Spice prices skyrocket amid lower output, high demand | The Financial Express

Spice prices skyrocket amid lower output, high demand

The mandi price of cumin (jeera) is currently ruling around Rs 4,700 per 20 kg bag at Unjha mandi (Gujarat), the largest market of the spice in the world, against a price range of around Rs 2,400-2,600 per 20 kg bag that prevailed a year ago.

Spice prices skyrocket amid lower output, high demand
“We are expecting the prices to further surge and touch Rs 5,000 per 20-kg bag by November, as there is a robust demand for quality cumin in the export market, while the domestic demand is encouraging,” Arvind Patel, vice-president of Unjha Agriculture Market Produce Committee (APMC), told FE.

By Sandip Das, Nayan Dave & Geeta Nair

There has been a double-digit increase in mandi prices of spices, including cumin (jeera), coriander (dhania), black pepper and dry chilli, in the last one year, due to decline in production amid robust domestic demand.

With the exception of turmeric, for which inflation was 6.7% on year in August, all other spice varieties reported double-digit inflation — dry chilies (23.4%), coriander (18.9%), cumin (18.3%) and black pepper (14.7%).

Traders say while turmeric prices have stabilised since its peak earlier this year, mandi prices of all other spice varieties are expected to rise further, because of supply constraints caused by lower production and robust global demand driving exports.

The mandi price of cumin (jeera) is currently ruling around Rs 4,700 per 20 kg bag at Unjha mandi (Gujarat), the largest market of the spice in the world, against a price range of around Rs 2,400-2,600 per 20 kg bag that prevailed a year ago.

“We are expecting the prices to further surge and touch Rs 5,000 per 20-kg bag by November, as there is a robust demand for quality cumin in the export market, while the domestic demand is encouraging,” Arvind Patel, vice-president of Unjha Agriculture Market Produce Committee (APMC), told FE.

Also Read: Tamilnad Mercantile Bank shares end flat after tepid debut

In the current 2021-22 season, cumin production is estimated around 5 million bags (55 kg per bag) as against over 8 million bags in 2020-21.

As the cumin crop is highly sensitive to weather and disease, a section of farmers in the key producing states of Rajasthan and Gujarat has switched to other crops such as cotton, mustard seed, groundnut, soyabean and coriander seed, thus reducing the production, Patel said.

Dipak Sanghvi, managing director, Nilon’s, a major manufacturer of pickle and spices, said the last year saw spice prices go up significantly, with an around 14% increase in prices of packaged spices. The price of raw chilies has doubled from Rs 120 to Rs 240 per kg during December 2021-September 2022, while coriander prices went up from Rs 75-80 to Rs 120 per kg in the same period.

According to Sanghvi, black cardamom prices rose from Rs 350 to Rs 650-700 per kg, while green cardamom prices increased from Rs 400 to Rs 650-700 kg since the beginning of 2022. “Food ingredients coming from China, such as bonding agents and emulsifiers, too had gone up substantially due to Covid disruption and shutdowns,” he said.

In the case of turmeric, mandi prices have been prevailing around Rs 70-75 a kg currently, compared to around Rs 105-Rs 107 a kg that prevailed in January.
“Turmeric mandi prices spiked earlier this year because of reports of possible crop losses. However, the prices have eased since April after a robust harvest,” Ankit Agarwal, director, Amar Agarwal Foods India, Erode, a Tamil Nadu-based turmeric trader, said. Agarwal said that the prices are expected to hold at the current level and a spike in prices is highly unlikely.

Karnataka, Maharashtra, Assam, Odisha, Uttar Pradesh, West Bengal, Tamil Nadu and Kerala are major producers of spices in the country.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.