Market Trend Spices

Festival demand in markets ahead of Diwali driven up Nutmeg prices

"Diwali driven up Nutmeg prices (2)"

Festival demand in major upcountry markets ahead of Diwali has driven up nutmeg prices to between ₹600 and ₹650 per kg. However, due to unprecedented rains in Kerala, production has dropped, and a variety of other issues have prompted farmers to expect higher prices. Nutmeg is a fragrant spice derived from the seeds of Myristica fragrans, an Indonesian tropical evergreen tree.

Given rising demand from major consuming centers, they are now forecasting a ₹15-25 per kg increase before Diwali. Aside from its medicinal properties, nutmeg is a common ingredient in spices, confectionery, and perfumery.

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According to Anand Kishore, President of the Indian Pepper and Spice Trade Association (IPSTA), the fag end of the season has resulted in lower crop arrivals in the market, but there are some stocks available with farmers in both primary markets and consuming centers.

The combined production of nutmeg, shell, and mace (red membrane) is 10,000 tonnes. There are 7,500 tonnes of nutmeg without the shell and 750 tonnes of mace. ‘The empty shell weight is the balance. Of this, 3,500 tonnes are for domestic consumption, primarily for the pharmaceutical industry,’ he explained.

Significant consequences

PD Zachariah, President of the All Kerala Nutmeg Growers Association, emphasized the issues related to climate change and the two consecutive floods in Kerala, which had an impact on nutmeg production, which is primarily confined to the Ernakulam district. Normally, farmers would receive higher prices for a lower crop. However, due to unknown reasons, this has not occurred.

The sector was beleaguered by a slew of issues, including Covid-related market conditions, a lack of trains for transportation to North Indian destinations, and unnecessary checks on consignments due to GST-related issues.

‘The labour shortage also impacted production, particularly during the monsoon, which is considered the peak harvest season for Indian nutmeg,’ he said, adding that farmers expect a 30% drop in output this year compared to last. The price of mace has also dropped from ₹1,950 last year to ₹1,600-1,700 this year.

Sabu Joseph, an exporter from Ann Impex House of Spices, stated that the export market was down, with a 30% drop due to Covid issues and the resulting financial crisis in many overseas destinations. The Gulf countries are the most important export markets for Indian nutmeg, which is then re-exported to many other countries, including Africa.

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However, the improved Covid situation in other countries is expected to boost exports. However, he is concerned about the unprecedented rains in Kerala, which are expected to disrupt flowering and reduce production even further next year.