Poppy seeds continue to rule firm as demand outstrips supply

G. K. Nair
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Poppy seed kept for sale
Poppy seed kept for sale

Poppy seeds prices continued to rule firm above Rs 400 a kg as the demand outstripped supply in recent weeks following sharp fall in output in all the growing countries.

Prices at present in the domestic market were ruling at Rs 375-440 depending upon the quality and colour of the commodity, upcountry market sources told Business Line.

Good quality material is very limited in volume. Quality of the new crop in India is reportedly poor. Fresh import cost is high at more than Rs 440 and, hence, all importers are buying locally.

If the present continued the prices might cross Rs 500”, market sources said.

Validity of the existing import permits is over and the next permits would be issued in June-July. This time norms are expected to be strict, they said. For the next four months no cargo is going to come from overseas, they claimed.

The Indian production this year is estimated at around 3,000 tonnes and the colour of the produce is not good also. Therefore, prices of the pure white poppy seeds are likely to shoot up to the range of Rs 500-600, they said.

Some Delhi-based major dealers said to have bought good quantity of the indigenously grown produce at Rs 380. The farmers are reportedly not releasing their produce now anticipating rise in the prices.

In the international markets the prices prevailing, at present, are at $5,800-6,000 a tonne and there are said to be very few sellers. All business are reportedly “on cash-and-carry deals as the markets kept on rising every hour due to huge shortages”, they said.

Indian annual requirement is estimated at 35,000-40,000 tonnes.

Consequently, India’s dependence on imported poppy seeds is on the rise and during the fiscal 2011-12 the country's imports stood at 24,075 tonnes of poppy seeds valued at Rs 268.48 crore as against 9,050 tonnes valued at Rs 127.64 crore the previous fiscal, according to official sources.

India produced 18,374 tonnes of poppy seeds in 2012 and as against this it is estimated to be around 4,400 tonnes in 2013 following reduction in area. Availability, according to the trade, during the period from May 2012 to Apr 2013 is estimated at 10,576 tonnes.

The Indian Narcotic Control Board (NCB), Gwalior is said to have granted permits for cultivating in 5,700 hectares (ha) only this year as against 24,000 ha last year.

Indian exports of alkaloids are to US, Europe and Japan. During 2010-11, the country exported 1,500 tonnes of it to the US, where as in 2012-13 US would purchase only 500 tonnes. Similarly Japan also has reduced purchase from India from1,200 tonnes to only 400 tonnes, they said.

Given the “reduction in sales of opium alkaloids during the years 2012-2013 and also 2013-2014, the NCB has reduced cultivation ‘Patta by 80 per cent’. While pattas for cultivation of poppy in 2011-2012 were for 24,000 hectares, it is now reduced to 5,700 ha in 2012-2013 and 2013-2014; only 20 per cent of last year”, trade sources said.

Sharp reduction in growing areas world over by the Narcotic Control authorities would reduce the production significantly and that in turn will push the prices to historically higher levels in 2013, they pointed out.

(This article was published on March 8, 2013)
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