Global Economy

Indian saffron's international prices skyrocket after Afghan supply hit by Taliban takeover


The price of Indian has skyrocketed in the international market after the Taliban crisis hit Afghanistan’s export of the world’s most expensive spice.

A kilo of Indian saffron is now available for Rs 2.25 lakh, having vaulted from Rs 1.4 lakh per kg a few months ago.

Saffron is grown in four districts in Jammu and Kashmir– Pulwama, Budgam, Srinagar and Kishtwar. Among them, Pulwama district’s Pampore has earned the title of Kashmir’s “saffron town” for growing the best quality saffron.

The Kashmir valley produces 12 metric tonnes of saffron, which is used in food, perfume, dyes and for medicinal purposes.

“Saffron producers (in India) are flooded with enquiries from the US, Belgium, New Zealand, Canada and the Gulf nations,” Mohammad Qasim Ghani, joint director, agriculture extension, Kashmir, told ET. “Prices have moved up to Rs 2.25 lakh per kg. All exports are happening using the online platform.”

According to Ghani, the National Saffron Mission has resulted in yield of the crop going up to 4.5 kg per hectare, from 1.8 kg per hectare a few years ago.

“Our target is to increase the yield to 7-8 kg per hectare and bring an additional 37,000 hectares under saffron cultivation,” Ghani said.

Afghanistan had been making strides in saffron cultivation, which began in the country in 2010. Exporting this valuable crop to foreign markets, paved the way for the country to become the third-largest saffron producer in the world, behind India and Iran. But the Taliban’s takeover of power in Kabul has stalled the country’s exports several commodities, including saffron.

Saffron and dry fruit traders from the Kashmir valley said that only 10% of the saffron produced in the valley is used in the domestic market. The domestic demand is met through saffron from Iran and Afghanistan.

The Afghan crisis has also pushed up the price of Iranian saffron in India.

“Iranian saffron prices, too, have become expensive by Rs 30,000 per kg in the Indian market since the supply side from Afghanistan dried up,” said Nisar Ahmad Dar, cofounder of Pampore-based Al Ansar Saffron & Dry Fruits. “Asafoetida prices have gone up by 30%, whereas prices of figs that come from Afghanistan as dry fruits have gone up by Rs 300 per kg.”

India annually imports 36,000 tonnes of dry fruits and spices.

Afghanistan has seen bumper dry fruit production this year and exporters are in constant touch with Indian buyers despite the situation in that country, Indian dry fruit importers said.

Exports of dry fruits and spices from Afghanistan start in September, just before Diwali and the festive season in India. This is the time when companies too start buying dry fruits for gifting purposes.

Being a signatory to the South Asian Free Trade Area, imports from Afghanistan enjoy duty concessions in India with a maximum tariff of 5%. The tariff on consignments from other countries is in the 30-40% range.

“It is unlikely that the Taliban will put any curbs on exports of dry fruits to India, as it is a major revenue earner for the country,” said Vijay Kumar Bhuta, president of the Bombay Dry Fruits and Date Merchants Association. “We are hopeful that trade with Afghanistan will normalise soon.”



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