Relief for buyers as ginger starts falling

One of the oldest traded spices, ginger is used in everything from biscuits to curry, so manufacturers will be relieved to hear that prices have started to fall sharply from the highs seen over the past two years.

Ginger is sourced largely from Asia, in particular China and India, and to a lesser extent from Africa, where Nigeria is the biggest exporter. On both continents, prices have tumbled, with the most dramatic and sustained falls seen in Asia.

After rising sharply to a high of almost $1,600/tonne at the end of 2010, wholesale prices in China have now plummeted to below $600/tonne [Mintec]. Meanwhile, in Nigeria, the price of dried ginger has almost halved over the past year to about $2,000/tonne, according to independent commodity broker Blair Coutts.

Prices have fallen because farmers were encouraged by high prices in 2010 and 2011 to expand their cultivations, leading to significant over-supply and lower prices.

Falling global commodity prices have started to filter through to the UK market, but stringent requirements on traceability and food safety – which restricts the sources UK buyers can use to buy ginger – mean the prices paid in this country have not fallen as dramatically as might have been expected from the commmodity price.

They certainly haven’t fallen enough to cancel out the retail price increases seen in 2011, report UK manufacturers. “The ginger market was very firm in 2011 and pricing was very high indeed,” says a spokesman for United Biscuits, maker of McVitie’s Gingernuts. “Fortunately the market has weakened slightly in comparison for 2012, although we remain above 2010 levels.”

If commodity prices remain at their current low levels, however, significant savings for UK ginger buyers should soon be on the horizon.