Farmers were holding stocks expecting prices to move up. Now they realise that the prices may come down as demand wanes from North India. They are selling more cardamom, PC Punnoose of Cardamom Processing Marketing Company (CPMC), Kumily, told FE. Correspondingly, prices have dropped below R1,000 per kg and is facing downward pressure, he added.
On Tuesday, the average prices declined to R893.57 per kg from R959 recorded on Monday. Cardamom prices had reached record high of R1,950-2,000 per kg during June 2010 due to shortage of the commodity in the global market driven by lower production in Guatemala. Imports from Guatemala, which tend to depress the domestic market, have been almost low during the last two-year.
Traders fear that demand may decline from up-country buyers as summer peaks. High prices and problems in West Asia also add to the problems faced by exporters.
We might see continuous arrivals of cardamom as we go for an early harvest of the new crop. Earlier cardamom supply used to be restricted to eight months, PC Punnoose said. Rains in the cardamom growing regions of Kerala indicate an early crop for the next season, he said.
Good rains in the coming days might result in the new crop coming by June. This might upset the stock and availability, he added.
Auctions for the new crop usually starts in August after the Monsoon break taken by the auction centers.
K Satheesh Babu of Agricultural Market Intelligence Centre of Kerala Agricultural University said, Speculators have taken over the entire cardamom market. Spot price at Puttady and Bodi E Auctions are determined by the futures price.