Nutmeg prices soar

ST GEORGE'S, Grenada (CMC):

THE GRENADA Cooperative Nutmeg Association (GCNA) has said it intends to cash in on increased prices for nutmegs on the world market as a result of an international shortage.

GCNA Chairman, Denis Felix, said the industry is now in the process of negotiating a new round of contract prices with buyers and all indicators are that the island would receive higher prices for the commodity.

"The prospects on the international market for Grenada's nutmegs are exceedingly good. In fact it, probably, has not been better," he said.

Grenada and Indonesia dominate the world nutmeg industry but declines in production, plus the prospects of new rivals on the market, have conspired to push up prices, local officials have said.

Supply shortage

"There is a shortage of supply. We are unable to meet the demand for our nutmegs. The supply cannot match the demand and prices are likely to be a bit higher than ordinary," Felix said.

"That's why it is so important for us to place emphasis on production, because the more nutmegs we produce now the more revenue we can generate for the association and the more foreign exchange we can generate."

He said there were indications that even Indonesia, the world's largest producer, was experiencing some difficulties as well, in terms of production.

Competitive advantage

"We believe that the nutmegs produced in Grenada have a competitive advantage on the international market in terms of its quality level and, therefore, even though nutmegs are available from other areas the demand for Grenada nutmeg continues to be high," Felix explained.

Grenada, which sells its nutmegs mostly to buyers in Europe and North America, is currently producing 1.5 million pounds of nutmegs compared to 12 million pounds before the passage of Hurricane Ivan six years ago, while revenues have dropped from EC (Eastern Caribbean) $15 million (US$5.5 million) to two million dollars (US$740,700) a month.

In addition, half the 5,000 farmers who were engaged in the industry before the hurricane are still engaged in growing nutmegs, officials have said.