Poppy seed prices may rise on poor supply .

Kochi, April 14 Limited availability due to lower imports and poor domestic crop may push up poppy seed prices in the domestic market to Rs 275–300 a kg in the coming days, according to market sources.

At the same time, the quality of the indigenous crop is inferior due to unfavourable weather conditions, they told Business Line.

Poppy seeds are imported with permits issued by the Gwalior-based Narcotic Control Board of the Central Government. Permits will be issued only from June.

The Board will first assess the current domestic crop, harvesting of which will be over in April, and then the total volume of poppy seeds imported till March 31, and its utilisation and balance quantity of stock held by the market. Then it will come to a conclusion about the quantity that can be permitted for imports to meet the estimated demand in 2010-11, trading sources said. Thus, there will be a gap of four months for the imports to arrive.

Inferior quality

In India, traders said, the “crop quality is bad. Also 40 per cent of it has been damaged due to last rains, so poppy seed markets are tight, and the prices will move up soon to Rs 350 a kg”.

According to them, this year Turkey crop will come in July. “It looks to be normal or below average due to the snow fall, which has created havoc in Europe,” they claimed.

Growing demand

The Union Government probably due to the growing demand for poppy seeds mainly for culinary purposes and to reduce the dependence on imported material, is said to have granted permission to double the area under the crop in the country.

The Centre restricted its cultivation due to misuse and violation of the rules under the narcotic control regulations.

Poppy seeds are grown in Madhya Pradesh, Rajasthan and Utter Pradesh.

Some 75,000 farmers are growing it in a total area of 6,900 hectares under licence from the Central Narcotic Board, Gwalior.

On restricting its cultivation in the country, official sources told Business Line that opium is produced from poppy and therefore “although the system of licensed poppy cultivation, sale and processing in India represents a positive use of natural resources that provides revenue to farmers and to the government, and cheap medicine to those who need it, certain areas remain problematic”.

Diversion is the biggest source of worry for government officers.

During harvests when the crop is damaged, the risk of smuggling can be very high. On average, it is estimated that as much as 20 per cent of opium produced by licensed farmers is diverted.

In Uttar Pradesh, diversion became clear after several cultivators produced almost double the crop of their neighbours. Although this difference was in part due to some farmers using more sophisticated farming methods, diversion of the crop was a clear factor in this situation. The Government and State control systems can thus identify problematic cultivators and take steps to limit diversion.

With approximately 72,500 farmers working on about 6,900 hectares, it is necessary to anticipate problems at every stage and secure the harvest through integrated local, the State Government and the Central Government control processes. The NCB, Gwalior, is strict on granting licence, they said.

Poppy cultivation under medicine schemes is undertaken in Uttar Pradesh, Madhya Pradesh and Rajasthan. In Uttar Pradesh, this policy has been highly successful in provoking economic diversification. “The profits from ‘Poppy for Medicine' projects in this region, which produces poppy harvests with particularly high morphine content, were invested into other crops and their industries, meaning that poppy farming is no longer the most profitable activity and opium no longer the preferential cash crop,” they said.

Since the indigenous production for poppy seeds is far below the demand the requirements are being met by imports, mainly from Turkey at high prices. Ever since the Centre has permitted imports from other countries growing poppy seeds legally the monopoly of Turkey has been broken, trading sources said.

The world poppy seeds production in 2007 was estimated at around 61,000 tonnes, excluding the output in India and China.

Source : Business Line