Ginger prices are firming up with supply tightening in the domestic market, traders said. Export orders and increased demand from upcountry market is likely to take the prices higher by 20% in the days to come. Dry ginger is retailing at Rs 62 per kg at the terminal market of Kochi as against Rs 50, two weeks ago.
Traders and exporters are covering in anticipation of a shortage in crop, which is expected in November, Ramalingam Vishwanath of GRK told FE. “Hardly 15,000 bags of ginger is available in the Kochi market, leading to a supply crunch,” he said.
The demand exceeded the arrival by almost 2,000 bags in August, Anand Kishore of Kishore Spices said. In the last one year, supply has dropped by 25,000 bags (one bag is of 50 kg), when compared to the previous year, he said. During October 2005 and September 2006, 95,106 bags of ginger arrived at the terminal market as against 70,000 during October 2006 to August 2007, Anand said. The unit realisation has also moved up considerably, he added. Heavy monsoon rains have damaged the new crop and the production is likely to be low, he said. Ginger farming area has decreased in the past two years because of low prices.
Ginger prices had touched a peak of Rs 50 per kg (of fresh farm grade ginger) in 2003 and then dropped to a low of Rs 6-8 per kg in 2006.
Traders believe that exports are also likely to pick up with reports of production shortage in China. Saudi Arabia is the major market for dry ginger and exports to the country has been increasing .The nation exported 2,500 tonne of the commodity during the first quarter of the present fiscal.