Commodities

Cardamom sector pins hopes on Diwali to boost demand

V Sajeev Kumar Kochi | Updated on October 22, 2020 Published on October 22, 2020

The Covid-hit cardamom sector is pinning hopes on the upcoming Diwali season to perk up demand from the North Indian consuming markets.

Diwali is considered as the peak selling season for cardamom among households and confectionery sector across the country. But the pandemic situation has resulted in a subdued demand, hitting consumption across the markets that led to a price drop.

However, the commencement of the festival season has started reflecting in prices in the auctions. The average price realisation went up to ₹1,461 per kg from ₹1,375 in the last few weeks. But the rates in the corresponding period last year hovered at ₹3,000, traders said.

PC Punnoose, CEO, CPMCS Ltd, Thekkady, said that sales happening now are based on purely local demand. Despite heavy arrivals in the auctions, inventory with the trade is very minimal. Of late, there has been a 25-30 per cent increase in arrivals to the auctions especially after re-starting of daily two auctions on alternate days at Puttady in Idukki and Bodinayakkanur in Tamil Nadu from October 1.

On an average, the trading platform is getting 100-120 tonnes and this has affected the trade sentiments that led to low prices. Right now, there is no support buying from the trade for these heavy arrivals, which was the reason for a subdued demand, Punnoose said.

Moreover, the absence of a strong export buying for premium grades above 7-8 mm has also hit the demand. Continuous rains in growing regions and the present climatic conditions have ensured good productivity that would further reduce the prices. The trade is expecting a 30 per cent increase in production this season and the market is expected to be stable at the current price levels, he said. Last year, the cardamom production was around 15,000 tonnes.

V Unnikrishnan, Senior Vice-President (Plantations), AVT, said the industry is not expecting any major change in the price this season due to the current Covid situation. The festival demand has not picked up generally and the restrictions imposed on celebrations such as weddings, functions, etc has created a muted demand especially in North India. The export demand is also less, with no fresh enquiries.

According to SB Prabhakar, a cardamom planter of Pambadampara Estate in Idukki, the fall in prices is expected to kick-start demand as cardamom is bought on value terms. However, continuous fall in prices has got traders de-capitalised and there is delay in payments to them and to the auctioneers. Copious rain in October also added to the bearish sentiment. The prices will stabilise if combined auction arrivals per day is limited to 100 tonnes.

The sector is also witnessing acute shortage of workers for cardamom harvest, which is another hurdle in the wake of a 30 per cent rise in production more than the last season, he added.

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Published on October 22, 2020
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