The cardamom market is likely to rally higher due to robust demand and lower production, traders said. Market prices crossed the Rs 1,000 per kg level in the last auction conducted on Friday, where 53 tonne was traded. India is the second largest producer of cardamom in the world after Guatemala and the biggest consumer of the spice.
“Cardamom futures are trading with a positive bias because of rising demand from stockists and good exports. Lower output estimates due to unfavourable weather conditions in the Idukki district in Kerala also supported prices of the spice,” Vishidha Vijayakumar of Geofin Comtrade said. Spot prices at the MCX counter on Friday evening showed Rs 1,189.10 per kg, while the auction platform of the Spices Board recorded Rs 1,123.19 per kg average price on the same day in the auction conducted by State Trading Corporation.
India’s Production is likely to fall by 30-40% in 2016-17 due to unfavourable weather conditions, Vishidha said. “Prolonged dry weather occurred in the Idukki district, which has severely affected yield of the crop, which was in the flowering stage at that point of time. In many cases, the plants have been partially or fully destroyed due to the dry weather, as many plantations in the region do not have irrigation facilities,” Geofin sources added.
Cardamom plants are very sensitive to rains, with productivity directly related to the volume of rains and the 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. The Spices Board had reported in June that cardamom crop loss due to deficient rainfall and high temperature is likely to be up to 20-25% during the 2016-17 crop season. Damage to plants in Idukki due to drought-like conditions is 5-10%.
Board data shows production of small cardamom during 2014-15 pegged around 18,000 tonne from 69.970 hectares. Exports of cardamom during 2015-16 are pegged at 5,938 tonne as compared to 4,371 tonne during 2014-15.