With ginger prices riding high on supply shortage, farmers in Karnataka and Kerala are back to ginger farming in a big way, traders said.
However, a section of traders feel that price could rally north for one more season, from the current high, as ginger seeds are short in supply. Ginger farming area has come down to almost a half following a slump in returns in the last two years.
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.
?Farmers from Kerala ventured into the neighbouring Karnataka from 2003 in huge numbers to reap a windfall. When prices came tumbling down, many lost their investments and farming area dropped down. Now, they are back in business,? KS Mohanan, a leading trader from Wayanad told FE.
Majority of the farmers in Wayanad are also back with ginger, he added. Leasing land in Karnataka is also back in favour with returns on the higher side. Mohanan feels that people in Karnataka have also taken into ginger on their own.
Ginger prices are almost double when compared to the previous season and good quality dry ginger is in short supply, Ananad Kishore, a leading trader at the terminal market of Kochi said.
The monthly supply is shorter by 27,000 bags, he added. However, Anand does not expect production to increase in the short run. He expects the supply to remain more or less the same for one more year as he expects a lag. Supply of good quality seeds may also hamper the revival in supply, he added. However, Anand is worried about imports as China and Nigeria are selling at a discount.