Cardamom average price drops below Rs 600/kg

Cardamom prices continued to drop on selling pressure at auctions held in Kerala and Tamil Nadu, as growers were liquidating accumulated stock.

“Mainly middle-class growers who were holding their produce anticipating high prices at above Rs 1,000 a kg have resorted to selling fearing further fall in prices. This trend, coupled with favourable climatic conditions that are likely to facilitate early good crop this year, pulled prices sharply down,” trade sources said.

Enthused by good prices during the past couple of years, growers resorted to good farming practices and that, supported by suitable weather conditions this year, is expected to pave the way for early and good crop next season. The new crop is expected to hit the market by late June or early July, they said.

Add to this, demand from North India used to be usually thin for June and July, as no festivals are held due to hot weather conditions prevailing there, also aided the price fall.

The panic selling resulted in arrivals last week soaring to around 300 tonnes.

At the Sunday auction alone, held by the KCPMC, arrivals were 64 tonnes. However, nearly the entire quantity was sold out as exporters and upcountry dealers were covering.

Big growers are said to have sold their stocks when the prices were ruling at around Rs 1,000 a kg.

However, good buying support from exporters who have orders in hand for the Ramzan, which is expected early this year, has arrested the prices from falling further last week, Mr P.C. Punnoose, General Manager, CPMC, told Business Line .

According to trade sources, an estimated 40-45 tonnes of cardamom have been bought by exporters last week.

The individual auction average price dropped to below Rs 600 a kg probably for the first time in the last two years. It dropped to Rs 588.59 a kg on Sunday from Rs 696.03 at the KCPMC auction. The maximum price yesterday was at Rs 1,030 a kg and the minimum was Rs 262 a kg, Mr Punnoose said.

Total arrivals during the current season from August 1 to May 29, 2011, stood at 10,368 tonnes. Of this, 10,108 tonnes were sold.

Arrivals and sales in the same period of the previous season were 9,755 tonnes and 9,514 tonnes respectively.

Weighted average price as on May 29, was at around Rs 998 a kg against about Rs 827/kg same day last year.

Exporters are said to be showing interest to cover and they are expected to buy good quantity to meet their overseas Ramzan requirement. With supply outweighing demand, prices continued to show a declining trend, a major dealer in Bodi told Business Line on Monday.

He said in the open market there today good colour 8mm bold is sold at Rs 1,050 - Rs 1,100 a kg. Graded varieties dropped further and in (Rs/kg) were: AGEB (7mm) 850 -900; AGB (6mm) 750; AGS (5mm – 6mm) 640 -700; and AGS 1: 625 – 650. Good bulk was being sold at Rs 650 – Rs 700 a kg while medium bulk at Rs 550 a kg, he said.

Overall weather conditions remained favourable so far for the plants and, hence, the next crop is likely to be good and expected to hit the market in late June/early July, growers in Kumily said.