Demand pushes isabgol prices up

After adverse climatic conditions and shortfall in production fuelled the price of weather-sensitive psyllium (isabgol), increasing demand is expected to take the price of the commodity further up this season.

Markets in Unjha, Sidhpur and Palanpur located in northern Gujarat, considered the most important centres for psyllium cultivation, are experiencing increased activity, even as international buyers are waiting for the prices to settle.

While psyllium prices staggered between Rs 825 and Rs 850 for a 20-kilogram bag last month, it has shot up to between Rs 950 and Rs 1,000 in April.

Though average annual psyllium production stands at 90,000 tonne (10-12 lakh bags of 75 kgs each), last year the crop experienced a shortage of 25 to 30 per cent over the previous year, resulting in the production of only 52,500 to 60,000 tonne (7-8 lakh bags) due to inclement weather. Psyllium prices had then shot up to Rs 1,100- 1,300 per 20-kg bag.

This year, farmers have cultivated the crop extensively, and were, till January, expecting to produce at least 1,12,500 - 1,35,000 tonne(15-18 lakh bags) of psyllium.

Speaking to Business Standard, Niraj Wadhwa, partner, Siddhpur Sat Isabgol Processing Company, explained the reasons behind the price rise.

"Despite the the cultivation of psyllium being phenomenal this year compared to last year, the quality of crop arriving from north Gujarat is varying and not of specified quality standards. This is one possible factor for the prices scaling to between Rs 950 and Rs 1,000 per 20-kg bag. The inferior quality crop is available at between Rs 725 and Rs775 for a 20-kg bag," he said.

The variation in crop quality, according to Wadhwa, had "happened because of untimely weather and its impact on the weather-sensitive crop".

"This had compelled farmers to harvest their produce a little early, without completing the required cultivation cycle, resulting in the crop's inferior quality," he said.

Also, since the farmers feared excess production and the resulting drop in prices, many harvested the crop early, reducing the quality of the produce, said Dharmesh Patel of Vikas Industries.

Though initial reports of atmospheric disturbance in February had put the crop damage at 40 per cent, it has now been revised to 25 per cent, with production still expected to touch 84,375-1,01,250 tonne (11,25,000 - 13,50,000 bags).

While there is no carry forward stock from the previous year, psyllium production is expected to rise 59 to 62 per cent over the previous year, which could seriously impact pricing.

Meanwhile, despite the arrival of 1,125 -1,275 tonne of psyllium (15,000-17,000 bags, each of 75 kg) at the Unjha market, international demand has not picked up. Out of the total production, 20 per cent is consumed domestically, while the rest 80 per cent is exported to the USA, Canada, France, UK, Japan, Mexico, Indonesia, Korea, Australia, China and so on.

Domestic pharmaceutical majors such as Dabur, Dr Morepan, Glaxo, Lupin etc., as well as multinationals like Proctor & Gamble source the commodity from here.

The 12-15 psyllium processing and exporting units spread across Sidhpur, Unjha and Palanpur have not yet shown interest in procuring the commodity this year.

"Old commitments have not yet been fulfilled as the stocks are low. Secondly, buyers from the international domain are not ready to procure psyllium at these prices and are expecting them to come down," explained Chirag Patel, partner, Satnam Psyllium Industries.

However, after fulfilling the old commitments, new bookings are expected to follow. But there are possibilities of the international demand going up by then, and instead of prices falling down, it may go higher than the existing rates, added Dharmesh Patel of Vikas Industries.

---

SKYROCKETING

Average annual psyllium production stands at 90,000 tonne (10-12 lakh bags of 75 kilograms each)

Last year, the output fell 25 to 30 per cent over the previous year, resulting in the production of only 52,500 to 60,000 tonne

This year farmers have cultivated the crop extensively, and till January were expecting to produce at least 1,12,500 - 1,35,000 tonne (15-18 lakh bags)

Out of the total production, 20 per cent is consumed domestically, while the rest 80 per cent is exported to the USA, Canada, France, the UK, Japan, Mexico, Indonesia, Korea, Australia, China etc