•DRIED GINGER•
KEY FACTORS
- The market is expected to be stable in the short term as usual demand from China for lunar New Year is expected to absorb the new Chinese crop over the next months.
- Over the medium term prices might increase somewhat as farmers are reluctant to sell at current price levels and speculators are entering the market by putting product in cold storage.
- Over the longer term, prices are likely to remain around current levels, as there seems to be no real change in production and demand levels.
SUPPLY DYNAMICS
- Chinese ginger season is from Dec-17 to Feb-18. The crop size is expected to be the same as last year, but the dried quality is expected to be better because of favorable weather. There are some reports of local authorities inspecting and stopping factories due to non-compliant production processes, however overall impact of this is expected to be low.
- Nigeria has very good crop this year. The product is imported and sold easily as an alternative product in India.
- Indian farmers are rumored to have brought down the sowing area by ~25-30%, because of unfavorable prices. This has not been confirmed though. Harvest is slightly delayed.
PRICES TRENDS
- Nigerian dried ginger is being offered at very competitive prices for January/February shipment. – Current fresh ginger prices in India have made conversion to dry uneconomical at prevailing price for dry product. Farmers in India, with generally less production than last year, are expecting prices for fresh material to remain relatively high.
- Chinese processors are advocating they don’t want to take too much risk buying fresh ginger for processing, as they are afraid that prices may drop as Nigerian ginger did.
- Overall, limited price movement is expected in the near term and maybe some upward pressure in the medium term as availability of dried product could be less. In the longer term, prices are expected to remain at current levels.
