The cardamom market is likely to remain firm on lower imports and robust demand. Domestic arrivals are nil and traders are holding to the stocks in anticipation of rally. Harvest of the new crop is expected only by August and export demand from West Asia is likely to support the market, traders said. India is the second-largest producer of the spice in the world, after Guatemala, and the biggest consumer.
The market is likely to remain firm because harvesting came to a halt by March in most plantations, PC Punnoose of Cardamom Processing Marketing Company (CPMC), Kumily, told FE. “The cardamom region did not receive any rains from January and the drought-like conditions spread concern on the health of the plantations. For the first time in the recent past, harvesting had to be halted because of nil summer showers,” he added.
Cardamom prices touched R750 per kg in the first week of May and dropped by R50 per kg as the state saw some rainfall later in the month. However, Punnoose estimates the market will stay steady as no arrivals are expected till August.
Supply has dropped sharply and with lower imports, the market could rally higher, KK Devassia of the Cardamom Growers Association said. Imports from Guatemala, which could depress the market, is reported to be absent because of lower production in that country. Higher, domestic prices always leads to higher imports from Guatemala, as the global prices constantly stay at a discount when compared to the Indian prices.
He estimates the next crop to be good if the reports of a good monsoon are correct. “Farmers have protected their plants by irrigating and providing proper shade as the returns from cardamom is now better, compared with pepper and rubber,” he added. 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.
Traders expect exports to be higher this season for the Ramadan festival with production reported lower in Guatemala. Exports from India had declined due to the premium on Indian cardamom compared to the Guatemala crop. India lost its traditional markets like Kuwait, Japan and Oman to Guatemala, while retaining Saudi Arabia.
Cardamom prices had reached a record high of Rs 1,950-2,000 per kg during June 2010 due to a shortage. A major reason for the record price during 2009-10 was lower production competing Guatemala.