Nutmeg prices pick up on poor output

The nutmeg and mace market is picking up due to poor output this time, courtesy heavy rains which devastated plantations.

After the Navaratri festival, the price of best quality red mace has appreciated by Rs 50-80 a kg to touch highs Rs 400-450 a kg.

The market is poised for a much bigger hike, like it happened four years ago, due to heavy losses in production and weak supply to major terminal markets like Kalady near here.

The price of un-shelled nutmeg has risen by Rs 20-30 a kg to touch a price band of Rs 200-210.

Shelled nutmeg has appreciated by similar levels to hit Rs 110-120 a kg. Market experts say the high demand from north India is on the cards due to the Diwali season and prices are expected to reach new highs in three to four weeks.

Leading traders based in Kalady told Business Standard that they are anticipating higher prices by December. At present they are holding large stocks. Most farmers expect a situation similar to that of 2003-04 when mace price touched Rs 700 and that of the un-shelled variety peaked to Rs 300 a kg.

Incessant rainfall in the last five months has caused a serious drop in production. According to farmers and traders, the production would be nearly 50 per cent compared with last season. India's annual average production of nutmeg is estimated at 3,000 tonnes.

But this time, the production is estimated below 2,000 tonnes. The rain has also affected the quality of the produce as high moisture creates a high level of fungus infection. The growers were also forced to pluck the harvest before proper ripening and this has created quality related problems to this season's output.

The rain has also seriously affected the initial harvest next season that arrives in March. This will definitely reduce the supply during the offseason (December to January)and hence a sharp increase in prices of nutmeg and mace is expected.

According to leading traders, imports from countries like Indonesia would be a determining factor in the nutmeg and mace market.