Guatemalan cardamom market taking mixed directions

GUATEMALAN cardamom prices have shown mixed directions of late depending on grades and availability.

The amount of whole green cardamom of bold colour of medium to larger sizes appears to be limited and this is pushing prices of these grades higher.

Andrew Barker, managing director of PBA Brokerage, told that this upturn was particularly strong in the larger sizes of the whole greens and was mostly due to damage to this part of Guatemala’s crop from the thrips insect.

In addition, prices of these grades were being underpinned by gains in Indian whole green cardamom on limited supply.

“So the Middle East is forced to buy from Guatemala, which is cheaper on the whole greens,” Mr Barker added.

Mr Barker said medium whole green bold cardamom could be purchased in a range of $12.00 to $12.75 a kg c&f while the larger sizes on these were from $14.00 to $14.50.

A report from Emperor Akbar Green Cardamoms of India said good quality new crop Indian material might not arrive until July, meaning it would be too late to reach the major international markets in time for Ramadan demand. “So there is still a possibility of a spike in the prices upwards sometime in June,” it added.

Indian trade estimates have projected the country to produce 22,000 tonnes. Emperor Akbar said it would be surveying plantations next month in an attempt to form its own view on the crop.

Meanwhile, the smaller size of Guatemalan cardamom of full green colour was trading at $10 to $11 a kg. “The reason why those are still comparatively cheap is that there are plenty of them,” Mr Barker explained.

In mixed, yellow quality (MYQ) most shippers were a little short of material at the moment. MYQs of minimum 360 grammes a litre were at $3.75 to $4.10 a kg while seeds were between $5.50 and $6.50 a kg, Mr Barker said.

He noted that prices of whole green cardamoms in medium to larger size, MYQs and seeds were all higher than they had been a few months ago. However, whole green cardamoms of pale green colour were trading at lower levels now, averaging $6 to $8 per kg, depending on size.

“The pale green cardamoms this year are plentiful and the full green colour cardamoms, which the Middle East prefer, are limited,” Mr Barker remarked.

Hence, those buyers requiring bold green material were paying a massive premium over the pale green.

Current demand was weak though as much of the purchasing for Ramadan has already been completed. “A lot of buyers now will just cover hand to mouth because they will be waiting for the new crop coming up in September,” Mr Barker predicted

Similarly, one Rotterdam trader said: “The majority of the crop has already been bought and contracted and exported, so there is a small carryover left and it will have to do until the new crop comes.”

Emperor Akbar said India was seeing very little domestic demand but continuous buying from exporters to meet ongoing international offtake.

The consensus is that Guatemala had a very good crop this year. Trade estimates have suggested it might have been between 33,000 and 36,000 tonnes.

Possible downturn in MYQ prices

Mr Barker said he was expecting MYQ prices to fall sharply ahead of Guatemala’s next crop in September. “The reason for that is that there is going to be a huge amount of pale greens carried over and the pale greens will start falling into the category of MYQ, which is for grinding,” he said.

The Rotterdam trader said he could envisage further price declines in the MYQs, but nothing substantial, suggesting that a slide to $3.20 or $3.30 a kg might be possible. “I do not see it falling below $2.50 or something like that, because then it will not be worth more than husk,” he said.

He added that after two consecutive good crops it was most likely Guatemala’s forthcoming crop would be smaller, although there should be some carryover left to help top up overall availability. “So if the new crop would be substantially smaller, the carryover could still make up for some part,” he said.