Kesar prices reach Rs 4.95 lakh/kg in retail amid Iran tensions

Geopolitical tensions in West Asia have led to a drastic reduction in saffron imports from Iran, driving up Indian saffron prices by more than 20% wholesale and 27% retail, reaching Rs 3.5-3.6 lakh per kg. Despite its renowned quality, Kashmiri saffron confronts production hurdles, witnessing a significant output decline despite receiving a Geographical Indication (GI) tag. Pollution from new cement factories in Pampore and unpredictable weather conditions exacerbate the situation.

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The saffron market, often associated with opulence and rarity, is undergoing a significant upheaval as geopolitical tensions in West Asia disrupt traditional supply chains. With Iran, a dominant force in saffron production, facing challenges amidst escalating tensions, Indian producers and traders are seizing the opportunity, witnessing a remarkable surge in demand and prices.

Indian saffron, primarily cultivated in the picturesque valleys of Jammu and Kashmir, has emerged as a frontrunner in the wake of Iran’s dwindling supplies. Producers and traders report a staggering increase of over 20% in wholesale prices and an even higher surge of 27% in retail stores over the past month alone.

The impact of this shift is palpable in the markets, where the best quality Indian saffron now commands prices ranging from Rs 3.5 to 3.6 lakh per kilogram at wholesale, compared to the previous rates of Rs 2.8 to 3 lakh. Retail prices soar even higher, reaching an astounding Rs 4.95 lakh per kilogram, equating to nearly 70 grams of gold at current rates.

Noor ul Amin Bin Khalik, owner of Amin-Bin-Khalik Co in Srinagar, elucidates on the dynamics at play, stating, “Absence of Iran in the global markets has pushed up the Indian saffron prices. India also imports saffron from Iran. That too has trickled down after the geopolitical tensions started. Prices are going up almost every day.”

While Indian saffron has always been esteemed for its quality, the recent surge in demand has spotlighted its superiority even further. Kashmiri saffron, with its coveted Geographical Indication (GI) tag, stands as a hallmark of excellence. However, despite its acclaim, production struggles to meet the burgeoning demand, amounting to less than a third of the required output against an annual demand of 60-65 tonnes.

Nilesh P Mehta, a seasoned veteran in the saffron trade, reflects on the unprecedented spike in prices, attributing it to a confluence of factors. “The Middle East tension, coupled with lower production, has impacted the prices of saffron… Also, the GI tag has made Indian saffron costlier in the world markets,” he notes.

The decline in saffron production is not unique to India; it’s a trend observed globally. Union agriculture and farmers welfare minister Arjun Munda highlights the dwindling output, citing a decline of about 67.5% in saffron production in Jammu and Kashmir over the past decade. However, amidst this gloomy scenario, a ray of hope emerges as saffron production marginally increases by 4% in the past year.

Yet, this optimism is tempered by the challenges faced by saffron cultivators in the region. Senior trade officials, speaking on condition of anonymity, attribute the fall in production to the emergence of new cement factories in Pampore. The dust and pollution emanating from these factories pose a grave threat to the delicate saffron flowers, rendering vast tracts of land unsuitable for cultivation, thereby affecting both quantity and quality.

As the saffron fields of Jammu and Kashmir navigate through tumultuous times, the resilience of Indian producers and traders shines through. In the crucible of geopolitical tensions, Indian saffron emerges as a beacon of stability and prosperity, charting a course towards a brighter, more lucrative future.