The Hindu Business Line : Cardamom to rise on US, Europe demand

Hit by a drop in production, prices of cardamom are set to move up from mid-December on a rise in demand from the US and European countries. India could be short by 1,500 tonnes this crop season ending June against the annual output of about 12,000 tonnes.

Guatemala, the largest producer of cardamom, is also facing a steep fall in production to 16,000 tonnes against its annual output of 20,000 tonnes. Its acreage under cardamom has remained stagnant in the last three years.

"The fall in Guatemala production has come as a blessing for Indian exporters. Though West Asian countries are the largest importers of the Indian variety, the ensuing festival season in the US and European countries could lift demand. Moreover, the Indian variety commands a premium in the international markets," said Mr Sushil Sinha, regional head, Karvy Commodities. AV Thomson, SPG Ramaswamy Nadar and Sons and Mass Enterprises are some of the major cardamom exporters.

Bullish trend

Reflecting a long-term bullish trend, cardamom prices on MCX for March delivery moved up to Rs 432 per kg on Friday from Rs 426 on Thursday; the near month December contract traded at Rs 393 on Friday against Rs 384 quoted on Thursday. However, on Monday all the cardamom contracts closed lower on a weak commodity market. The March contract closed at Rs 425, while the December contract finished at Rs 387.

"Traders have remained bearish in the short-term as there was no much demand. The produce from Karnataka and Tamil Nadu is expected to revive the market. For the long term, prices can touch Rs 480 per kg," predicted Mr Sinha.

Till last week, total arrivals in Kerala auction centres during the season starting August were placed at 2,433 tonnes compared with 3,348 tonnes during same period last year - reflecting a shortfall in production, said a trade source.

Cardamom exports have jumped from 650 tonnes, valued at Rs 23.89 crore, in 2004-05 to 875 tonnes, worth Rs 27 crore, in 2005-06. "Pricing has been the deciding factor for importers while choosing between India and Guatemala. Unlike India, the domestic consumption of cardamom in Guatemala is less than 10 per cent leaving a major chunk for exports," said Mr Charles J Kithu, Deputy Director, Spice Board.

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