per acre on an average works out to 300 bags of 60 kg, i.e., 18 tonnes, he said.

Dry ginger

High raw ginger prices have made dry ginger conversion uneconomical, dealers here said. The recovery rate of dry ginger when raw ginger is dried is 30-35 per cent. Currently, dry ginger prices are in the range of Rs 130-140 a kg. Raw ginger price, on the other hand, ranges between Rs 63 and Rs 65 a kg and at this range the cost of one kg of dry ginger would be between Rs 189 and Rs 195 a kg, they said.

Growers, therefore, are not making dry ginger. Similarly, primary market dealers are also not venturing into making it.

New crop of dry ginger used to arrive in quantum from March onwards for a short period till May and that has not happened so far this year.

Indian prices and parity were lowest among all major producing nations, China and Nigeria.

Speculation is that there could be further upward movement in prices as conversion cost of raw ginger to dry ginger is still not remunerative enough for the processors to begin peeling.

Cochin ginger

Kochi-based ginger traders said that uneconomical prices have led to gradual disappearance of cultivation of the well-known high quality “Cochin Ginger” popular in the international spice markets.

Cochin ginger is considered as one of the best in the world market because of “its characteristic lemon like flavour” and the absence of fibre content, export sources said. It is usually traded at a premium, as this unique variety has low fibre content, special aroma, and pungency.

Apart from this variety a high oil content ginger was also grown in the high ranges in the State’s Idukki District, popularly known as “Ellakalan”, cultivated in and around Rajkumari, Kunjithanni areas.

However, ever since the extraction units in the country, which were mainly consuming this high oil content variety, had switched over to imported low oil content but cheap Nigerian/Ethiopian Ginger, cultivation of this variety has slowly vanished, they alleged.

India is the largest producer of ginger in the world with over 7 lakh tonnes from an area of 1,42,089 hectares in 2009-10. However, in terms of area Nigeria and China are on top.

The main overseas markets of the commodity are Australia, Pakistan, Bangladesh, Saudi Arabia, Yemen, UAE, Morocco, Canada, the Netherlands, Japan, the UK and the US.

It is estimated that annually around 1.6 million tonnes of ginger is produced all over the world. India and China contribute almost 50 per cent of world ginger production.

(This article was published on April 5, 2013)
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