Commodities

Cardamom loses flavour as offtake weakens

G. K. Nair Kochi | Updated on April 04, 2011

cardamom

Cardamom prices witnessed a declining trend last week due to lack of buying support from both domestic dealers and exporters at the auctions held in Kerala and Tamil Nadu.

“The market has been in the grip of sluggishness because of the ensuing Assembly elections in Kerala and Tamil Nadu, on the one hand, and rains in the growing regions, on the other, in recent days, which have created a bearish sentiment in the market,” trade sources said.

According to them, buyers are of the opinion that there will be crop available throughout the year without any break between the current and next season because of the summer showers. Consequently, they would not have to buy and stock, the sources said.

Upcountry buyers were not actively covering while export buying was negligible at around three tonnes last week, they said.

The average price declined further today at the CPA auction in Bodi to Rs 925.37 a kg from Sunday's 938.46, they said.

The individual auction average dropped to below Rs 900 from Rs 1,000 few weeks ago.

“We have been watching a very interesting phenomenon in the cardamom futures price for the last four months,” Dr K. Satheesh Babu, Professor & CCPI, Agricultural Market Intelligence Centre, Kerala Agricultural University told Business Line.

Generally, the spot price plus cost of carryover determines the futures price for any agricultural commodity. But to my surprise, I am watching that the futures price of cardamom during the last 4 months is “determining” the spot price at Puttady (Vandanmettu) and Bodi e-auctions, leading to a suspicion that the speculators have taken over the entire cardamom market.

“My personal view is that the bringing down of default penalty from 12 per cent to 3 per cent has provided a convenient fodder for the speculators,” he said.

At the Sunday auction, conducted by the KCPMC arrivals were at 28.7 tonnes and the entire quantity was sold, Mr P.C. Punnoose, General Manager, CPMC, told Business Line. The maximum price was at Rs 1,300 a kg while the minimum was at Rs 741 a kg. Auction average was at Rs 938.46 a kg, he said.

Total arrivals during the current season from August 1 to April 3, 2011 stood at 8,414 tonnes. Of this, 8,202 tonnes were sold.

Arrivals and sales in the same period of the previous season were 8,420 tonnes and 8,237 tonnes respectively.

Weighted average price as on April 3, 2011 was Rs 1,097.91/kg, up from Rs 806.30 same day last year.

Prices for graded varieties according to official sources in Kumily on Monday were (Rs/kg): AGEB 1,235 – 1,245; AGB 1,125 – 1,135; AGS -1,110 – 1,120 and AGS1 -1,080 – 1,090. Prices as per trade sources in the open market in Bodinayakannur were (Rs/kg): AGEB (7mm – 8 mm) 1,050 – 1,100; AGB (6mm – 7 mm) 1,000- 1,010; AGS (5mm – 6mm) 1960 -970 and AGS 1 – 940 – 950.

Good bulk was being sold at Rs 1,010 – Rs 1,020 while medium was fetching Rs 950 – Rs 960 a kg, trade sources in Bodi said.

The weather conditions in the growing areas in Kerala's Idukki district were favourable for the crop as the estates received rains during the past few days. It is going to be good for the plants which may continue yielding through to the next season, growers said.

Published on April 04, 2011

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