Middle East purchasing helps propel cardamom prices higher

GUATEMALAN cardamom prices have rebounded over the last month or so due to a combination of demand from the Middle East and speculative activity in Guatemala itself and in rival origin India.

Andrew Barker, managing director of PBA Brokerage, toldthat whole green cardamom of medium size was now at $12.50 a kg c&f compared with $11 a kg about five weeks earlier while small green cardamom was at $11.50 a kg from $10 a kg before.

Seeds were at $9.50 a kg c&f against $7.50 a kg previously and mixed yellow quality (MYQ) of a minimum 360 grammes a litre was at $5.00 to $5.50 a kg c&f compared with $3.50 a kg earlier.

“So the market has turned around,” Mr Barker observed. He explained that speculators had become involved in the market in India and Guatemala and these speculators held stock and were pushing up prices a bit.

The speculators sell the cardamom in raw form to graders/sorters/exporters.

As a result, the latter contingent were struggling to find stock at cheaper levels and were having to pay higher prices to the speculators in order to obtain the cardamom they required.

One Rotterdam trader said that he had seen prices gain by an average of between $3 and $4 a kg over the last two weeks to Monday mainly as a result of sudden demand from the Middle East. “It appears that the stocks there are very low,” he said.

The trader explained that Middle East buyers had taken only hand to mouth coverage so there was still a lot of outstanding demand to be covered ahead of Ramadan later this year.

Indian prices had also gained in recent weeks, widening the premium for Indian cardamom over that from Guatemala and prompting more Middle East buyers to turn to Guatemala.

The Rotterdam trader indicated Guatemalan whole green cardamom at $16.50 a kg c&f, seeds at $11.50 a kg and MYQ material at $7 a kg.

Mr Barker noted that the latest Guatemalan crop was the biggest for the origin in many years, being estimated at up to 28,000 tonnes. In addition, India is facing its largest crop in some time.

“Ultimately, you can’t ignore that. So although there is firmness at the moment, at some point between now and September, when the new (Guatemalan) crop starts, there is going to be an awful lot of stock to get rid of. That can only mean one thing,” Mr Barker remarked.

India now oversold

However, he cautioned that one caveat to this assessment was that between September and November India sold a large volume of its whole green cardamom to the Middle East, ahead of the exporters in Guatemala. “The Indians are realising now that they have sold more than they thought they had and they have pretty much run out of the whole greens,” Mr Barker said.

As a result, Indian whole green cardamom of medium size has reached $16 to $17 a kg c&f compared with $11 a kg six to eight weeks ago.

Guatemala is also short of whole green cardamom.

Mr Barker predicted that over the next four to five months cardamom seeds and MYQ from Guatemala and India would fall in price on ample stocks.

The overall category of whole green cardamom encompasses those that are bold green in colour as well as a grade that is of a pale green shade. The bold green type commands the premium over the pale version.

“I think the pale greens will also fall in price as the year goes on, but the whole greens with a full green colour will get more expensive between now and the new crop because they are scarce,” Mr Barker added.

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