Spices

India: The rural economy is collapsing

February 10, 2017 at 11:24 AM , Der AUDITOR
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GUJARAT. The farmers in India are growing increasingly angry. Government measures are proving useless, severe drought is ruling the country and insurances have failed to compensate farmers. Demonetisation has resulted in a crash crunch, which is several affecting the rural economy and the market for spices.

Although the farmers are permitted to withdraw 10,000 Rs the institutions are not paying. Farmers affected by drought are also not receiving any compensation from the insurances.

Cardamom
The market witnessed a considerable price hike this week attributed to declining arrivals as the harvest season is drawing to a close. Cardamom, 8 mm traded on a price level of 21,350-21,650 USD/mt FOB this week.

Chickpeas
With arrivals increasing every week the prices have dropped considerably. Production is moreover expected to increase by 62%. The rapid speed at which the prices are decline comes as a relief to the market since prices were very high in the last few months. Market participants are optimistic that India will become less dependent on imports from Australia. The prices for chickpeas, 42-44 dropped from 1,938 USD/mt to 1,700 USD/mt FOB this week.

Cumin
Since the weather conditions are highly favourable the upcoming season promises a higher production. Limited upcountry demand, however, failed to produce a noticeable impact on the price development this week. The market even witnessed nominal price increases. Cumin, A grade 99% is currently offered for 2,790-2,805 EUR/mt FOB.

Coriander
Cheap imports have forced local producers to drop their prices. The problem is that bulk buyers are increasingly refusing to purchase from Indian suppliers. Coriander, Eagle 5% Split is currently trading on a level of 1, 030-1,085 EUR/mt FOB.

Turmeric
Although new crop arrivals are steadily increasing, the market remained rather stable this week as supply matched demand. Demand is expected to increase over the coming festival season. Nervous sentiments, however, also prevail since there are concerns that the farmers may hold back their products if prices fall too low. Turmeric, Finger Salem Double Polished is currently trading for 1,318-1,328 USD/mt FOB.

Chili
The cultivation of chili is becoming increasingly unattractive as the plants are very sensitive. Water shortages have also prompted many farmers to switch to lemons, whereas traders prefer chili. Prices are expected to drop on the South of India, which may lead to an upsurge in demand. Prices increased nominally this week. Offers for chili, S4 stemless are available for 1,730-1,740 USD/mt FOB.

Please find attached the price list.

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