High demand from up country buyers and increased exports to West Asia has pushed up prices by 30-40% in just two months. Auction prices of cardamom are averaging above Rs 750 per kg in the last few auctions. Maximum price at the auctions touched Rs 880 per kg on Tuesday, traders said.
Festival and winter demand is very good and this has helped the market to remain firm despite good arrivals, sources in the Kumily Cardamom Processing Marketing Company (CPMC), told FE.
Arrivals had almost doubled since October, when supplies were low because of poor rains. At the CPMC auction on Wednesday, arrivals touched 81 tonne and on Tuesday, around 75 tonne of cardamom were traded at the auction conducted by South Indian Green Cardamom Company.
Imports from Guatemala, which tend to depress the domestic market, have been almost nil in the last 2 years.
Rains and floods in the cardamom producing regions of Guatemala have kept global prices on the higher side.
In the past, higher domestic prices in India always led to higher imports from Guatemala, as global prices constantly stayed at a discount when compared to Indian prices. Indian prices are usually more than the global markets because of strong domestic consumption.
Reports indicated that India imports around 300-500 tonne of cardamom annually, which helps in limiting the domestic price. The global shortage has also helped in more exports from India. Exports during the month of October were almost 400% more than the same period last year, while they were around 100% more than the previous month, Spices Board sources said.
Price realisation were also around Rs 54 per kg more than previous years, sources added.
Most trade and industry sources are still uncertain about the final output, with one group saying that output would just around 2007-08 levels, while the other predicting that production this year would be higher because of increase in realisation.