Indian cardamom prices face upward pressure
INDIAN cardamom prices rose about 10% over the last month due to falling arrivals, rising export demand and a weak rupee, local analysts and traders have observed.
At 4:02 pm on May 15, the benchmark June contract on the Multi Commodity Exchange of India was trading at Rs633.50 ($14.85) per kg, up 0.56%. The contract rose 9.6% in one month to May 14.
Kunal Shah, an analyst with Motilal Oswal Commodities Broker, told news agency Reuters: “Arrivals are almost nil at this time as the harvesting season has already ended in March.”
India’s annual cardamom harvest starts in August and continues until March.
Alex Mathews, senior analyst with Geojit Financial Services, said lower production due to decreased acreage in 2007/08 was also boosting the sentiment.
Production in 2007/08 was about 7,700 tonnes, down from 11,300 tonnes, said a Spices Board official.
The area under cultivation fell more than 5% to 69,300 hectares from a year ago, he said.
N Ranganath, marketing manager of Kerala Cardamom Processing & Marketing Company said supplies would remain tight until the new crop reaches the market, which will not happen until August.
Mr Mathews added that a weak rupee was also supporting the market.
The Indian rupee held above 13-month lows on May 15 as a dip in the oil price and share market gains slowed the heavy dollar-selling that saw it lose as much as 5% this month.
Mr Shah said good export demand from the Middle East and Japan was also helping the market to move higher, Shah.
India is the world’s second largest cardamom producer and exporter after Guatemala. Kerala accounts for 70% of India’s total production followed by Karnataka and Tamil Nadu.