FMCG cos can't digest Isabgol's price hike

AHMEDABAD: This may not be a perfect lowdown. Global consumers who depend on the psyllium husk (Isabgol) for a perfect morning bliss, may have to shell out a tad more.

Blame unseasonal rains in the western parts of India for it. Prices of Isabgol have bloated to a 40-year high in Unjha in north Gujarat as rains destroyed a significant portion of the psyllium seeds crop and created a supply gap.

“The current prices of Isabgol have touched nearly Rs 1,428 per 20 kgs from last year’s Rs 800. The current price is the highest in the last 40 years,” says Govindbhai Darji, a leading producer and exporter from Unjha.

Another producer Anil Shah says last year the total Isabgol seed production in the country was nearly 10 lakh bags (each bag weighs 75 kgs) and total exports were around 70%. Market experts estimate that this year the Isabgol produce could drop to 6-7 lakh bags.

India is the only producer of Isabgol and nearly 80% of it comes from Gujarat. Out of the total produce, about 70% is exported and Procter & Gamble (P&G) alone consumes about 40% of it. The second-largest buyer of Isabgol is Reckitt Benckiser. Reckitt-Benckiser and P&G, among other multinational giants, are therefore likely to face increasing price pressures as traders are recovering their losses through a price increase.

Ashwin Nayak of Arise Exports says, “With domestic prices shooting up, the export rates have also more than doubled to $4.5 a kg from $2 a kg last year.” These high prices have led to a sharp decline in orders from overseas markets like the US, UK, Germany and other European countries, he added. Usually, most multinational FMCG firms start placing orders by this time, but it is not happening this year.

P&G, the largest buyer from the Unjha market for many years, has so far not placed a single order according to local traders. The multinational player has been using Isabgol to make digestive medicines under its brand Metamucil. Similarly, other regular FMCG buyers like UK-based Reckitt-Benckiser, US-based Perrigu and Guardian Pharma have yet to place an order.

Unjha, Sidhpur, Palanpur in Gujarat and a few regions in Rajasthan are the main centres where Isabgol is grown. Isabgol is widely used in the West. It is a bulk forming laxative used as a natural remedy for constipation and regulates bowel function.