India

Spice prices to fall as farmers increase production

By RJ Whitehead

- Last updated on GMT

Photo: iStock
Photo: iStock
The world’s pepper market has seen prices falling from the highs they experienced in the second-half of last year after the arrival of a new crop into India and Vietnam. 

A larger crop in Vietnam is also forecast for 2016, with pepper production expected to increase by an estimated 20%, to 160,000 tonnes, due to an increase in planted area—up by 18% to 100,000 ha. 

Higher crop expectations and the possibility of further price erosion has taken some demand off the markets, adding to a downward pricing trend.

Spices

Coriander prices have fallen sharply since November last year, though weather conditions have been favourable for the development of seed in the main growing regions of Gujarat, Rajasthan and Madhya Pradesh. 

According to Mintec, a commodities analyst, this will aid higher yields and should provide good quality seeds compared to last year, when coriander prices increased sharply between March and June due to damage caused by heavy rains and hailstorms during the harvest.

Indian ginger prices have dropped over the past weeks following the arrival of a new crop, and also due to higher ginger production this year. Following two years of very high prices, farmers have expanded their planted area and consequently production has increased.

Chilli prices remained high at the start of 2016, supported by limited supplies. Current arrivals in the main markets in India are 60% below average, following lower production from the current season. The crop is forecast to fall substantially short this year due to an erratic monsoon, scarcity of rain, lower planted area and a disease which has severely reduced production in the Madhya Pradesh province. 

The situation has been aggravated by farmers holding on to stocks, with a view to maximising revenues in the months to come as prices remain firm.

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