After black pepper, it is now the turn of cardamom to witness a price surge reportedly on speculative buying. The rates soared to ₹2,250 per kg in the Puttady auction centre in Kerala without bringing any benefits to the farming community due to crop shortage.
After Covid-19, the cardamom market has been witnessing a reverse trend with prices plummeting to below ₹1,000, prompting farmers to neglect the crop because of rising production cost. It was in August 2019 that prices touched a record high of ₹7,000.
PC Punnoose, managing director of CPMCS Ltd. at Kumily, cited the delayed and deficient monsoon, especially in the growing belt of Kerala’s Idukki, as the reason for prices to move up. May and June are considered as the time for surplus rains, but hardly any showers during the period, instead a dry spell which led to heavy droppings in plantations and it impacted production.
Normally, it would take 90 days for the flowers to mature, but deficient rains in this season has hit plant settings and it resulted in delayed plucking. The first round of harvest was over by July-end and the next round will all depend on a conducive weather.
“It looks like climate change and weather is going to dictate the direction of the market. With El Nino strengthening, we may not see rains from December of 2023 till April 2024 contributing to further reduction in crop and increase in prices”, said SB Prabhakar, a cardamom planter in Idukki.
The growing tracts have received a deficit of 70 per cent in June, 25 per cent in July and around 40 per cent till date in August. As the South-West monsoon is the main flowering months, the overall crop is expected to drop 25-30 per cent at a minimum in the current season.
Speculative buying on
If there is a deficit again in this period, it will lead to a further reduction in crop and an increase in prices up to ₹3000 level. If rains become bountiful later in August and September, he said, adding that prices should stabilise at around ₹2,000-2,300 levels.
However, trading sources said the market is witnessing speculative buying mainly from Kerala traders in anticipation of a further price hike. The offered quantities in auction centre are on an average 100 tonnes per day.
The consuming centres in the Gulf markets and upcountry are hardly having any stocks and they are all waiting for the raw material. But the crop shortage and rising prices is hitting them hard, especially with the festival season is around.