Tight supply pushes cardamom to new high

Tight supply and a drop in output has seen the average prices of cardamom at the Bodinayakanur (Tamil Nadu) auctions touch a new high of ₹1,752/kg.

Of the 68,850 kg on offer, around 68,091 kg was sold, with the highest lot receiving a price tag of ₹2,098/kg at the auctions conducted by SpiceMore Trading Company, Kumily (Kerala). “This is a record price and the market is on a rising trend, especially at the fag end of the season,” PC Punnoose, CEO, Kerala Cardamom Processing and Marketing Company told BusinessLine .

According to Punnoose, the absence of adequate summer showers has badly affected the crop, leading to a production drop of more than 40 per cent vis-a-vis 25,000 tonnes last year. At present, there is no picking activity in plantations, which will lead to a delay in the next crop season. Normally, the cardamom season starts in June-July, but this may be delayed till July-August because of the continuous drought-like conditions.

It was only in November that several growing areas received decent showers and after that, there was barely any rain for five months. “Even the scattered rains we have received last week were not sufficient. This will further impact arrivals at auctions and the situation is likely to continue in a similar manner,” he said.

However, there were also allegations that small and marginal growers are not getting the benefits of the price increase and the real beneficiaries were the middlemen who stocked sufficient quantities.

As production was on the lower side, growers were forced to sell their crop.

Price surge

The average prices at auctions have moved up by close to a third since the beginning of the year. The auction prices, which were hovering at the ₹1,300 level at the beginning of the year are now in the ₹1,700-1,750 range.

V Unnikrishnan, Senior Vice-President (Plantations), AVT Group of Companies, said that cardamom prices would be buoyant in the coming days due to short supply.

Moreover, there is a huge domestic demand especially in upcountry markets.

However, it is turning out to be a difficult proposition to grow cardamom even in traditional growing areas due to factors such as climate change, labour shortage, water availability etc. Cardamom is no longer a rainfed crop as it was in the earlier days. The crop requires adequate irrigation to grow.

The availability of water is tight due to government restrictions on drawing water from rivers and streams. This has forced many growers to opt for innovative means such as rainwater harvesting, ponds etc, which would be an expensive affair, he added.

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