Cardamom market is seen firming up on robust demand and restrictions enforced by imposing a minimum import price...
Cardamom market is seen firming up on robust demand and restrictions enforced by imposing a minimum import price for the commodity.
As per the new notification issued by the Department of Commerce, cardamom can be imported only if the CIF value of cardamom is R500 or above per kg and on payment of import duty of 70% on CIF value besides meeting the quality standards specified under FSSAI. “The restrictions are not enough to stop imports. Farmers have been demanding a minimum value of R1,000 per kg. Imports depress the domestic market ,” KK Devassia of Cardamom Growers Association told FE.
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 the world production but has seen production come down in the past few years due to natural disasters like flood.
Devassia alleged that imports from Guatemala have arrived in the Indian market both legally and illegally. “It is learned that second quality material from Guatemala is being mixed with Indian cardamom and sold in the domestic market. Otherwise the market might have moved higher given the fact that production would be lower. Guatemala sells good quality cardamom in the Middle East market and lower quality commodity to countries like India,” he added.
On Monday evening, the average price for cardamom stood at R868.94 per kg when 25 tonne were auctioned at the Spices Board auction centre.
“The market is trading in a positive mood due to good export orders and lesser availability of good quality cardamom. The season is almost over in India and export demand from the Middle East is helping the sentiments. Reports of lower production in Guatemala are also helping,” Hareesh V, research head of Kochi-based Geofin Comtrade told FE.
Cardamom exports during the first six months of the current fiscal is seen at 1,295 tonne valued at R108.6 crore as against 1,442 tonne valued at R114.5 crore in the corresponding period of previous fiscal.
In the past, higher domestic prices in India always led to higher imports from Guatemala, as the global prices constantly stayed at a discount when compared to the Indian prices.
Cheaper cardamom from Guatemala also captured most of the Indian market in West Asia. Indian prices have a tendency to stay ahead due to the good domestic consumption when compared to other origins. Reports indicate that India imports 300-500 tonne of cardamom annually, which helps in limiting the domestic price.