Indian spice prices change sharply between seasons because most spices are harvested once a year, and the size and quality of that one crop depends heavily on weather. A short crop can push prices up a long way. A large one can bring them down just as fast.
On top of that, India is the world's largest consumer of spices as well as the largest producer and exporter. Domestic demand takes much of the crop, so export buyers compete with the home market for what is left.
One crop a year, decided by weather
Seed spices such as cumin, fennel, coriander and fenugreek are winter (rabi) crops. They are sown roughly October to December and harvested roughly February to April. The monsoon before sowing sets soil moisture, and conditions through winter decide yield. Unseasonal rain or a heat spell close to harvest can damage both volume and quality.
Because there is no second harvest to make up a shortfall, the market spends the rest of the year working through whatever the season produced. Our article on how weather and monsoon affect crop prices covers this in more detail.
Farmers switch crops
Farmers choose what to plant each season based partly on last year's prices. A year of high cumin prices can lead more farmers to sow cumin, which can mean a larger crop and lower prices the following year. A poor price can have the opposite effect. This cycle adds to the swings, and it is one reason a single year's price is a poor guide to the next.
Other forces that move the price
- Carry-over stock: if traders and processors hold a lot of old crop when the new harvest arrives, prices tend to stay soft. Low stocks do the reverse.
- Domestic demand: festival periods and wedding seasons lift local buying.
- Export demand: large orders from major importing countries, or a pause in buying, shift the balance.
- Speculation: traders take positions on expected crop size. Cumin and coriander futures have traded on NCDEX, and moves there can feed back into the physical market.
- Competing origins: crops in other producing countries affect how much overseas buyers need from India.
- Policy: export restrictions, duties or new compliance checks in an importing market can change demand quickly.
- Quality issues: a crop with high moisture, mould or residue problems narrows the supply of export-grade material, even when total volume looks normal.
What you can do about it
You cannot control the crop, but you can reduce the surprise. Plan your annual need early. Watch arrivals at the main markets from around March, when new-crop seed spices usually peak. Consider booking part of your requirement at harvest, when the price picture is clearer, and leave the rest open. Our guide to forward or seasonal price booking explains the options.
Also be wary of very long price holds. A supplier who fixes a price far ahead without owning the stock is taking a risk that may come back to you as a delay or a quality change.
Where we come in
We track arrivals, crop reports and market sentiment for the products our buyers take, and tell you plainly what we see each season. To talk through timing for your next contract, ask for a free sourcing review.