Commodities

Cardamom prices decline on bearish sentiments

G K Nair Kochi | Updated on March 01, 2011

cardamom

Cardamom prices declined last week at auctions held in Kerala and Tamil Nadu on bearish sentiments and reports. However, according to the trade in Bodinayakannur on Monday the market has improved by Rs 100-150 a kg from that of last Friday, when the auction average dropped to Rs 879 a kg. They said 8 mm bold was being sold at Rs 1,400 a kg.

Reports that Guatemala was selling at $20-21 a kg coupled with good summer rains in the growing areas of Kerala's Idukki district has made the market bearish. There is a feeling among the trade that the current rains would reduce the gap between the current and the next crop and that in turn would improve the availability. Add to this, there has been a propaganda that the growers are holding back huge quantity of the produce and that would help increase the supply. All these factors created a bearish sentiment in the market pulling the prices down.

But, the stocks held by growers are said to be not as huge as is being projected by the trade, market observers said. The current prices are workable for exporters and hence fresh orders are expected in the coming days, they said. Already an estimated 10 – 15 tonnes have been bought by exporters last week. On the other hand, traders who had bought good quantities at higher prices have also landed them in financial loss following the continuous price decline in recent days and that in turn has also created a liquidity crunch in the market slowing down fresh purchases, they said. The market, however, made a recovery on Sunday with the average price moving up to Rs 978 a kg from Rs 879 on Friday, Mr P C Punnoose, General Manager, CPMC, told Business Line.

Total arrivals at the KCPMC auction on Sunday stood at 26 tonnes and the maximum price rose to Rs 1,299 a kg and the minimum was Rs 550 a kg. The growers, who are holding the material, should release it in a regulated manner as a market intervention exercise. Given the current trend holding substantial quantities for long might not be a prudent decision, trade sources said. There has been a continuous decline in the arrivals as the harvesting is in the closing stages.

According to growers there will be one or two round of picking. Total arrivals during the week stood at 170 tonnes. The individual auction average price dropped to below Rs 1,000 a kg from last Tuesday onwards. Total arrivals during the current season from Aug 1 to Feb 27, stood at 7,201 tonnes. Of this 7,049 tonnes were sold. Arrivals and sales in the same period of the previous season were 7,267 tonnes and 7,193 tonnes respectively. Weighted average price as on Feb 27 was Rs 1,024/kg, up from Rs 723 same day last year.

Prices for graded varieties (in Rs/kg) in Kumily on Monday were: AGEB 1,210-1,220; AGB 1,100-1,125; AGS 1,020-1,030 and AGS1 985-1,010. Prices in the open market in Bodinayakannur (in Rs/kg) : AGEB (7mm-8 mm) 1,200-1,210; AGB (6mm-7 mm) 1,050– 1,100; AGS (5mm-6mm) 1,000- 1,025 and AGS 1 975-1,000.

Several tracts of the growing areas received good summer showers during the week and it is good for the plants, growers said.

Published on March 01, 2011

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