Cardamom prices likely to remain firm on tight supply

Cardamom is expected to trade firm on robust demand and tight supply. Unusual rains in December in the hill ranges of Kerala are likely to lead to lower yield in the coming rounds of harvesting.

India is the second largest producer of cardamom in the world after Guatemala and the biggest consumer of the spice. Guatemala leads with 60-66% of the world production but has seen production come down in the past few years due to natural disasters like flood.

KK Devassia of Cardamom Growers Association feels that the market is fair to the farmers after several years largely due to good domestic demand. He estimates the market to remain firm in the coming days.

On Monday evening, the average auction price stood at R786.44 per kg when 20 tonne were traded at the Spices Board auction centre.

“Unfavourable climatic conditions, disease and anticipation of lower production for the present crop season amidst good export demand buoyed the markets. Heavy rains in the cardamom growing areas in Kerala had initially raised worries over production and crop for the current season is expected to be slightly lower compared to last year,” Anu V Pai, analyst with Geofin Comtrade told FE.

Cardamom plants are very sensitive to rains with productivity directly related to the volume of rains and number of raining days. Cardamom needs low temperature,high humidity and incessant drizzles. Heavy rains could damage the crop, while intermittent rains that keep the atmosphere humid augur well.

“Production from Guatemala is, too, anticipated to fall. Guatemalan cardamom production for the current marketing year is reported to be 20% lower compared to 2013. Looking ahead, even as this aromatic spice has been trapped in the lower price trajectory for long, it is expected to trade firm in the coming days and likely to continue so until the next harvest,” Pai said.

Devassia feels that imports into India from Guatemala have been low this year.

The state-run Spices Board estimates production of cardamom in the last fiscal at 12,420 tonne. The production during 2011-12 is estimated to be as high as 15,000 tonne. Several experts and planters are now speaking about underestimation in the production of cardamom. Many feel that the annual production in India would be near 20,000 tonne given conducive environment.

During the months of April-September 2014, 1,295 tonne of small cardamom was exported as against 1,442 tonne during the same period of 2013.

Source : financialexpress.com