The market was seen moving around the R500-600 per kg range for most part of 2013 due to good production. In the past few days, auction prices have moved up to R700-750 range as traders expect supply to decline sharply in the days to come.
India is the second largest producer of cardamom in the world after Guatemala and the biggest consumer of the spice.
Guatemala leads with 60-66% of world production but has seen the output come down in the past few years due to natural disasters like flood.
Picking of raw cardamom has come to end in most plantations. Farmers had six rounds of picking as the crop was early this season due to good weather. Supply will drop sharply and we expect this season to be a period where we will have no supply of cardamom. For the past three years, cardamom supply and auctions were round the year, unlike in the past where there was a monsoon break, PC Punnoose of Cardamom Processing Marketing Company (CPMC), Kumily, told FE.
Punnoose feels the crop would have been bumper if not for the excessive rain in June and July.
Cardamom plants are sensitive to rain with productivity directly related to the volume of rain and number of raining days.
The state-run Spices Board estimates production of cardamom in the last fiscal at 12,420 tonne.
Production during 2011-12 is estimated to be as high as 15,000 tonne.
Several experts and planters are now speaking about underestimation in the production of cardamom. Many believe annual production in India would be near 20,000 tonne, given conducive environment.
Auction volumes were very high this season and there were days when the volume crossed 100 tonne. Farmers did not hold the crop, unlike the past years and they received good returns. Stocks with them are minimal, Punnoose added.
Exports for the first eight months of the fiscal are seen higher by 38% in volume at 1,805 tonne as against 1,309 tonne during the same period of the last fiscal.
Value realisation is also seen higher by 22% at R144 crore. During FY12, exports stood at 4,650 tonne, valued at R363.22 crore.
Export quality cardamom is also on the lower side and total exports could slow down in the remaining months of the fiscal.
Punnoose believes the market could remain steady at this level or move up due to lower arrivals.