Spices demand: Lower crop yield keeps prices of spices firm in wholesale
In the wholesale market, turmeric prices have increased by Rs 18-20 a kg to Rs 75 a kg and coriander by Rs 3-4 a kg to Rs 60 a kg in the last one month with the trade anticipating a smaller crop and increase of 15% to 20% in demand compared to the previous year, said Mumbai based Badshah Masala’s MD, Hemant Jhaveri.
He added that in the previous year, spices manufacturers didn’t increase the prices even though chili prices doubled, and turmeric remained firm as overall demand had seen a dip, but this year will take a call to change the retail price by April. “This year looking at the firm prices of the spices and increased demand we may do so,” he said.
The opening of schools, offices, hotels, and restaurants has revived institutional sales, said Jhaveri. He said that the domestic and export sales will grow by over 20% over the previous year as spices will be much in demand especially turmeric for its medicinal properties.
An official of Everest Food Products which sells under the Everest masala brand said that prices of cumin (jeera) and chilli which are important ingredients in Indian cooking are expected to remain stable, he said. “There is a drop in production of turmeric leading to the sudden increase in prices and we expect the trend to continue this year. Coriander production is less in Madhya Pradesh and Rajasthan. Looking at the trend, consumer prices are likely to increase this year,” he said.
High export demand for turmeric and coriander from China, Gulf countries, Malaysia, Singapore, and other European countries have started coming, which is also supporting the prices, said Ajay Kedia, advisor at commodity research firm Kedia Advisory. An increase in demand is also seen ahead of Ramazan and marriage season, he said.
“Currently, turmeric is getting support at Rs 7,566 per quintal of 100 kg in the futures market and prices can touch Rs 8,144 by March. Similarly, coriander which is ruling at Rs 6,500 per quintal can reach Rs 7,000 per quintal at the same time,” said Kedia.
To ensure quality and stable prices, spice companies do annual contracts with traders from February to April when the new crop is being harvested. Companies have started buying chili and cumin and, in a fortnight, will start coriander and turmeric procurement.
