Ghee Prices Explained
Ghee prices constantly increase yearly as its market expanded slightly by 2.7% from the previous year. Generally, its total consumption record has an annual average growth rate of +5.1% over the last decade.
Its market potential stems from its availability and high nutritional value.
Why are ghee prices fluctuating?
1. Nutritional Benefits
The rising consumer awareness and its health benefits propel the fluctuating ghee prices.
This commodity is common among Indian and other South Asian cuisines due to its higher smoke point, less toxin properties, and stable shelf life due to low moisture content.
Additionally, the emergence of specialized ghee brands catering to specific dietary needs or preferences introduces its price segments in the market.
2. Regional Factors
The production of ghee largely comes from key concentrated geographies.
For instance, ghee from cow’s milk dominates the market owing to the popularity and significant role of cow’s ghee in various Ayurvedic medicines.
This practice highlights the importance of ghee in the Indian diet as it stimulates digestion and nourishes body tissue. Thus, the country’s consumption preference openly affects its prices.
3. Rising Demand for Healthy Cooking Oils
Consumer preferences constantly shift towards healthier and more natural cooking oils, thus gaining ghee demand and prices in this trend.
This commodity is a smart alternative to vegetable oils due to its higher concentration of monounsaturated and polyunsaturated fats, which are associated with various health benefits. Overall, the rising need for ghee puts upward pressure on its prices.
4. Fluctuation of Milk Production
Milk production is the foundation of ghee production. Thus, its price depends on the value variation of milk, this comes from cows’ milking capacity, weather conditions, and feed availability.
Similarly, the cost-specific manufacturing condition adds figures to its prices and market availability.
Milk Procurement: Milk procurement accounts for the largest portion of ghee production costs, typically ranging from 60% to 70% of the total cost.
Labor: Labor costs for ghee production include expenses for milk collection, processing, packaging, and transportation. This contributes to 10% to 15% of the total production cost.
Energy: The expenses for heating, cooling, and machinery operation amount to 5% to 10% of the entire value.
Packaging: Containers and labels add 5% to 8% of the manufacturing cost breakdown.
Which variables impact the price of ghee?
- Nutritional Benefits
- Regional Factors
- Rising Demand for Healthy Cooking Oils
- Fluctuation of Milk Production
- Weather Condition
Where does ghee come from?
Ghee is essentially butter that undergoes a simmering process to remove its milk solids and water content, resulting in a pure, clarified form of butterfat.
Additionally, this transformation not only enhances ghee’s shelf life but intensifies its flavor profile, imparting a distinct nutty aroma and a higher smoking point.
The Production Process of Ghee
Its manufacturing process is simple yet elegant, requiring only two ingredients: butter and time.
The traditional method, known as bilona, involves simmering butter in a heavy-bottomed pot over low heat until the milk solids separate and form a golden sediment at the bottom.
Additionally, it takes anywhere from 20 to 45 minutes, depending on the quantity of butter. As it simmers, it goes through a series of transformations.
Initially, a foamy layer forms on the surface which skimmed off as it accumulates. Gradually, the milk solids turn from white to a light brown color, indicating the completion of the simmering process.
Once it reaches the desired color and aroma, it is carefully strained through a fine-mesh cheesecloth to remove any remaining milk solids. The clarified ghee is poured into clean jars or containers and allowed to cool until it solidifies into a pale yellow oil.
Top Applications of Ghee
Ghee is a versatile ingredient with a rich history and culinary applications. Here are the top uses of ghee:
1. Cooking and Sautéing: Its high smoke point of 485°F (252°C) makes it an ideal choice for high-heat cooking, sautéing vegetables, searing meats, and even deep-frying. Moreover, its flavor adds a rich and nutty depth to dishes without burning.
2. Baking and Desserts: Ghee’s unique flavor makes it a popular ingredient in baking and desserts as it provides a richer flavor and texture to cakes, cookies, pastries, and Indian sweets.
3. Health Benefits: It contains conjugated linoleic acid (CLA), a fatty acid associated with potential health benefits such as weight management, reduced inflammation, and improved immune function.
4. Skin and Hair Care: It’s incorporated as a traditional ingredient in Ayurvedic medicine for skin and hair care. Additionally, its moisturizing properties nourish and protect the skin while its application to hair helps it shine and manage dryness.
5. Flavor Enhancement: Ghee’s rich flavor enhances the taste of various dishes, particularly curries, dals, rice, and Indian sweets. Furthermore, it adds a unique dimension to savory and sweet preparations.
6. Roasting and Grilling: Its high smoke point makes it suitable for roasting vegetables and meats, imparting a rich flavor and preventing burning. Additionally, it enhances the aroma and flavor of grilled foods.
7. Preserving Aromatics: Also, it’s used to preserve aromatics like onions and garlic, intensifying their flavor and fragrance. Moreover, it can be infused with dried herbs and spices for a more complex flavor profile.
Presently, ghee comes from India, Pakistan, the United States, New Zealand, and Germany.
What is the future price of ghee?
Ghee prices currently vary depending on the purity, brand, and region. Generally, its prices have shown a steady upward trend in recent years, driven by increasing demand and supply chain disruptions.
According to data from market research firm MarketsandMarkets, the global ghee market will grow at a CAGR of 11.12% in 2030. The top ghee-consuming countries in 2022 were India, Pakistan, and Bangladesh.
Additionally, major ghee-producing regions such as India and Pakistan are likely to experience moderate price increases. However, prices in importing regions such as North America and Europe will experience significant increases due to transportation costs and import tariffs.
Overall, market analysts predicted that its prices will reach an average global price of $12 to $15 per kilogram by 2030.