Ahead of the Diwali festive season, the price of nutmeg has escalated to Rs600 and Rs650 per kg. This is mostly because climate change and the two consecutive floods in Kerala have impacted nutmeg production over the last year.
The state has also been witnessing unprecedented rains in the last two months which has further impacted the production of nutmeg. The farmers however are hopeful of even better price realisation.
Given the rising demand from major consuming centres, they are now anticipating at least a Rs15-25 per kg rise before Diwali. Nutmeg is the main ingredient in the spices used for the confectionery, and the perfume industry, besides being known for its medicinal values.
According to industry sources, though there have been lower arrivals of the crop in the market, there are some stocks available with farmers both in the primary markets and consuming centres.
Nutmeg production with shell and mace (red membrane) put together is 10,000 tonnes. Out of which, 7,500 tonnes are without shell nutmeg and 10 per cent is mace with 750 tonnes.
The balance is the empty shell weight. Of this, 3,500 tonnes go for domestic consumption and it is mainly used for the pharma industry.
This year, two consecutive floods in Kerala has impacted nutmeg production, which is mainly confined to the Ernakulam district. Moreover, the sector has also been reeling under a host of issues including Covid related market conditions, non-availability of trains for transportation to North Indian destinations, etc.
The labour shortage also hit production especially in the monsoon, considered as the peak harvest time for Indian nutmeg, leading to a near 30 per cent drop in output this year compared to last year.
The export market too has been down, witnessing a 30 per cent drop due to Covid related issues and the resultant financial crisis in many overseas destinations. Gulf countries are the major export market for Indian nutmeg which was re-exported from there to many countries including Africa. However, the easing of restrictions abroad is expected to revive exports. But the recent unprecedented rains in Kerala is likely to impact the flowering and will further hit the production of the crop next year.