24th June 2013
The recent court decision in India to temporarily ban the import of white poppy seed, has caused chaos in the fragile trade between sellers ( Turkey ) and buyers ( India ). India in a normal year, can import up to 15 to 20,000 mt, so is essentially the only major buyer of White Poppy Seed internationally.
The stats are roughly:
2012: 4000 mt produced with a 15,000 mt carry over from 2011
2013: 30,000 mt produced with a 5,000 mt carry over from 2012
So this year’s crop is huge, as everyone planted last year due to very high prices. Prices 6 weeks ago were roughly $5500 pmt CF Nheva Sheva. Today traders in Turkey are offering around $3500 to $3650 pmt CF, a fall of about 35% in a few weeks.
It is reported that there are “hundreds” of containers in Indian ports unclaimed and with resultant serious difficulties between sellers & buyers.
When I asked traders what they think will happen, they are betting on the Indian courts allowing material in again. In the scenario of the courts allowing trade to flow again, prices are unlikely to move upwards as the crop is enormous and stocks are very high.
Watch the space…