Higher demand keeping ginger market firm in peak supply period

Written by RajeshRavi | Kochi | Updated: Feb 12 2014, 09:38am hrs
Higher demand for fresh ginger from the up-country market is keeping the ginger market firm even in peak supply period. With prices for fresh ginger at record levels, conversion into dry ginger is seen low and will impact supply in the coming months. India produces 2.75 lakh tonne of ginger per annum, almost a third of the worlds production of 8.35 lakh tonne.

The winter was harsh in the north and demand for fresh ginger is seen unusually high in those markets. Higher demand has led to lesser conversion and lower supply of dry ginger has helped in keeping the market firm, P Nandakumar, a trade consultant from Kochi said. Farmers are reluctant to convert fresh ginger into dry ginger at the prevailing prices and imports are much cheaper. Fresh or vegetable ginger is being sold at R50-55 per kg and dry ginger at R275-280 per kg, Ramalingam Vishwan-ath of GRK Traders told FE.

Nigeria is quoting around $1500-1800 per tonne in the global market while the Indian rate would be around $4500-4800 per tonne, he added.

Nigerian prices are steady while the Ethiopian crop is delayed. North Indian traders are trying to cover from Nigeria due to the unusually high prices of dry ginger, Nandakumar said.

India is at a disadvantage in comparison to countries like China, Nigeria and Ethiopia because of low productivity and high labour cost.

Supply of ginger is good despite some damage from heavy rains. New areas have come under farming in Karnataka.

According to data provided by the state-run Spices Board, production of ginger during 2012-13 stood at 7,45,269 tonne from 1,57,839 hectares. Higher prices for Indian ginger during the current season have led to lower exports.