GUATEMALAN cardamom prices have been subjected to upward pressure of late on a slight upturn in demand and ongoing speculation that the 2012/13 crop will be smaller.
Reports of fungus damage have led to forecasts that the crop could fall from the 28,000 tonnes reached in the recently-ended 2011/12 season.
Andrew Barker, managing director of PBA Brokerage, remarked that with the crop only two months into harvesting and not due to finish until March or April 2013 it was much too early to jump to any conclusions. “It’s an ongoing thing so my first observation is it’s impossible to tell. It’s only subjective,” he said.
Mr Barker noted that previously trade sources had been projecting the forthcoming crop to reach 32,000 tonnes, but the consensus now seemed to be more in the range of 28,000 tonnes. “I haven’t heard less than that,” Mr Barker added.
However, he noted that the actual extent of any fungus damage would not become clear until the next five to six months. “If that is as bad as people are thinking then yes, maybe the crop will be less than 28,000 tonnes, if it’s not then maybe it will be 28,000,” he added.
One Rotterdam trader said he had seen similar reports of crop damage and based on these he viewed 26,000 tonnes as the more likely outcome than 28,000 tonnes.
Mr Barker observed that there was keen buying of the whole green cardamoms which was keeping prices of these grades stable. “What is being harvested is flying out of the door quite quickly,” he remarked. “There is no downward pressure at the moment on whole greens.”
Mr Barker put prices of medium sized whole green cardamom at $11 a kg c&f, large at $12 a kg and small at $10.50.
The Rotterdam trader said bold green cardamom of around 8mm size was commanding levels of $16.50 a kg cif Middle East.
Lack of bold greens
The Rotterdam trader said he was expecting the bold green cardamoms to be very scarce this season so prices for these grades would remain high, and possibly advancing further, depending on the extent of demand ahead.
Mr Barker observed that there was weakness in the mixed, yellow qualities (MYQs), which are used for grinding purposes. This was because there was ample new crop availability on these and decent carryover volumes from 2011/12.
He explained that MYQ of a minimum of 360 grammes a litre was at $3.60 a kg and seeds could be acquired at $6.50 a kg.
However, the Rotterdam trader saw a different trend on MYQ prices. He said that there was sufficient availability but due to low stocks in consuming countries and demand under way from last month, prices of MYQs had also increased of late, by as much as $500 to $600 a tonne, which was a jump of some 10 to 12%.
MYQs still the much cheaper option
Despite this, the MYQs remained an attractive proposition as they were still much cheaper than the bold greens which were ranging from $12 a kg all the way up to $20 a kg, depending on the quality and specification, the Rotterdam trader said. He put medium MYQ cardamom at $5.75 a kg cif.
Demand had picked up in September and October. “Now we see a regular demand which is not abundant. Of course, people are buying on a hand to mouth basis, which we see in other commodities as well, so there is no real rush into buying. On the other hand, for the nearby shipment positions as well as spot material which is still there, there is demand, but not for huge quantities but just to cover for the next one or two months,” he added.
The trader said that in view of outstanding demand still to be covered, particularly by the Middle East, further price increases looked likely ahead.