Cardamom market is trading weak and is under pressure due to good auction arrivals.
The market has lost Rs 50 a kg as arrivals at the auction houses were better than expected. India is the second-largest producer of cardamom in the world producing after Guatemala and the biggest consumer of the spice. Guatemala leads with 60-66% of the world production but has seen production come down in the past few years due to natural disasters like flood. The average realization on Tuesday?s auction stood at Rs 570.81 a kg on a day when 67 tonne of the commodity came up for sale.
?Arrivals are better than expected and this has surprised the market, which was estimating lower production due to rain-led damages. Rains were excessive in Idukki and some damage to cardamom plants occurred during June and July,? PC Punnoose of Cardamom Processing Marketing Company (CPMC), Kumily, told FE. Punnoose feels the crop would have been a bumper if not for the excessive rains in June and July.
Cardamom plants are very sensitive to rains with productivity directly related to the volume of rains and number of raining days. 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. Idukki received 47 % excess rain from the southwest monsoon this year.
Several experts and planters are now speaking about underestimating production.
Many feel the annual production in India would be near 20,000 tonne given conducive environment. ?Several farmers are now focusing on cardamom as they get income after every 45- 50 days when compared to coffee or pepper, which is an annual crop. In the past most farmers in Idukki were having some bushes of cardamom in the land but were focusing on other crops. Now, they are dependent on cardamom as they find it lucrative and responding to care better than other crops,? Punnoose added.Arrivals at the auction centres also confirm the theory of higher production. Arrivals on several days have crossed 100 tonne as against 40-50 tonne recorded earlier.
Kerala is the maximum contributor of cardamom to the country having a share of around 70% in the total productionwith Idukki accounting for the lion?s share. The state-run Spices Board estimates production of cardamom in the last fiscal at 12,420 tonne. The production during 2011-12 is estimated to be as high as 15,000 tonne.