The worldwide slump in prices of primary commodities has claimed another victim -- the spice industry of the tiny Caribbean island of Grenada. A sharp decline in prices of nutmeg, of which Grenada is the world's second-largest producer after Indonesia, has triggered an economic crisis for the 'Spice Island'.
Any fluctuation in nutmeg prices massively affects Grenada's economy; more than a third of the population earns its livelihood by cultivating the spice. A nutmeg glut has resulted in prices falling from us $1.50 a pound (453 grammes) to just us $1 a pound this year. The finance ministry has had to cut the growth forecast from 2.5 per cent to 1.5 per cent. "The price reduction means that there will be less disposable income in the hands of farmers, resulting in diminished spending power and a fall in business activity," lamented finance minister Anthony Boatswain. Having earned us $20 million (m) from the nutmeg industry last year, Grenada had hoped to see the industry contribute us $5m more this year.
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