Bearish sentiment pulls down Indian cardamom prices

PRICES of cardamom have witnessed a declining trend in major Indian markets, particularly Kerala, following sufficient summer rain in the growing areas, which has boosted expectations of a good crop.

Bearish sentiment at the auctions saw average prices initially dropping from Rs1,175 ($26.35) a kg to Rs1,140, and further to Rs1,116 a kg on Monday at the auction held in Bodinayakannur.

The individual auction average vacillated between Rs1,130 and Rs1,175 a kg in the week ending April 30, resulting in slack demand as buyers stayed away.

Exporters also kept away from the market as prices ruled consistently above the psychological barrier of Rs1,100 per kg. A few upcountry traders covered whatever quantities arrived at the auction.

At the same time, arrivals have thinned out as the harvesting has come to an end. Lower arrivals could conceivably lead to auctioneers suspending auctions in future for want of sufficient volumes to make them viable.

Buyers also feel that, since the growing areas have received adequate summer rains, the gap between now and the arrival of the next crop would be reduced; and, until then, they could manage with the stocks already with them. This could well result in sluggish demand.

On the other hand, limited supply might help individual auction average prices to stabilise in the range of Rs1,050 to Rs1,100 a kg in coming days. Supply from Guatemala, the only other major global source, has been negligible owing to a poor crop there.

Total cardamom arrivals during the current season from August 1 stood at 8,946 tonnes, of which 8,748 tonnes have been sold – a very high percentage, according to traders. Arrivals and sales during the same period last season were 9,019 tonnes and 8,467 tonnes, respectively.

The maximum price secured at the auction was Rs1,300 a kg and the minimum Rs781 a kg. The weighted average price (as on May 3) during the current season increased to Rs824.34 a kg from Rs521.98 during the same period last year.

“We feel prices are likely to rule at above Rs1,000 per kg in the next season as demand is likely to outweigh supply,” said P C Punnoose, general manager of the Kumily-based Cardamom Processing & Marketing Company. “With economic growth in the country, there has been consistent growth in cardamom consumption.”

Prices quoted at Vandanmeedu for graded varieties on May 3 were: AGEB Rs1,265 to Rs1,275 a kg; AGB Rs1,210 to Rs1,220 a kg; AGS Rs1,200 to Rs1,205 per kg; and AGS1 Rs1,180 to Rs1,190 per kg.