Spices: Price collapse is driving market players to despair

June 12, 2017 at 10:59 AM , Der AUDITOR
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GUJARAT. India is setting one record after the next. Once more this year, the government is planning new record productions for spices and cereals. Much to the chagrin of the farmers.

They are suffering from the rapid price decline associated with the record crops. Until now, however, the government has only announced increased prices for purchases of legumes and rice. Moreover, the weather forecast for this year's monsoon is extremely promising. The Indian weather service is expecting normal monsoon rains of 98%.

Cardamom

Buyers are waiting for the new crop. It brings the promise of better quality and availability. It therefore comes as no surprise that the prices for cardamom plummeted last week. The only thing stopping further price declines is the Ramadan-related demand. The prices for cardamom, 8 mm dropped from 24,670 USD/mt to 24,370 USD/mt FOB.

Black pepper

In some parts of India, rain is preventing the transport of pepper and is causing prices to rise rapidly. Although the availability of Indian products is limited, the markets are virtually being flooded with deliveries from Vietnam and Sri Lanka. The prices for pepper, 500 GL rose from 10,350 USD/mt to 10,650 USD/mt FOB over the last week.

Cumin seeds

The prices for cumin seed dropped slightly last week. This is mainly due to the slump in demand in the last few weeks; moreover, the outlook for the monsoon is very promising. However, low surplus stocks, increased purchase activities and the prospect of stronger export demand suggest that prices may rise in 2017-18.

Coriander

After the farmer protests in Madhya Pradesh, things have quieted down on the market. The prices have dropped minimally. Buyers are longing for stability and prefer to wait. Coriander, 5% Split is currently trading at a level of 805-815 USD/mt FOB.

Chilli

The market was really quiet last week and prices were stable. Compared to last year, however, prices have decreased by 60%. This is due to the bigger production and the lower domestic demand. Despite the quiet market situation, market players are optimistic that the low prices will promote stronger export demand. Chilli, S4 is currently quoted at 1,280 USD/mt FOB.

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