The Hindu Business Line : Demand, lower arrivals boost cardamom prices

Ruling high
Weighted average price was Rs 327.47/kg as on August 30 against Rs 239.51 on same day last year.
Total arrivals down by 150 tonnes at 595 tonnes.
Current price trend to continue till year-end.

Kochi , Aug. 31

The unprecedented rise in cardamom prices within three weeks of the commencement of the auctions for the current season has brought some relief to the growers, who have had a tough time during the past two years due to low prices.

The weighted average price as on August 30 stood at Rs 327.47 a kg compared with Rs 239.51 on the same day last year. Signalling a potential drop in output this year, total arrivals at the auctions so far during the current season fell by 150 tonnes to 595 tonnes from 745 tonnes in the same period last season.

Prices of the graded varieties improved by over Rs 100 a kg from that of last year during the same period. As on August 26, the prices were AGEB Rs 460-470, AGB Rs 380-390, AGS Rs 365-375 and AGS 1 Rs 340-350 a kg. In the local market at Bodinayakannur on Thursday, prices were AGEB Rs 370-380, AGB Rs 280-295, AGS Rs 265-275 and AGS1 Rs 245-255. Bulk was fetching Rs 300-360 a kg.

Arrivals at the Cardamom Processing and Marketing Company (CPMC) auction on Wednesday stood at 62 tonnes and the entire quantity was sold out. Superior grade 8 mm bold fetched Rs 567.50 a kg, while 7 mm was sold at Rs 420-450 a kg. Current bulk was fetching Rs 380-400 a kg. Significantly, the price of medium type variety consistently remained at Rs 320-330 so far during the current season, Mr P.C. Punnoose, General Manager, CPMC, told Business Line.

Outlook bright

He said export buying was negligible. The north Indian dealers were active. There is very good demand probably because of the ensuing festival season. The trend indicates that there is no carryover stock available in the upcountry markets. The current price trend is expected to maintain till the year-end as by then cardamom from Guatemala might arrive in the markets. Harvesting there is likely to commence in October. The production in Guatemala is reported to be less this year. But, that will not make any impact in the world market, as their production even at reduced level is estimated to be around 20,000 tonnes and almost the entire quantity is exported.

Where as, over 90 per cent of the Indian output is absorbed by the domestic market. Exports in 2005-06 from an estimated production of 12,540 tonnes were to the tune of 875 tonnes valued at Rs 27 crore. In the year before, it was at 650 tonnes valued at Rs 23.90 crore. In addition, the country had imported from Guatemala 345 tonnes of cardamom valued at Rs 3.55 crore last fiscal, while it was 352 tonnes worth Rs 3.94 crore the year before.

There is a consistent growth in domestic demand, trade sources pointed out.

This year the weather so far has been erratic. This phenomenon coupled with the neglecting of the plants during the past two years due to un-remunerative prices has negatively affected the crop resulting in an estimated drop of 30-40 per cent in the production during the current season, growers said.