Agri Business

Ginger loses flavour with low output, high price

Shobha Roy Kolkata | Updated on February 24, 2020

Indian ginger is far costlier than Nigerian ginger   -  VAIDYA

Lower production and higher prices may come in the way of India grabbing a significant chunk of the global ginger market, especially when the coronavirus (Covid-19) outbreak in China is likely to impact exports.

India is the largest producer of ginger in the world with an annual production of 1.5-2 million tonnes. China, with an annual production of 1-1.5 mt, dominates the global ginger market. World production of ginger is estimated at 4-5 mt. Nigeria produces about 0.5-1 mt while Indonesia produces about 0.5 mt.

According to Anand Kishor Kuruwa, President of the India Pepper and Spice Trade Association (IPSTA), the country’s production of fresh ginger is expected to be down by nearly 30 per cent this year as compared to last year.

“India has had two consecutive years of flood so we hardly have 50,000 bags (one bag holds 50 kg) of dried ginger as carry forward this year; last year, we had 2 lakh bags of carry forward of dried ginger. Lower carry forward stock and the estimated drop in production this year have pushed up ginger prices in India,” Kuruwa told BusinessLine.

Raw ginger prices are ruling at ₹45-52 a kg at present, almost 136 per cent higher than ₹17-22 a kg, the same time last year.

Nearly 10 per cent of India’s production of 1.5-2 mt is converted into dry ginger, which is estimated to be close to 1.9 lakh tonne. A large share of dry ginger is exported. This year, however, the conversion of fresh ginger to dry ginger is also expected to be much lower, at 57,000-60,000 tonnes. This is because of a “very high demand and comparatively higher sales” of raw ginger.

The global market for dried ginger (crushed or ground) is estimated at $442 million and China holds the majority share of it.

Enquiries pouring in

Some of the ginger traders and exporters BusinessLine spoke to confirmed getting more enquiries from markets such as Germany, Russia and Qatar this year in the wake of an estimated lower production of fresh ginger in China and the recent Covid-19 outbreak. However, they also pointed out that higher prices were acting as a deterrent to shore up exports to these markets.

“We usually get enquiries for ginger from Bangladesh and Saudi Arabia, but this time around we are getting enquiries from some of the European countries and the US,” said Syed Zaffar, sales co-ordinator at Karnataka-based Sagar Ginger Traders.

According to Sunil Lotankar, proprietor of Maharashtra-based Shree Samarth Krupa Agency, a trader in fruits and vegetables, the greater demand from some of these buyer markets is pushing up the prices of Indian ginger.

A senior representative of Mizoram-based Zoram Mega Food Park felt that the slowdown in exports from China could be used as an opportunity to “build new bridges”, particularly between these buyer countries and the north-eastern markets such as Sikkim, Mizoram, Nagaland and Meghalaya, which have a reasonably good share in ginger production.

Alternative markets

The high price of the rhizome in India is, however, pushing buyer markets to move towards Nigeria and Indonesia, where prices are comparatively lower.

Nigerian prices, which were close to $1,100-1300 a tonne last year, are currently hovering at around $1,700-1,900 a tonne but it is still lower than the price of Indian ginger, which is currently ruling at $3,0-3,800 a tonne (as compared to $2,500-2,800 a tonne last year).

“Unfortunately our raw ginger prices are so high and the prices of Nigeria are so competitive that Nigeria is going to be the source which is going to be benefited from the problem in China, not India. India will be net importer and we will also be importing from Nigeria,” Kuruwa said.

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Published on February 25, 2020
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