The Hindu Business Line : Cardamom rules lower on selling pressure

Buyers were active but for the heavy arrivals the prices did not move up, trading sources in Kumily in Kerala and Bodinayakannur in Tamil Nadu told Business Line on Thursday.

Traders have attributed the increased arrivals and the low prices to the presence of 30 to 40 per cent of the capsule of last season. Exporters were also not much active. The main reason they attributed was that the arrivals were of inferior quality that do not conform to the requirement of the buyers overseas.

The growers, who were holding back the crop last season anticipating an increase in price, are now liquidating the old stock besides selling the current crop at the prevailing prices. Last season, contrary to expectations the prices did not improve and as a result, major planters and some of the traders burnt their fingers. Given the present price trend, the growers are not ready to take a risk. Add to this, they do not anticipate any major fluctuation in the prices in the days to come, according to market sources.

Arrivals up to October 13 this season stood at 1,177 tonnes of which 1,110 tonnes were sold. During the corresponding period last season, the arrivals and sales were 1,063 tonnes and 994 tonnes respectively. As against the weighted average price of Rs 423.83 a kg last season the price this season is Rs 322.74 a kg.

Prices of the graded varieties were AGEB Rs 385 - Rs 395; AGB Rs 295- Rs 305; AGS Rs 275-Rs 285; and AGS1 Rs 260 - Rs 270 a kg.

Superior variety 8 mm bold capsules were sold at Rs 425 - Rs 430 kg, while 7mm at Rs 340 - Rs 360 a kg at Kumily on Wednesday. Bulk was sold at Rs 320 - Rs 330 a kg.

According to some of the major growers, the current prices would land them in serious financial crisis, as it is not remunerative. The average yield per hectare is worked out to 218 kg and at the current average price, say, of Rs 320 a kg the gross income would come to Rs 69,760 per hectare. The total cost of maintenance is estimated at Rs 45,700 and thus, the gross profit from one hectare would be Rs 24,060. From this when land rent, interest on working capital, income-tax and marketing expenses and depreciation aggregating Rs 20,500 are deducted the net profit would come to a meagre Rs 3,560 a hectare.

The small and marginal growers might not be getting even the average price of Rs 250 a kg for their produce when sold in bulk to intermediaries. This would drive them to the debt trap, they pointed out.