Dried ginger from China is poised to become a threat to the domestic market during the current season, experts said.
China is aggressively selling dried ginger at a price tag of Rs 8,000 a quintal, free on board, for Mumbai and Kochi. While domestic price stands above Rs 11,000, ginger from China, including import duty, costs around Rs 10,800 per quintal.
The domestic price of dried ginger in Mumbai would total to Rs 13,000 a quintal after including taxes. This gave China a price advantage over India in the current season which is a crucial factor in determining domestic price.
Demand for dried ginger in the north Indian markets peaked during the November - January period. Based on preliminary estimates, market sources had expected a spurt in prices since there had been reports that China was short of output this season.
But later it was reported that China was having a robust production season. This led to China cutting prices to $1750 a tonne from $2150 a month back. Six months back China had offered ginger at a price tag higher by almost $1000, tonne.
An export trader told Business Standard that China was aggressively slashing prices and this might affect production in India. The average annual production in India is 12,000-15,000 tonne and the price of ginger plays a major factor in determining the production of dried ginger.
The current domestic price band for dried ginger is between Rs 11,000 and 12,000 a quintal and poor stock position is the major reason for the high price level.
Meanwhile, dried ginger from Karnataka has already hit the terminal markets and the season would be in full swing soon and production has not picked up yet in Kerala.