INDIAN cardamom prices are likely to decline about 10% by the middle of March as both domestic and export demand retreated in the face of a sharp spike in prices in the last few months, according to analysts and traders.
N Ranganath, manager, Kerala Cardamom Processing & Marketing Company, said:
“The prices have been rising continuously. It’s not an essential food…people have stopped buying.”
Kerala accounts for 70% of India’s total production followed by Karnataka and Tamil Nadu.
Kunal Shah, an analyst with Motilal Oswal Commodities Broker, told news agency Reuters: “Prices are unlikely to sustain at such high level…it is likely to come down to Rs620 ($15.58)to Rs630 within a month.”
Cardamom prices rose by 40% in the last four months to Rs700 per kg on a decline in production on lower acreage.
Production in 2007/08 is expected at about 7,700 tonnes, down from an earlier estimate of 9,700 tonnes on falling acreage, said a Spices Board official on Tuesday. Last year’s output was 11,300 tonnes. The area under cultivation in 2007/08 fell to 69,300 hectares (171,200 acres) from 73,200 hectares a year ago, the official said.
Thomas Koshy, director of Kottayam-based spice trader Allkoshys Spices, said
buyers had moved to the sidelines due to the arrival of low quality material from the latest crop as the season drew to a close. India harvests its cardamom crop between August and January.
Alex Mathews, an analyst with Geojit Financial Services, said: “Guatemala is offering at cheaper prices due to lower cost of production.”