Commodities

Cardamom loses flavour on selling pressure

V.Sajeev Kumar Kochi | Updated on October 08, 2018

 

The rush to sell cardamom by growers in Kerala to meet their cash requirement has led to drop in prices of the spice crop over the past few days. This is even as a fresh spell of rains in the high ranges have spoiled the crop’s prospects.

Prices are now ruling below ₹1,200/kg after touching ₹1,300/kg the previous week.

PC Punnoose, CEO, Kerala Cardamom Processing and Marketing Company, said prices dropped to ₹1,150 last Friday mainly because of a cash crunch.

There is a serious financial crisis due to a crop loss that had affected the harvest in June, July and August.

Coupled with this, the fresh rains have impacted arrivals to auction centres.

Even though actual arrivals from farmers are dwindling, informed sources pointed out that the auction market is still witnessing regular quantity for auctions. This is due to re-pooling done by the traders to keep the prices under check.

The economic crisis rumoured to be happening in the GCC countries, the largest importers of the spice crop, too, has had an impact on the price.

Prospects of next crop

C Sadhasiva Subramanyam, Secretary, Kerala Cardamom Growers Union, said the second spell of rains in the last fortnight affected flowering of existing capsules leading to withering.

This will impact the availability of good cardamom pods this season and affect exports. Saudi Arabia is the major export market for Indian cardamom. Last year, the production was around 25,000 tonnes.

Re-pooling and auctions

On the re-pooling issue, he said the 48th AGM of the association, held in July, had discussed the shortcomings and requested the Spices Board to come up with a solution so that growers get remunerative prices.

Through the re-pooling system, the auctioned bid can be brought back again for auction. Thus the total quantity auctioned on a season will be much more than actual production.

However, Spices Board officials maintained that re-pooling was allowed as per the mandatory rules and such activities have been going on for years. It is a general trend to indulge in such practices when the prices are on the higher side.

According to Punnoose, the pesticide issue had put restrictions on cardamom exports to Saudi Arabia, but a strong domestic and upcountry demand made the sector vibrant.

Export markets

V Unnikrishnan, Sr Vice President (Plantations), AV Thomas Group of Companies, said the recent rains will not benefit the crop but only improve the plant health, giving a better crop next year. If at all there is an improvement in the crop due to rains, it can be pegged at an increase of an additional 5 per cent.

This sentiment has affected cardamom auction prices. There is some selective enquiry to Saudi Arabia. However, the majority of exporters realised that the production would be less this year and prices are expected to perk up once the importing countries start placing orders.

Published on October 08, 2018

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