Wednesday, May 16, 2012

Spice

I was in my local grocery store this week because I wanted to buy some walnuts. Chopped walnuts, 400 grams (just shy of a pound) were $10. "No no," I thought, and went next door to the specialty store to compare prices. Same thing. What the hell happened to the price of walnuts when I wasn't looking? Turns out, walnuts are just like oil--there is a world price and you have to pay it no matter what the local supply price should be. And in the last couple of years, even though California has had record walnut harvests, demand from China has exploded.This year's price is expected to be 35% higher than last year's price. Western Farm Press reports:
Despite this biggest-ever California crop, buyers have been willing to pay more for walnuts. Compared to a year ago, in-shell prices are currently 20 percent to 30 percent higher, while shelled walnuts are selling for 20 percent to 50 percent more, Jelavich reports.
He attributes much of this to strong demand by buyers in China and Hong Kong, who first entered the market just three years ago.
“Last year, at this point in the marketing year, these two markets had bought a combined total of 14,000 tons. This year, they’ve already purchased about 40,000 tons.”
Nutmeg


While I was buying a quarter cup of walnut pieces, I noticed the jar of whole nutmeg behind the counter: $19.99/100 grams. That would be $90.75 / lb. I was amazed that the nuts weren't guilded or locked in a safe. I bought one mid-size nut and paid a dollar for it. When I asked about why, the proprietor didn't know, but said that mace--the spice obtained from dried covering of the nutmeg fruit seed--was so expensive that his distributor wouldn't even carry it, as no one could afford to buy it.

Mace is the red covering the nutmeg seed above


Turns out, nutmeg has been experiencing bad crop years in India. From 2009 to 2010, crop yields fell 50-60% and the price rose from Rs 120-135 to Rs 180-200. Again by 2011, the Hindu Business Line reported:
The prices of nutmeg and mace continued to soar on short supply in the domestic and international markets.
Unfavourable weather in growing countries such as Sri Lanka and Indonesia reduced the output last year and harvesting is reported to be delayed in Sri Lanka this year due to untimely rains, trade sources here said.
Meanwhile, industry sources claimed that in India “unseasonal rains have destroyed the flowers hence, 30 per cent shortage is expected in the coming 2011season.” According to them, there is a likely shortage in Sri Lanka also in the coming seasons due to unseasonal rains and hence prices are expected to move up further.
Decline in output in supply sources has pushed up the prices of mace to Rs 1,700-2,000 a kg here depending upon the quality/colour, they said.
Farm grade nutmeg with a shell is ruling at Rs 425-450 a kg while that without shell is at Rs 700 a kg and above, they said.
Indian output of nutmeg with shell is estimated at 13,000 tonnes and when the shells are removed it would come to about 9,000 tonnes.
 So "unseasonal rains" have pushed the price from Rs 120/kg to  Rs 700/kg in the course of a couple of years. There was also some profiteering by producers not shipping crops as the price was appreciating daily.
But the whole "unseasonal rains" thing is the issue that should concern us most. Russia has seen "unseasonable non-rains" in the last couple of years--leading to shutting down wheat exports a couple of years back to ensure a sufficiency for the country--as well as wildfires and heat deaths among the population. Global climate change is here, and its a bastard. 15,000 warmest day records fell this past winter across the US. Canadians should not be relying on food from anywhere else, but rather concentrating on producing as much as possible locally. That way there might be food from away when we need it most, when the "unseasonable rains" happen here.

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