Cardamom prices up 35% on fear of lesser production next season
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Cardamom prices are on the rebound due to good consumption by traders and stockists. Prices have moved up by 35% after auctions resumed on November 7 after a gap of nearly fifty days. Possibility of lesser production in the coming season due to lower rains in the producing regions is also adding to the sentiments.
"With no auctions for 50 days supply pipelines and carryover stocks are almost empty. Traders and stockist are replenishing the pipelines after the sales of Diwali and demand is robust," PC Punnoose of Cardamom Processing Marketing Company (CPMC), Kumily, told FE. Cardamom auctions were disrupted form October 1 with traders abstaining from it complaining of irrational increase in the incremental price for bidding by the Spices Board. The board controls the e-auction process and had increased the incremental price of bidding to Rs 5 from Rs 0.50. Later, the board reduced the incremental bidding from Rs 5 to Rs 2 following directions of the High Court of Kerala. India produces around 10,000-12,000 tonne of cardamom annually with the total global production pegged around 35,000 tonne.
Spices Board on its part is thinking of opening up the system by amending the existing laws, which calls for licensing of dealers. "Frequent disruptions have become regular in the cardamom auctions and it is impacting trade. Opening up the system or brining new dealers would help in better returns to the seller," board sources added. Spices Board is committed to issuing more small cardamom dealer licenses to increase bidding participation in the e-auction.
Lesser rains in the cardamom producing high ranges of Kerala state during June and July is likely to delay the arrival of the next crop by one or two months from the normal time of July, traders said. "Monsoon rains were lower in Idukki and the next crop would be lesser by 50%. The drought like situation during June and July damaged most of the plants and yield would suffer," PC Punnoose said. The last production (2011-12) could be as high as 15,000-16,000, trade sources said. Spices Board estimates India's production in 2010-11 to be 10,350 tonne, which is almost the same as 2009-10 figures.