TRADERS and analysts in India have forecast that the country’s cardamom prices are likely to decline about 10% by the middle ofMarch because earlier sharp increases in price have had a dampening effect on both domestic and export demand.
N Ranganath, manager at 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 cardamom production followed by Karnataka and Tamil Nadu.
Kunal Shah, analyst withMotilal Oswal Commodities Broker, told news agency Reuters: “Prices are unlikely to sustain at such high level. It is likely to come down to Rs620 ($15.62) to Rs630 within a month.” Indian cardamom prices rose by 40% in the last four months to Rs700 per kg following a decline in production arising from lower acreage.
Production in 2007/08 is expected at about 7,700 tonnes, down from an earlier estimate of 9,700 tonnes due to the falling acreage, said a Spices Board official. Output in 2006/07 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 that 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.”