What’s Causing the Sudden Decline?

Fennel prices in India have been on a steady decline, largely due to an oversupply of old stock and weak demand. Across grocery markets, traders report that the large quantity of fennel available has led to a bearish market. Traders expect prices to stay low, maybe even throughout the entire year. Factors like heavy rains, reduced sowing, and lower foreign demand have added to the pressure on prices.

This year, fennel production has been higher than expected. The primary producing states—Gujarat, Rajasthan, Haryana, Uttar Pradesh, West Bengal, and Andhra Pradesh—all saw significant yields. As a result, fennel floods the market, particularly older stock that traders haven’t sold due to weak demand. With quite some time before the new crop arrives in February or March, this old stock will continue to weigh down prices.

Global Markets Shake Things Up: Weak Demand Worsens the Situation

A major reason for the price drop is the weak demand, both at home and abroad. Since July, domestic sales have slowed, and globally, geopolitical issues in key importing countries like Bangladesh, Russia, and China have reduced the demand for Indian fennel. This is making it harder for exporters to sell fennel in bulk.

On top of demand issues, traders are facing logistical challenges, including shipping delays. This has made it even more difficult to move stock overseas. As a result, fennel stock continues to pile up unsold, further pushing prices down. No matter what, the market remains stuck in a downward spiral.

Unpredictable Rain Causes Sowing Delays

Excessive rainfall in key producing regions has delayed the sowing of new fennel crops. Farmers usually plant fennel in October and harvest it by February or March. However, with the unpredictable weather this year, many farmers have pushed back their planting schedules. This may reduce the total area of fennel cultivation, potentially leading to lower production in the next season.

Farmers are also hesitant to plant fennel this season, given the ongoing price slump. Many are considering switching to other crops that could provide better returns. With such a high surplus and prices already low, it seems fennel is not the crop of choice for many farmers right now.

What to Expect in 2024

Given the current market situation, there's little chance of a significant price hike for fennel in the coming year. Prices are likely to fluctuate, but only by small margins. The oversupply of old stock, weak demand, and delayed sowing will keep the market under pressure. Although festival seasons may boost domestic consumption slightly, overall demand will likely remain lower than anticipated.

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