Ginger prices are on an uptrend on short supply, while the demand continues to be strong.

Prices that were ruling at Rs 65-85 a kg during the post-harvesting period during January-May have shot up to Rs 145-165 now, market sources told Business Line.

Currently, prices are gaining steeply as the next crop is delayed and is likely to be sharply lower, they said.

Many farmers had switched over to alternative crops as prices were not remunerative earlier. Consequently, the next crop is expected to be lower, they said.

Indian parity is the highest among all producing nations.

Demand is still out stripping the supply.

“Though carryover stocks of a substantial quantity are held by large investors and speculators, these stocks will not be released till their desired price levels are achieved. The situation could extend till the end of the 2013 season, they said. Raw ginger prices are ruling high and no peeling process has begun till date for the new season.

Most of the processors have stayed away from the market and prefer to hold on to their last year’s produce.

New crop of dry ginger will arrive only from March onwards for a short period till May.

Until such time, the domestic consuming centres will have to rely on existing old crop material to suffice the winter demand which starts from mid November onwards.

Imports are unlikely as with the existing duty structure it is still cheaper to buy Indian material though prices have more than doubled during the current month.

They said this year the producing belts of Kerala and Karnataka had a bumper production of raw ginger which was processed and peeled into dry ginger.

Indian prices and parity was the lowest among major producing nations such as China and Nigeria. The year witnessed good exports coupled with domestic stockists actively trading and briskly covering the huge arrivals into the terminal markets in India.

From the post-harvesting and mid-term prices ruled steady and range bound, however, during the later half and now the fag end of the season, the market started upward momentum as arrivals declined though consumption continued at a fast pace since India was the most competitive origin.

Kochi-based major ginger traders said non-remunerative prices had led to gradual disappearance of cultivation of the well known high quality ‘Cochin Ginger’.

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.

India is the largest producer of ginger in the world with over seven lakh tonnes from an area of 1,42,089 ha 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, the 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 November 25, 2012)
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