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Inflation takes hold in spices; cumin prices reach five-year high

Extreme weather, which scientists link to the climate crisis, has set off shortages of key food items this year. No Indian curry is complete without a flavouring of masala, but after lemons, prices of spices have surged, led by cumin, according to market reports and price data.India accounts for nearly 70% of the world’s cumin production and is its biggest exporter. A fall in output this year, therefore, is likely to impact global food prices, already at record highs.Prices of cumin or jeera, the second most widely consumed spice, have shot up to a five-year high, as output has shrunk by a third. Average weighted price of cumin in wholesale markets has touched nearly ₹13,000 a quintal (100kg), up from ₹12,522 in 2021 and ₹12,333 in 2020, reports from agricultural markets show.At the onset of summer in March, lemon prices trebled from a year ago due to a bad crop.A key reason behind the shortfall in cumin has been unfavourable weather. Farmers in major growing belts shifted to other crops such as mustard due to a sudden change in weather patterns marked by excess rainfall during sowing. “We expect prices to rise beyond ₹200 a kilo for the premium variety of cumin,” said Rajesh Vyas, a trader from Rajasthan. Packaged sellers of spices are already buying at higher prices, which they are likely to pass on to consumers, he said.A severe heatwave in mid-March has likely cut India’s wheat crop by 5%, from 111 million tonne to 105 million tonne, the government said this week. Prices of cumin in Gujarat’s Unjha mandi, a major trading hub, have increased from ₹180 per kg in March to about ₹215 per kg this month.Cumin is sown during October to December and harvested between February and April. Excess rainfall in November-December 2021 in cumin belts of Dwarka, Banaskantha and Kutch in Gujarat, and Jodhpur and Nagaur in Rajasthan increased fears of pest attacks. This led farmers to shift to other crops, which is a key reason for lower harvests.“The Unjha mandi in Gujarat, which accounts for 40% of India’s cumin arrivals, witnessed a 60% decline in arrivals in March 2022,” said Pushan Sharma, who tracks commodities and is director, Crisil Research. “Adverse climatic conditions deterred proper seed filling, resulting in an estimated yield decline of 20% in Gujarat and 15% in Rajasthan,” Sharma said.Total cumin output is estimated to have declined 35% from a year ago to 558 million tonne in 2022, according to market analysts. Crisil Research’s analysis shows prices will shoot up 30-35% from a year ago to a five-year high of ₹165-170 a kg.

ABOUT THE AUTHOR

Zia Haq reports on public policy, economy and agriculture. Particularly interested in development economics and growth theories.
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