The climatic conditions and the demand for spices are shaping the outlook for the year ahead. As key contributors to the country’s food inflation, spices have taken centre stage, with jeera, fennel, chilli, black pepper, turmeric, and ginger witnessing notable rallies in 2023.
Fluctuations in Spice Prices
Jeera, reaching a record high in Gujarat, experienced fluctuations alongside other spices like chilli, ginger, and turmeric. Black pepper marked a five-year high, while small cardamom touched a three-year peak, reflecting the spice market’s dynamic nature.
Factors Driving the Surge
A supply-demand imbalance fueled the spice price surge. Low yields, shifting weather patterns, delayed monsoons, farmer transitions to other crops, and pest attacks disrupted the supply chain. The weather-sensitive nature of spice crops intensifies the impact of climatic variations on yields.
Cumin’s Overlook
Cumin prices soared to an all-time high but are now trading close to a one-year low. The decline in production over two years, adverse weather, and lower carry-over stocks led to the bull run. However, expectations of increased cumin production in the 2023-24 season might stabilize prices.
Turmeric’s Golden Glow
Turmeric prices surged over 70% in 2023, hitting a record high in August. Delayed sowing, erratic monsoons, and concerns over yield contributed to the rise. While turmeric acreage decreased, robust export demand kept prices firm.
Coriander’s Resurgence
Coriander, after facing losses in 2023, is rebounding. Strong export demand and concerns over lower acreage are supporting the upward trend. The Spices Board reported a significant jump in coriander exports, indicating a positive shift in market movements.
Market Outlook and Influencing Factors
With spice harvests commencing in January-February, market fluctuations are imminent. Climatic conditions and both domestic and export demand will dictate sentiments. The Red Sea’s ongoing tension adds an element of uncertainty, potentially impacting supply chains and costs.
Conclusion
In conclusion, the spice market reflects a delicate interplay between climatic shifts and demand. The surge in spice prices, notably in cumin, turmeric, and coriander, highlights the market’s volatility. Supply-demand imbalances, adverse weather, and geopolitical tensions in the Red Sea contribute to market uncertainties. While cumin prices stabilize with increased production forecasts, turmeric maintains firmness due to robust export demand. Coriander’s resurgence signals a positive shift driven by strong export demand.
Exporters must guide these complexities as spice harvests commence, understanding that market movements hinge on climatic conditions and evolving demand patterns.
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