Cardamom shows pressure of tight stocks
GUATEMALAN cardamom prices have advanced strongly in recent weeks as the market reaches the tail end of availability from the 2009/10 crop, which was a small one anyway.
In the week ending May 28, European traders quoted Guatemalan bold green cardamom of around 8mm size as rallying to $28,000 a tonne cif main European ports compared with $27,000 a tonne a week earlier. Mixed yellow qualities (MYQs) of minimum 360gpl were said to be at $20,000 a tonne cif from $19,000 a tonne earlier.
One Rotterdam trader indicated offers on these quality grades of MYQs as being as high as $22,000 a tonne cif. He observed that the market was now at the stage where there was no more crop being collected, meaning that importers will have to wait at least until November for MYQs and until December/January for the seeds.
“The crop was very small and also the market was very empty with almost no carryover. That was also the reason in the first instance why the prices have increased dramatically,” the trader explained.
After being largely absent for the last two months, the Middle East and other destinations have been moving in to take cover, the trader observed. However, the pattern in Europe had continued to be hand-to-mouth purchasing.
Andrew Barker, managing director of PBA Brokerage, recalled: “When the prices for whole greens went above $30,000 (a tonne) in November/December/January there was a real easing back of buying interest.”
Mr Barker noted that prices for whole bold greens had eased about two weeks ago to around $23,500 a tonne c&f before edging back up more recently to about $26,750 a tonne c&f.
“That will continue to firm right up until September or October of the new crop because there is very little available. So the Guatemalans know it is a seller’s market,” he added.
The Rotterdam trader remarked: “The middlemen in Guatemala are holding on to some stock and no one knows exactly what they have in their hands. I presume they have not sold everything because they know that between now and October there is going to be some further demand and a further squeeze and maybe they are speculating on making some extra money on their position,” he said.
Mr Barker predicted that additional demand pressure is likely to emerge soon as a number of buyers realise they need to increase their cover in order to bridge the long gap to the next crop.
Fears over Agatha
Supply concerns were heightened after Tropical Storm Agatha lashed into Guatemala on May 29, bringing severe flooding and landslides and resulting in at least 152 deaths in the country. Agatha followed the eruption on May 27 of the Papaya volcano, which blanketed parts of the area near Guatemala City with ash.
Mr Barker commented: “I hear that heavy wet weather is more of a problem than the volcano, but having both together is really making logistics and harvesting the tail end of the crop very difficult. Prices and availability have tightened considerably in the last week.”