Let’s start with the facts – and they are quite simple: the gold price is determined by the quantity available, and the saffron price is the supply – the fact that you don’t find saffron anywhere close to the gold price, that there’s no supply – means that there’s far more saffron being used in jewellery making than there is saffron being mined.
But there’s another crucial fact too: saffron is the most expensive spice in the world.
In total, saffron is the 7th most expensive spice. The highest value is found in India, from the state of Gujarat, where, at the time of writing, the market value of a kilo of saffron is over £700. As you can expect, there’s not many places in the world that will pay that much for saffron on a daily basis.
How, then, can there be so much saffron being used in jewellery making?
The answer is – it doesn’t, obviously, all originate from India. Although it is a very popular spice, just 5% of India’s total exports come from the city of Patna, about 100 miles from Patna in Bihar. It’s not the best place to grow saffron, with heavy cultivation costs and very poor transport links, so it tends to get exported from elsewhere.
You might think these things should be obvious from the facts, but that’s not the case. We’ve discussed this before – you can see why this could have an impact on the price of saffron, but if you’re interested in learning more, here are some useful posts that will help you understand them.
The first is this – from the Guardian:
When India imported around 50 tonnes of saffron in 2011 – the equivalent of around one fifth of the UK’s annual quota – it exported £4m worth of saffron powder and £7m worth of saffron oil. That is, around 80% and 20%, respectively, of the UK saffron trade goes to India, while the rest is exported.
Of course, if you look at just the UK production, it’s actually down a lot – from about 3 tonnes in 2010 to about 1,200 tons in 2015.
One explanation for this is the low price of saffron. That £8 billion trade is worth around £18,000 per pound that’s traded in (rough
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