A contradiction has emerged in cardamom markets with Indian prices plunging in the local auctions even as a shortage looms large in the international market.

Though a spurt in arrivals is attributed as the prime reason for the price fall, sources said, the small increase does not warrant such a major fall in prices.

“The auction price of cardamom has shown a decline in the last few days without sufficient reasons,” the Spices Board observed.

Pointing out that auction arrivals during the current crop season increased by 5 per cent to 9,461 tonnes against 8,975 tonnes during the corresponding period a year ago, the Spices Board said that the market conditions does not warrant such a sharp decline.

Cardamom prices, which were reigning around Rs 1,000 a kg levels, jumped to Rs 1,500 a kg last season before stabilising at Rs 1,000 a kg during the early part of this season. Trade sources said that the recent decline to Rs 700 a kg levels was unwarranted given the possible shortage that is likely to grip the global market.

The latest plunge in prices could be on account of speculative build up to the Ramzan season beginning towards the end of August when demand for cardamom increases in the Gulf market and prices peak. The demand is invariably met with supplies from Guatemala and India. But this year, production from Guatemala is expected to be lower than normal and India could be the major supplier in a market where prices could remain firm, trade sources said.

For the last two years, import of cardamom from Guatemala has not been significant — at less than 100 tonnes. But the Spices Board said that cardamom production from Guatemala is reported to be around 20,000 tonnes this year against their usual production of 27,000-30,000 tonnes. For the country as a whole, cardamom exports from Guatemala declined from 27,961 tonnes in 2007 to 23,693 tonnes in 2009 and further to 22,167 tonnes in 2010.

The reduced export figures reconfirm the production decline in Guatemala as they have no domestic consumption and most of their produce is exported. Sources said that there seems to be no perceivable reason for the current price plunge given that the next Guatemalan produce is expected to be harvested only in October-November season and should hit the markets only in November-December.

Reacting to the fall in price of cardamom the Spices Board has said that good warehousing facilities have been provided at the Spices Park at Puttady in Idukki district of Kerala.

These warehouses were designed specifically for storing cardamom and pepper at regulated temperature and would ensure that the colour and quality of cardamom are maintained for long periods of time. The Spices Board requested cardamom and pepper farmers to avail of these facilities and avoid distress sale of their produce when the prices fall.

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