The Hindu Business Line : Rise in output may see poppy seed prices drop 40%

Market sources in Bangalore and elsewhere told Business Line that the prices of poppy seeds in Turkey fell from $6,000 to $4,000 a tonne and yet, there are no buyers due to the current economic slow down.

Meanwhile, Indian dealers are waiting for the arrival in June-July of the Indian crop, which is said to be three times of the normal output last year.

The Indian demand is estimated at 25,000 tonnes and almost half of this requirement was met by imports till last year.

“The Indian output in 2009 is estimated to treble following increase in area under the crop in Madhya Pradesh, Utter Pradesh, Rajasthan, where the Narcotics Commissioner said to have granted title deeds to more farmers permitting them to cultivate poppy seeds,” they said.

Indian output

Thus, the total area under the crop has multiplied to 12,000 hectares from normal 4,000 hectares, and as a result, Indian output is estimated to be around 15,000 tonnes this year, they said.

“So we are all expecting the prices of white poppy seeds are to drop to $1,500-2,000.

The depreciation of the rupee against dollar will not affect, as the prices in growing areas have fallen by 40-50 per cent and hence, the landed cost is unlikely to increase”, they said.

According to trading sources, the Czech Republic, whose annual output is around 60,000 tonnes of Blue poppy seeds, is reported to have a bumper crop this year and it is expected to pull the prices down from $3,500 to $1,000 a tonne.

‘Blue doesn’t matter’

Crash in the prices of blue poppy seed prices will pave the way for an increase in its imports as the quality is the same as of the white. The “blue colour will not matter, as it goes into ‘masala’ for grinding”.

FREE FALL SEEN

Such a situation will bring down the prices of white poppy seeds drastically, especially at a time when every one wants to cut the cost in this period of economic recession, they said. “We are sure in the next two months poppy seed prices will have a free fall”.

The prices of white poppy seed have dropped from Rs 550 a kg to Rs 330 currently and they are expected to crash to Rs 200 a kg in a month, they said.

Blue poppy seeds will be available at Rs 125-150 a kg once it’s harvesting begins, they said.

Demand squeeze

Recession has also contributed to the fall in the international prices of poppy seeds as there has been a significant squeeze in demand.

“People are not eating in hotels and other eateries outside home. As a result, the consumption has substantially dropped”, they pointed out.

This year, according to them, some new exporters of white poppy seeds will emerge from Europe at low prices.

However, the Indian dealers will import the cheapest blue poppy seeds, they added.