Lack of export orders squeezes tamarind prices

M.R. Subramani Chennai | Updated on February 22, 2012 Published on February 22, 2012


Tamarind prices have dropped by about 30 per cent following higher production and lack of export orders. Besides, traders' reluctance to build inventories in the face of a declining trend has led to an overall bearish trend in the market.

“Though the crop in Tamil Nadu is only 80 per cent of its normal, it is a bounty in Andhra Pradesh, Karnataka and Chhattisgarh,” said Mr O.M.S. Raja, a tamarind dealer from Madurai.

Currently, fair average quality tamarind (seedless) is quoted at Rs 50 a kg against Rs 80 a kg in October. Fine quality is ruling at Rs 90 (Rs 120).

In markets closer to growing regions of Andhra Pradesh, unprocessed tamarind is ruling at Rs 1,100-1,500 a quintal.

This is against Rs 2,800-3,400 quoted in September when tamarind prices peaked.

Wholesale trades in Chennai are quoting Rs 85-86 a kg now against Rs 147 in October, said Mr S.N. Veerasamy, a wholesale merchant in Chennai.“During the same time last year, we got tamarind at even lower prices. The problem this time is that we are not in a position to build inventories,” he said.

A bearish trend is prevailing since the trade is expecting further fall in prices, said Mr Raja.

“There are other reasons for this trend. Last year, we exported tamarind to Malaysia and other Far-East countries since the Thailand crop was affected by floods,” he said.

“In fact, right from the beginning of last year, we began to export. But this year, no one abroad seems to be ready to buy at any rate,” said Mr Raja.

“This is affecting some farmers who had taken trees on contract from the Forest Department and State Governments based on last year's price. No one seems to be interested in buying now,” he said.

Tamarind is listed among other spices by the Spices Board and during April-December of the current fiscal, their exports were up at 28,200 tonnes fetching Rs 2,519.58 crore against 16,875 tonnes earning Rs 1,215.97 crore. Other spices also include asafoetida, cassia and saffron. However, as a single commodity tamarind exports totalled 17,500 tonnes valued at Rs 800 crore during 2010-11 against 12,200 tonnes valued at Rs 470.55 crore.

“We are not interested in building inventories since cold storages have increased the rentals to Rs 14,000 a year for 10 tonnes from Rs 11,000. Loading and unloading charges have been raised to Rs 10 from Rs 6 a bag,” said Mr Veerasamy.

As a result, now if a trader wants to move tamarind from the cold storage to his warehouse, he has to foot Rs 18 for a bag of 50 kg from Rs 12 earlier. “In these circumstances, we think it is better not to stock up tamarind,” said the Chennai wholesale trader.

Mr Raja, on the other hand, has another angle to traders' reluctance to build inventories. “In places such as Salem, Krishnagiri and Dharmapuri Customs authorities had raided cold storages on information that smuggled goods were being hidden there. This has embittered traders who sold tamarind bought at Rs 100 a kg for Rs 40,” he said.

As a result, farmers bringing tamarind are the sufferers, said Mr Raja.

“Unless the Government steps in to buy farmers, prices are set to drop another Rs 20 a kg,” he said.

According to Spices Board statistics, Tamarind production during 2008-09 was 8.92 lakh tonnes from an area of 1.94 lakh hectares against 8.26 lakh tonnes from 1.75 lakh hectares. Karnataka is the largest producer followed by Tamil Nadu.

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Published on February 22, 2012
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