The swanky new shops and hotels that line the border town of Sulthan Bathery in Kerala reek of ginger money. Ginger farming has become a great inspiration for small farmers like Reby Paul, who dream of being a part of the new gold rush. From an obscure commodity that brought little returns and offered grave risks, investing in ginger has brought huge returns to some farmers who ventured into neighbouring Karnataka from early 2000 to farm ginger.
?Some farmers have earned phenomenal profits from ginger. From a low of R38 per kg for dry ginger during most part of the 1990s, it touched R267 per kg during 2010. People who invested in ginger have got 20-25 times their investment. Normally, farmers break even when they earn 12-14 times their investment in seeds,? Krishnakumar K Bhammer, a leading ginger trader and exporter, said.
?Many small farmers earned big money from ginger. They risked going to Hassan and other neighbouring districts and earned a lot. Every farmers in Wayanad dreams of earning such money,? Paul, a farmer from Karivellikunnu near Sulthan Bathery, said. A global shortfall in ginger production is a major reason for the huge increase in ginger prices, Krishnakumar said. ?During the last three years ginger prices have soared due to lower production in China and Nigeria. Demand is also seen increasing rapidly,? he added. India produces 2.75 lakh tonne of ginger per annum, almost a third of the world?s production of 8.35 lakh tonne. The major consumers of the commodity are the US, UK, Japan and Saudi Arabia.?
The emergence of China in the global market has altered the dynamics of ginger trade as Chinese farmers manage to keep input costs low. From 1975 through the 80s India was the major producer of ginger with a share of 30-35% of world production. China followed with a share of 10-15%. In the later part of the 1990s, Chinese production of ginger increased dramatically and the Indian share fell. Some old producers in Africa have given up ginger production due to its labour-intensive nature while a clutch of new producers, like Indonesia, are into big time ginger production.
?Farmers from Kerala ventured into Karnataka from 2003 in huge numbers to reap a windfall. When prices came tumbling down, many lost their investments and farming area dropped. Now, they are back in business,? KS Mohanan, a leading trader from Wayanad said. Leasing land in Karnataka is back in favour with returns on the higher side. Mohanan feels that Karnataka farmers have also taken into ginger production on their own. Good returns have prompted Kerala farmers to lease more land for ginger in Karnataka. The returns have more than doubled in the last one year and more and more entrepreneurs are looking at ginger farming as a lucrative option. Currently, Coorg in Karnataka is the hub of ginger production with land leases increasing substantially in Hassan district and its neighbouring areas. Kerala is still?the major producer of fresh and dry ginger?but states like Karnataka, Andhra Pradesh and Sikkim are catching up.
India is at a disadvantage compared to countries like China due to low productivity. Indian exports as a percentage of its production has been decreasing steadily over the years. In 1970-71, India exported 3.156 tonne ginger which was 10.67% of the production. During 1977-78, it increased to 9,762 tonne, which was 13.62% of the production. The best performance was recorded in 1978-79, when 14,515 tonne of ginger?almost one-fifth (19.17%) of the total production was exported. During the 1980s, exports began to decline steadily to less than 10% and by the beginning of this decade, exports fell to less than 5% of the production.
Demand for fresh ginger has increased substantially in the domestic market. Volume of fresh ginger transported to north India has increased dramatically, a trader from Wayanad said. Entry of big retailers and refrigeration facilities has meant increased demand for fresh ginger.
Krishnakumar feels that ginger prices are determined by global supply. ?Ginger has a four year commodity cycle. Farmers move in when prices are at a high and they move out when it drops down due to oversupply,? he said, and added that it is unlikely to fall below R90 due to the increasing cost and robust demand. Imported ginger from China, Nigeria and Ethiopia also depresses?Indian market when supply in the global market is good. Traders also allege that most of the imported ginger is sold at a discount.