Ample Supply Weighs on Prices

The dry ginger market is struggling with excess stock and reduced demand, keeping prices low. Favorable conditions for the upcoming ginger crop are expected to boost production significantly, with key regions like Sagar Line, Cochin, and Eastern India reporting good sowing conditions. Production is likely to increase by 32%, according to initial estimates.

Price Drop Continues Across Markets

Surplus stocks from the previous season have caused a steep decline in prices. In Sagar Line, dry ginger prices have dropped to USD 3,24 per kg from USD 5,10 per kg earlier in the season. Markets in Kanpur are reporting prices between USD 3,00-3,06 per kg, while Sagar Line trades are as low as USD 2,82-2,83 per kg. Nigerian ginger chips, depending on quality, are being sold at USD 1,32-1,56 per kg, adding to market pressure.

Reasons Behind the Surplus

Last year saw a 47-48% rise in dry ginger production, driven by cheap raw ginger and high stocking by traders anticipating strong demand. However, delayed winter and reduced consumption have left large stocks unsold, creating a supply glut.

More Price Drops Likely

The combination of high stock levels and a promising new crop indicates further price declines. Traders predict a possible drop of USD 0,24-0,36 per kg as new supplies start arriving in one to two months. The market remains oversupplied with both old and fresh stocks.

Conclusion: Selling Over Holding

Given the current market conditions, traders should focus on selling rather than holding stocks. Prices are unlikely to see any significant recovery in the short term due to the continued oversupply and weak demand.

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