Garlic price surges on seasonal demand

Up 15% this month, with a delay in the new crop; price expected to stay high for a while

After high volatility in 2014, the price of garlic settled higher last week due to strong seasonal demand and falling stocks, plus a delay in harvesting of the new crop. Lower crop output estimates supported the upward march.

The price is up 15 per cent spurt so far this month, to trade at Rs 3,785 a quintal on Tuesday. After a high of Rs 4,250 a qtl on January 9, it fell to Rs 3,625 a qtl a week later.

"Harvesting of the new crop is delayed by over a month. While new arrivals have started in Madhya Pradesh, the quantity is insufficient. Consequently, supply into spot mandis is coming from cold storages," said R P Gupta, Director, National Horticultural Research and Development Foundation.

Replanting of garlic saplings was delayed by a month after a proportionate delay in harvesting of kharif crops. Normally sown towards the end of September, the early variety of garlic is harvested in January. The normal variety is sown in October, for harvesting in February. Sowing of all agricultural crops was delayed in the 2014-15 crop year (July-June), due to delay in monsoon rain.

"The entire season is late by a month. Last year's crop is gradually getting exhausted in warehouses. Bulk dealers, therefore, are selling to wholesalers at a higher price. Consumers will have to live with higher prices for at least a fortnight," said a Rajkot-based trader and exporter.

 

The Union agriculture ministry has, in its third advance estimate, anticipated garlic output at 1.18 million tonnes for 2013-14, down from 1.22 mt in the second advance estimate and 1.26 mt in the first. The National Horticulture Board put output at 1.26 mt the previous year.

"Lower crop size is the only reason for the price firming up," said Mohinder Singh, general secretary of the Delhi-based Garlic Merchants Association.

Foreign demand has been low so far. Demand from Bangladesh is expected with the receding supply from China, the world's largest producer and supplier. Harvesting takes place in India at the time the supply exhausts from China. Garlic export was 34,020 tonnes worth $14.3 million in 2013-14, as compared to 36,227 tonnes for $13.8 mn the previous year. India suddenly strengthened its position in the export market after a mere $2 mn worth shipped in 2011-12.

"European demand has seen a lull, probably because of the region's weak economic trend. Asian markets turn towards India due to the supply lag from China," said the Rajkot trader.

With a 60 per cent share, Bangladesh was the largest importer of garlic from India in 2013-14, followed by Pakistan with 20 per cent.