Guatemala curbs cardamom price as sales weaken
GUATEMALAN cardamom prices have declined of late amid lower demand from key buyer the Middle East and a decline in speculative activity.
A Rotterdam-based trader said that as a result of lower demand, prices have been corrected downwards by between five and 10% for the different grades.
For jumbo whole green cardamom he indicated a price of $15.50 a kg c&f, with seeds at $8.50 a kg.
The overall category of whole green cardamom encompasses those that are bold green in colour as well as a grade that is of a pale green shade. The bold green type commands the premium over the pale version.
Andrew Barker, managing director of PBA Brokerage, in early March correctly predicted that over the next four to five months cardamom seeds and mixed yellow quality from Guatemala and India would fall in price on ample stocks ( , March 9, 2012). Mr Barker said that between September and November India sold a large volume of its whole green cardamom to the Middle East, ahead of the exporters in Guatemala.
The Rotterdam trader.“The market is rather stable. There had been some activity during February and March mainly on account of heavy demand from the Middle East. At the end of April into early May the market started to settle down because there was not demand from the Middle East anymore.”
Quality supplies scarcer
A second trader based in London added that it is currently harder to find high quality cardamom than the lower grades. “From my experience at the moment, I’m going round the market trying to find some good cardamom and there is very little in Europe. Availability of the good quality has been less than the lower grades,” he said.
The Rotterdam trader observed that Europe is a small market for cardamoms and so doesn’t have too much of an impact on prices.
In February and March, loftier prices had encouraged speculators from India and Guatemala to become more involved in the market.
However, activity in the second quarter is said to have declined. “They are not so much involved now. If the speculators were involved then the prices would be at much higher levels just like we saw last year and the year before when prices jumped by 300%,” said the first trader.
He noted that since last year, cardamom prices have fallen substantially from their highs. “They have fallen somewhere between 30 and 40% for whole green cardamom and around 50 to 60% for the lower grades.”
The London trader added: “What has happened is that people who were packing something good when the prices went up, saw (their product) drop down a couple of grades because it wasn’t that noticeable and it was slightly smaller in size and they were still able to fulfil contracts and sell to people.”
He said that many buyers didn’t notice this. “Prices were double, so I think that the market, when it did move, caught people napping.”
The consensus is that cardamom prices should remain stable in the coming months.
Furthermore, the Rotterdam trader predicted that speculators would not become involved in the market again for another two or three months. “Speculators have not entered into the market and will not until the new season starts in September/October,” he remarked.
