Cardamom prices to increase on demand & unfavourable climate

Written by Rajesh Ravi | Kochi | Updated: Feb 24 2012, 06:23am hrs
Cardamom prices are seen firming up due to robust demand and reports of unfavorable climate in the producing regions. Prices have pulled back from the lows aided by declining arrivals. Exports are also on the higher side as compared to the past.

Cardamom producing areas in Kerala have not received any summer showers during the current season. 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. KK Devassia of Cardamom Growers Association feels that further delay in rains could lead to an abrupt ending of the current season and delayed beginning of the next season.

The rains would be a critical factor in the cardamom market. Delayed rains or lower rains tend to damage cardamom plants leading to lesser yield. The next crop would be lower if rains are delayed, K Satheesh Babu of Agricultural Market Intelligence Centre (AMIC) of Kerala Agricultural University said. The current production (2011-12) could be as high as 15,000-16,000tonne trade sources said. Spices Board estimates Indias production in 2010-11 to be 10,350 tonne, which is almost the same as 2009-10 s figures. Good summer rains and conducive environment in the cardamom growing Idukki district during 2011 helped in continuous and higher arrival of cardamom in the market.

Arrivals are declining and are now almost 50% lower when compared to the peak of 90-100 tonne. The fundamentals support the market and we may see it firming up, Satheesh Babu said.

As on Thursday evening the average for the auction conducted by Header Systems, Nedumkandam stood at R671.79 per kg. During January, the average price for one kg of cardamom had dipped to R450. Cardamom prices reached a record high of R1950-2000 per kg during June 2010 due to shortage of the commodity. A major reason for the record price during 2009-10 was lower production in competing Guatemala.

Demand for the commodity has been extremely good in the current season. North Indian buyers have been very active and exports are also on the higher side. Pakistan has also imported cardamom from India. Normally it is smuggled through the land route, Devassia said.

Exports from India had declined due to the premium on Indian cardamom compared to the Guatemala commodity.