Cardamom prices set to touch record levels

Written by Commodities Bureau | Kochi, Jan 27 | Updated: Jan 28 2008, 05:07am hrs
Cardamom prices could touch record levels as supply thins down in all producing regions, traders said. Auction prices have almost doubled compared to the previous season and with the next crop months away, the rally could be very sharp, they said. Market analysts are also very bullish about the cardamom market and predict a firm trend in the short and long term.

PC Punnose of Cardamom Processing and Marketing Company (CPMC), Kumily, says that picking has ended in almost 65% of the farms with the rest of the product trickling in slowly. The arrivals have dropped by almost 60% compared to the previous season and average auction prices have doubled. In the last auction, the average price at Kumily was Rs 640 per kg compared to Rs 330 per kg in January 2007, he said.

Farmers estimate the cardamom production in 2007-08 (April-March) at around 6,000-6,500 tonne compared with 11,500 tonne a year ago.

Faiyaz Hudani, research analyst at Kotak Commodity Services Ltd., puts the outlook as bullish. Given the strong fundamentals the price could touch Rs 750 in the long run and in the downside, we see strong support at Rs 690. As on date, the exchange warehouses have less than 17 tonne of cardamom, he added.

Farmers are also worried that high prices could lead to more imports from cheaper origins. They are demanding a ban on cardamom imports as a decline in price could lead to lesser realisation for them. While some estimate that the price could rally further to new heights, others estimate that arrival pressure of Guatemala cardamom could depress prices.