Indian cardamom auctions restart, but participation is low
THE restarting of India’s cardamom auctions has not proved completely successful, local trade sources have reported.
The auctions were forced to restart by the order of the Kerala high court, which threatened to cancel the licenses of the auctioneers.
In addition, the country’s Spices Board has issued a circular revising the minimum tick price downwards from Rs5 ($0.09) to Rs2 per kg.
“However the trader lobby has not yet accepted these proposals and they continue to boycott the auctions,” Mumbai company Emperor Akbar Green Cardamoms stated in a report issued on Tuesday.
The firm noted that the auctions had restarted from October 23 but had seen very poor participation. The quantity in the auctions had also been much lower, being the range of 20 tonnes to 30 tonnes and consisting mainly of rejections and poor quality grades. “The participants in the auctions consisted mainly of the auctioneers themselves and few local traders,” Emperor Akbar stated.
“The disruption in the trade at this time of the year has badly affected the supply chain and traders could not fully take advantage of the festive demand. Small arrivals continued to sustain the market but larger business volumes could not take place,” the report added.
Emperor Akbar believes that the small volumes in the auctions might encourage speculative players to push the prices upwards in an attempt to influence the market.
In addition, the delay in bringing fresh arrivals to the markets due to the disruption in the auctions would lead to a decline in quality. “It is about a month since the trade has been affected now and there seems to be no resolution still in sight,” Emperor Akbar observed.
The report noted that prices had moved higher in the last week as domestic centres of consumption and supply lines had dried up. “The export demand was quiet last week due to the Eid holidays and will come back soon firming the prices further,” it added.