Supply pressure builds up in Thai dried ginger market

Thailand’s new crop availability on dried ginger is limited and the market looks set for another season of shortages of the spice in this form.

Dutch trader QFN Trading & Agency observed that due to strong demand from the fresh market less of the young ginger shoots were harvested.

For dehydrated ginger the industry needs young ginger shoots. “With a one year’s crop we foresee a serious shortage from early next year onwards,” QFN Trading warned.

Richard van Helden of QFN Trading told “The ginger crop in general was pretty OK, but there was a high demand, mainly from China for the fresh ginger. The dehydrated ginger shoots are harvested earlier than what they need for fresh ginger so at a certain moment it is very short period of three to four weeks only when they have to take the ginger out of the ground and start dehydration of the young ginger. If they leave it too long in the ground it becomes too old for dehydration. Then there is too much fibre inside and it is not nice for dehydration.”

A lot of farmers decided to keep the ginger in the ground because they were expecting higher prices for the fresh market and were not willing to sell the young ginger shoots to the dehydration industry.

“That resulted in a much lower volume that they could secure which is why we expect a shortage on dehydrated ginger from Thailand,” van Helden said.

The situation has meant that prices have not eased since last year, when there was also a shortage.

“We started this season a little bit with the end prices of last season, which were pretty high and we do not foresee that this market can go down,” van Helden said.

Thai crystallised dried ginger for prompt shipment is being quoted around USD4.25 per kilo c&f main European ports.

Van Helden confirmed that demand is running strongly. “Everyone was already short on ginger because Thailand was sold out around April or May. Many people were looking for material and were completely empty of stock. So demand is indeed pretty big and we expect that this will continue until early next year,” he explained.

QFN is advising buyers to cover their needs until August 2015.

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