Dry ginger prices double on low output

The prices of dry ginger have almost doubled in a year due to a shortfall in the global production and supply.

The domestic price of best quality dry ginger is currently quoted at Rs 21,000 a quintal against Rs 12,000 a quintal last June.

Prices may rise further as the shortage is likely to continue till the next crop season, that begins in December.

Local producers, in Kerala and Karnataka, are not willing to release the available stock in anticipation of higher prices. They expect prices to reach Rs 30,000 a quintal within the next two-three months. Such a steep rise in ginger prices has not happened in the last 10 years.

Production in China, world’s largest producer of dry ginger, has been affected and it has increased its prices to $4,250 a tonne. India quotes $4,400 a tonne for the same.

According to top exporters, the main constraint is that even at this price level it is very difficult to procure high quality ginger. They said it is because of the steep rise in the demand of fresh ginger across the country. Ginger growers are not keen on making dry ginger as they get higher price for fresh ginger.

Lack of labourers also forces them to sell ginger at the production level itself, as fresh ginger. Production of dry ginger is labour intensive, though is 4-5 times expensive than fresh ginger. Loss of weight and keeping in wet condition are also serious concerns for farmers. The current monsoon, followed by the winter season will further add pressure on the demand and may lead to increase in prices.

Weak supply is not an issue in India alone, but also in China and other leading producers like Nigeria and Ethiopia. Though Nigeria and Ethiopia offer much lower prices, quality is a serious concern for import from these countries.

According to a leading Kochi-based trader, exporters of Nigeria had defaulted orders several times because of the galloping prices. Around 20 per cent of consignments were of poor quality and destroyed. The latest offer by Nigeria is $2,900-2,950 a tonne while Ethiopia, where ginger is hardly available now, offers $2,500 a tonne. Interestingly, the price in Nigeria was $545 a tonne in June last year.

Due to the sharp increase in prices, the export demand is rather weak at present. Imports to Middle East, where Indian ginger is much in demand, have declined compared to last year, said exporters. But there is a good local demand which is likely to strengthen owing to seasonal advantage.

So, the market will be under tight grip of suppliers for the next few months.