There are reports that cheaper and low-quality cardamom from Guatemala has reached Mumbai and Chennai ports. Last year, 603 tonne of cardamom was imported and reports suggest it would be higher this year. Guatemala does not consume cardamom and they want to sell the commodity before the next crop, KK Devassia of Cardamom Growers Association said. On Monday, the average auction price stood at R682.53 per kg on an arrival of 8 tonne.
The market is moving to reports of cheaper imports. Farmers are holding stock in anticipation of a price gain due to unfavourable weather. Production will be lower and we have very good domestic demand, but we dont know the volume imported, PC Punnoose of Cardamom Processing Marketing, Kumily, told FE.
Lower rains in the cardamom-producing regions of India during 2012-13 led to widespread damage to cardamom plantations. Production this year is estimated to be 40-50% lower than normal.
Fundamentally, the market could have moved up due to unfavourable weather for the second consecutive year. Most traders have factored in lower production and are holding stocks. But imports could change the dynamics, Punnoose added. In the past, higher domestic prices in India always led to higher imports from Guatemala. Cardamom prices had reached a record high of R1,950-2,000 per kg during June 2010 due to shortage of the commodity.