Garlic on boil, to rise 25% more by December

The prices of garlic, a culinary spice and medicinal herb, are likely to rise 25 per cent by the end of the current calendar year on increasing domestic demand, export orders and lower residual availability on poor output last year.

The spice which is used as a medicine for protection against heart disease, cancer and infections has already quadrupled since June this year to trade currently between Rs 80 and Rs 100 a kg in Mumbai wholesale mandi while the same is available for retail consumers at Rs 130 a kg depending upon the area of purchase.

Traders believe that the price may set an all-time record to surpass Rs 200 a kg this year before the beginning of the next harvesting season that is January 15, 2011. In Delhi, however, stockist quote the commodity at Rs 80-150 a kg, nearly four times higher than the prevailing prices in June. In Faridabad, the commodity is quoted by stockist between Rs 120 and Rs 200 a kg while retailers sell at Rs 140-160 a kg.

 

In Indore mandi, too, garlic rose proportionately to Rs 100 a kg. Madhya Pradesh contributes over 50 per cent of India’s total annual garlic production.

“Prices are unlikely to ease during this lean season. Farmers bought seeds for ongoing sowing season at Rs 130-140 a kg. This necessarily means that prices would continue to move upwards during the next season also,” said a Mumbai-based trader.

According to an estimate, India produces nearly 600,000 tonnes of garlic every year. But, last year (in 2010) the output declined nearly 20 per cent due to adverse climatic condition. In 2009 also, the output was very low as farmers shifted to other remunerative crops due to low price of garlic in 2008.

“In 2008, it slumped to Rs 10 a kg as against then cost of production at Rs 12-15 a kg. Therefore, farmers dedicated less area in 2009 and 2010 resulting into lower output during both years,” said Moin Ali, partner of Ali Traders, an Indore-based garlic trader.

India exports nearly 15,000 tonnes of garlic every year mainly to Malaysia, Pakistan, Bangladesh and Sri Lanka. According to data compiled by the Spices Board, total export between April-August this year was recorded at 13,250 tonnes as against a mere 3,100 tonnes in the corresponding period of the previous year, a rise of 102 per cent.

Apparently, higher global prices fetched appreciably higher realisation to an average Rs 37.59 a kg in the period ending August this financial year as against Rs 20.39 a kg in the previous year. Spices Board had set an export target of 13,000 tonnes for 2010-11 worth Rs 35 crore.

“The current price hike can be attributed more to rising domestic festival demand than exports. Inter-state transportation has aligned high prices in one state to another,” said Sardar Natha Singh, general secretary of the Garlic Merchant Association.

In Delhi’s Azadpur mandi, total stocks currently stand at 15,000 bags of 50 kg each. This is normal level as exports have almost halted due to sudden spurt in prices. Export demand has eased in the last two-three months as supply from China has become cheaper compared to India. Dubai-based traders prefer imports from China, the world’s largest producer, to India due to better quality.