Rising Covid cases coupled with plummeting prices seem to have prompted a section of cardamom auctioneers to keep away from conducting the e-auctions.
There are 12 auctioneers conducting cardamom auctions at Bodinayakanur in Tamil Nadu and Puttady in Idukki. The average daily turnover is around ₹9-10 crore.
Auctioneer sources told BusinessLine that the existing restrictions on movement due to Covid protocols have prevented traders from participating in the auctions both in Bodinayakanur and Puttady. However, last year, the sources pointed out there were no such restrictions to travel between the states, especially for the cardamom trade, despite the pandemic situation.
Cardamom crashes to three-year-low of ₹930/kgRates plunge as pandemic subdues demand
According to sources, the current uncertainty in the participation of dealers and traders for auctions, restrictions in opening cardamom collections centres and workers shortage in the primary trade centres of Thevaram and Bodi for cleaning and grading of capsules have slowed down the activities and delayed the dispatch of material to the consuming centres.
Besides, subdued demand for cardamom in major upcountry markets and the resultant price crash that reached a rock bottom level of ₹900 per kg also compelled many to abstain from the auctions. Some of them had even reported their inability to carry out the auctions to the Spices Board in the existing circumstances, the sources said.
“Since there is no silver lining on a possible improvement in the situation, some of us have decided not to conduct the auctions”, a leading auctioneer said. The announcement of a further peak in Covid cases has raised some apprehension over a further demand drop.
However, some of the auctioneers have come forward to conduct one or two auctions on a trial basis on Friday following the assurance from the Spices Board to conduct the trade by getting the necessary support of the enforcement authorities.
Giby Mathew of Acumen Financial Services said the trading sessions in the auctions witness a panic selling that has resulted in the arrival of good quantities for the offering. Both the trading sessions together manage 100-120 tonnes per day, which is a huge volume in this off-season period. The lowest crop price was recorded on May 1, with an average price declining to ₹861, raising concern over further drop.
Cardamom price usually moved higher during the festival season after the harvesting season is over in Kerala by March. The North Indian demand will kick start from the very next month, April. However, this time the reverse market trend has happened due to the second spell of Covid, which entirely changed the market dynamics, he said.