Ginger prices soar on low output in IndiaExports almost doubled to 21,098 tonnes valued at Rs997.76 million in the first 11 months of the fiscal year.
Ginger farmer Krishna Magar of Dhankuta is walking on air after the price of the spicy root jumped six-fold this year. The cash crop is a major source of livelihood in eastern Nepal, and a rise in prices means a higher standard of living for the farmers there.
Magar was selling ginger for Rs40 per kg till last year, but poor harvests in India this year sent the price soaring to Rs250 per kg.
Traders say Nepal's ginger exports to India in the first 11 months of the fiscal year were almost double compared to the previous year.
Nepal is one of the world’s largest producers of the spice. The ginger grown in Nepal is high in oil and oleoresin. Several reports have shown that it can be sold to large industrial buyers in India and other countries if output is increased and quality is ensured.
More than 98 percent of Nepali ginger is sent to the southern neighbour. Ginger root is mostly used by the Ayurveda pharmaceutical industry, particularly in India. It is also used to make jam, jelly, candy and sauce, among other products.
Magar says he has been growing ginger for decades. “My father too was a ginger farmer. We have never seen the price rising like this,” said Magar from Gurdhum, Sagurigadhi-6.
Magar was visiting the agricultural goods market in Dharan-13 to sell his harvest. He said there was no guarantee that the current rate would last.
“If this price continues till mid-October, thousands of ginger farmers will benefit,” he said. Last year, Magar earned barely Rs50,000 by selling 1.5 tonnes of ginger.
The price had sunk to a low of Rs10 per kg some years ago, and many farmers switched to other crops. Ginger farmers in eastern Nepal are excited about this season’s harvest.
Nepal is fully dependent on the Indian market to export its produce, and the traders there decide the rate.
Laxman Bhattarai, manager of the agricultural goods market in Dharan, says that ginger prices are determined by Indian traders. “Ginger farming is like gambling,” Bhattarai said. “No one knows when the price will rise or fall.”
This year, high demand and low production resulted in record high prices, traders say.
The wholesale price of ginger has reached Rs240 to Rs250 per kg in the agricultural markets at Gaighat, Udaipur and Birtamod, Jhapa, according to Bhattarai.
Farmers of Udaipur and Khotang sell their ginger in Gaighat.
Farmers of Dhankuta and Tehrathum send their crops to Dharan while farmers in the Mechi corridor—Ilam, Panchthar and Jhapa—sell theirs in Birtamod.
The Dharan agricultural market said 7,820 tonnes of ginger had been sold there as of the last week of June.
At the same time, ginger worth Rs1.6 billion has been exported to the Indian market.
Traders say that another 2,000 tonnes of ginger will arrive in the Dharan agricultural market by mid-August.
Last year, 10,641 tonnes of ginger worth Rs425.6 million was sold in the Dharan agricultural market at the rate of Rs40 per kg.
"Based on the current price, the ginger produced in the Koshi corridor, mainly Sankhuwasabha and Dhankuta, has a market value of Rs1.15 billion," Bhattarai said.
In the fiscal year 2012-13, the price had hit a high of Rs170 per kg. During that year, 5,650 tonnes of ginger was exported to the Indian market.
But in 2016-17, ginger prices plunged to Rs10 to Rs15 per kg, prompting distressed farmers to dump their harvests on the road outside the agricultural market.
Wholesale trader Gyan Bahadur Basnet says demand for ginger rose in Nepal because output in India has dropped by 60 percent this year.
“Demand for Nepali ginger rises when Indian production declines,” Basnet said.
Traders in eastern Nepal transport ginger to the processing centre across the Mechi border in Naxalbari, India. There the ginger is cleaned, sorted according to size and dispatched to markets in Kolkata, Patna and Delhi in India.
Nepal has not been able to market its ginger in other countries due to lack of information about the product’s physical and biochemical properties.
Reports show that the spice has a huge overseas trading potential if substantial improvements can be made in yield, quality and volume by investing more in research and development.
Even without a substantial improvement in quality, small trading hubs in India will continue to be major markets for local ginger.
Bhattarai says that if the government builds a ginger processing centre in Nepal and makes arrangements for branding, labelling and packaging, Nepali ginger farmers can earn three times more.
Nepal's ginger exports swelled by 81.4 percent in the first 11 months of the current fiscal year ended mid-June. Shipments amounted to 21,098 tonnes valued at Rs997.76 million, according to the Trade and Promotion Centre.
In the last fiscal year, exports totalled 11,958 tonnes worth Rs641.45 million.