Cardamom prices rise as buyers see early crop

The cardamom prices recovered last week on positive change in the market sentiments at auctions held in Kerala and Tamil Nadu.

Buyers were covering small quantities, albeit not aggressive, on the expectation that the next crop would come early in late June or early July because of the prevailing favourable weather conditions so far this year.

However, the apprehensions that growers are holding huge stocks appear to have died down, as the possibility of holding large quantity of the material, given the nearly matching figures of total production, supply and sales so far during the season, has turned out to be unlikely.

Normally, nobody would buy from the declining market and that had happened in the week before last. However, there has been a change in the attitude last week and that was reflected on the individual average auction price which moved up Rs 100 a kg, trade sources said.

Exporters estimated to have bought 10–15 tonnes last week. Upcountry buyers were buying small lots. Arrivals also remained nearly thin. These factors kept the market activated.

The annual domestic demand continued to grow given the rise in income and consequent change in the food habits. At the same time, there has not been a corresponding growth in the production of this aromatic spices. Consequently, there existed a mismatch in demand and supply.

On the other hand, availability from the lone other source, Guatemala, continued to remain limited as its production is said to take some more time to reach its normal levels.

In fact, the reason for the market to drop in recent days is said to be the sheer apprehension that the growers are holding huge carry over stocks. Thus, the speculative activities pushed the market down, they said.

Consequently, the individual auction average price after a long time dropped to below Rs 700 a kg the week before last. However, the market recovered last week and yesterday at the KCPMC auction the average price moved up to Rs 785.95 a kg from the previous Sunday's Rs 691.99. The maximum price yesterday was at Rs 1,124.50 a kg and the minimum was at Rs 591, Mr P.C. Punnoose, General Manager, CPMC, told Business Line .

Total arrivals during the current season from August 1 to May 15, 2011 stood at 9,774 tonnes. Of this, 9,523 tonnes were sold.

Arrivals and sales in the same period of the previous season were 9,370 tonnes and 9,185 tonnes, respectively.

Weighted average price as on May 15, was Rs 1,068.50 a kg, up from Rs 830 same day last year.

Open market price in Bodinayakannur on Monday morning for 8mm bold was at Rs 1,250 a kg while that for graded varieties remained nearly steady and in rupees per kg were :AGEB (7mm – 8 mm) 1,000-1,010 ;AGB (6mm – 7 mm) 850 - 920; AGS (5mm – 6mm) 750 -850 and AGS 1 – 725 - 800. In Kumily, were: AGEB 1,000 – 1,020; AGB 1,000– 1,020; AGS -775 -875 and AGS1 -765 - 810. Prices as per trade sources in the open market.

Overall weather conditions remained suitable 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 said.

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