The Hindu Business Line : Buying support keeps cardamom stable

CARDAMOM prices were stable at last week's levels during the auctions in Kerala and Tamil Nadu this week as there was good buying support matching supply.

There was good demand from the upcountry market in view of the ensuing Dussehra and Diwali festivals. Yet, prices did not move up because of heavy arrivals, market sources in Kumily (Kerala) and Bodinayakannur (Tamil Nadu) told Business Line.

Some exporters were active in the auction held at Bodinayakannur on Thursday. But, in general, they have yet to be active although the prices continued to rule low, the sources said. Exports in September are estimated to be 52 tonnes.

According to export sources, the main markets in the Gulf region, especially Saudi Arabia, the major buyer of Indian cardamom, are holding stocks of Guatemalan cardamom.

The competition from Guatemala, which has been offering at $5.50 a kg, has become a major threat to the Indian produce.

Buyers in these countries have shown interest but they want the price to be on par with that of Guatemala, said a member of the delegation of Cardamom Processing and Marketing Company, Kumily, which has returned from the Gulf after a promotional visit. India is offering at $9-9.50 a kg as it is qualitatively superior, he added.

Indian cardamom exports to Saudi Arabia increased to 496.10 tonnes in 2000-01 when the there was a crop failure in Guatemala.

This pushed up the total exports to probably a record high of 1,545 tonnes and the unit value realised per kg was Rs 548.09.

In 2001-02, however, exports dropped to 1,031 tonnes while the unit value went up to Rs 598.25 a kg.

In 2002-03, it fell further to 682 tonnes but the unit value shot up to Rs 690.18 a kg on short supply in both the producing countries.

Thereafter, as the production in Guatemala and India increased, prices started falling. While Guatemala exports 80-90 per cent of its production of an estimated 14,000 tonnes, India has a strong domestic market that absorbs 80-90 per cent of the production.

The unit value of imported cardamom remained between Rs 240 and Rs 270 a kg. Probably because of this phenomenon, prices of AGS and AGS-1 were ruling at this level in the auctions here, market sources said.

At the auction held in Kumily on Wednesday, bulk prices remained at Rs 330-340 a kg. Unlike in the past, the superior variety 8 mm bold sold at Rs 420-425, while that having good colour was sold at Rs 440 a kg. The 7 mm bold variety was quoted at Rs 360-370 a kg.

The total arrivals at the auctions in the current season up to October 5 stood at 948 tonnes, of which 891 tonnes were sold, against 912 tonnes and 858 tonnes respectively in the corresponding period last season. The weighted average price fell to Rs 325.80 a kg from 424.4 last season.