Foreign demand may help India’s cardamom prices
HIGHER demand during the ensuing festival season is likely to lift cardamom prices in India given the crunch in supply and the havoc that incessant rains in Kerala have played with this year’s crop.
Demand for cardamom usually surges during the festival and winter season in North India, and demand from West Asia also picks up for the Ramadan festival.
Cardamom production in India during 2007/08 (April to March) is likely to be in the range of 8,500 to 9,000 tonnes, compared with 11,235 tonnes a year ago. World output is about 35,000 tonnes a year.
Heavy rains and wind in the growing areas in Kerala form the main reason for the fall in output.
New crop arrivals in the auction centres of Kerala and Tamil Nadu have been low, and are dominated by carryover stock. Delay in harvesting in Idukki, where 60% of total area is rain-fed, may result in lower arrivals in the short term.
“The daily arrivals have dropped by 40%, to 25 to 30 tonnes compared to 45 to 55 tonnes in the previous season, ” said Veeresh Hiremath, research analyst at Karvy Comtrade. “Major production centres in Tamil Nadu and Karnataka have also reported a drop in production due to the erratic climate this year.” Cardamom futures on the Multi Commodity Exchange (MCX) are currently depressed at Rs515 ($12.57) a kg, having tested a high of Rs593 a kg recently.
“To meet the intermediary demand, we can expect good buying from stockists and exporters, ” said Mr Hiremath. “This may reverse the prevailing bearish trend of cardamom futures on the commodity exchanges.”