Nutmeg prices up 5.7% on short supply

Supply shortage to supply to terminal markets coupled with spurt in demand from north India have caused prices of nutmeg and mace to rise this week.

Price of fresh nutmeg (without shell) has increased to Rs 180-185 a kg, up 5.71 per cent over the Rs 170-175 quoted a couple of weeks back. Nutmeg (with shell) is currently quoting Rs 90 -100 a kg.

Carryover stock of the commodity is available at Rs 190, up Rs 10 over last week's prices.

According to estimates, production would be lower in this season with heavy rains in the flowering season destroying most of the crop. Farming of nutmeg being scattered, It is difficult to reach a consensus on the size of the crop.

Traders said that if there is 10 per cent drop prices could increase further by 20 -30 per cent. Growers also anticipate a price increase as they observe the recent hike in demand as lower output this time.

Market sources said there is acute shortage of nutmeg and mace. The yellow mace crop will reportedly be delayed by two months.

Traders say the season will be in full swing only by next June although the first lots are expected to start reaching the markets by the middle of May. Normally, the season starts by March.

Acute shortage of yellow mace has pushed prices to Rs 500, Rs 50 higher over last week. Prices are expected to be higher next week. Red mace is currently quoting Rs 450-460, higher by around Rs 50 over last week.

The market is now heavily depending on the carryover stock, which is comparatively high this year.

A prominent trader of Kalady said without the carryover stock prices would have breached the Rs 200 mark.

Last year had seen heavy stocking of nutmeg and mace by growers as prices the previous year were at an all-time.

He also said that anticipating a drop in output this year, demand from north Indian markets was high, which has further bolstered prices.