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Friday, Nov 05, 2004

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Cardamom prices up on lower arrivals

G.K. Nair

Kochi , Nov. 4

CARDAMOM prices moved up by Rs 30 a kg at the auctions held in Kerala and Tamil Nadu on buying support and drop in arrivals.

Unlike last season, arrivals have been heavy until last weekend and this phenomenon has pushed the prices down.

The growers now seem to have started holding back their produce, which has lead to a drop in the arrivals at the auctions this week, trading sources said.

At Kumili auction on Wednesday arrivals dropped to 35 tonnes from 43 tonnes in the previous auction, while it fell to 9 tonne at Bodinayakannur on Thursday from 13 tonnes.

In addition, there was good export-buying. At Kumily exporters bought 14 tonnes of cardamom on Wednesday. The airfreight assistance announced by the Spices Board seem to have encouraged the exporters to buy, official sources told Business Line on Thursday.

In October exporters bought 62 tonnes of cardamom, they said.

According to them upcountry buyers were not keeping inventory because of the instability in the price and hence they were buying only what was needed to meet the demand.

Meanwhile, some of the dealers alleged that the current rise in price was a temporary phenomenon and artificially created. "It is too late to buy for Diwali and Ramzan demand," they argued.

The average price has gone up from Rs 267.96 a Kg on Oct 29 to Rs 307.43 on Wednesday. Price of 8mm bold had moved up to Rs 400 a Kg on Wednesday from Rs 370 to Rs 375 last week, while that of 7mm was sold at Rs 330 (Rs 295-Rs 300) at Kumily. Bulk was being sold at Rs 290-Rs 300 a Kg.

At Bodinayakannur floating bulk was fetching Rs 280-Rs 300 and 8mm Rs 360-Rs 370, trading sources there said.

The favourable weather conditions prevailing in the growing areas have pushed the production in recent weeks and given this situation, there might not be any drop in production, market sources pointed out.

The projected decline of 20 per cent due to the drought early this year would be offset by the increased production in other areas, they said.

"The increased arrivals during the season is a clear indication of this phenomenon," they added.

The total arrivals in the current season up to November 3 stood at 1,805 tonnes and the sales were at 1,696 tonnes as against 1,364 tonnes and 1,260 tonnes respectively during the same period last season.

There was an increase of 441 tonnes in arrivals and 436 tonnes in sales so far in this season.

The decline in prices has pushed the weighted average price by Rs 110 a kg to Rs 308 from Rs 418.19 a kg last season up to November 3, they said.

Prices of graded varieties as on October 30, were AGEB Rs 345 - Rs 355 a kg, ABG Rs 265-Rs 275, AGS Rs 255-Rs 265 and AGS 1 Rs 235-Rs 245 a kg.

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