Over the past year, inclement weather has cast its shadow on the inflation trajectory, impacting not only essential kitchen commodities but also gourmet superfoods preferred by the health-conscious and affluent. The combination of drought in Europe and Bihar has led to an astonishing 80% surge in the prices of olive oil and makhana (fox nuts) within a year, with anticipations of further increases in the days ahead.
Turkey, the world’s largest producer of olive oil, recently imposed an export ban, contributing to a global shortage of olive oil and consequent price firmness. As India satisfies its olive oil requirements through imports, these supply disruptions are expected to persist. Makhana, a traditional eastern Indian delicacy prepared by popping gorgon seeds, has witnessed a remarkable surge in popularity, especially since the onset of the COVID-19 pandemic, among high-spending consumers nationwide. However, makhana prices have soared by 70% at the factory gate in the past two months due to extreme heat leading to the drying of artificial ponds used for cultivation.
Akshay Modi, a representative of the Solvent Extractors’ Association, noted that retail prices of olive oils have escalated by approximately 70–80% year-on-year, with a 20% increase over the last two months. Furthermore, he projected an additional 40% price surge in the next two months for the extra virgin and extra light categories, while the pomace category is relatively stable. The maximum retail price of leading brands of extra virgin olive oils on online platforms ranges from Rs. 1,000 to Rs. 1,400 per liter.
India annually imports around 13,000 tons of olive oil across all grades. However, the disruption in Turkish supplies is expected to sustain upward pressure on global olive oil prices. High import duties and rising origin prices have maintained steady imports in recent years.
The popularity of makhana surged post-2017 as prices of the seeds increased three- to fourfold, reaching an all-time high of Rs. 22,000 per quintal. Subsequently, many paddy farmers switched to makhana cultivation in artificial ponds due to the enticing returns. Nonetheless, prices plummeted to Rs. 3,500 per quintal in November last year, causing around 25% of farmers to transition away from makhana cultivation.
Unfavourable weather conditions, particularly the lack of pre-monsoon showers and excessive heat during the summer, have severely affected makhana cultivation in Bihar. This may result in a production reduction of nearly 50%, significantly impacting prices. Retailers such as Tata and Reliance are now major players in the branded makhana market. Demand for makhana peaks between August and December due to its popularity as a snack, its traditional use as a prasad during festivals in North India, and its incorporation into high-end wedding menus.