Cardamom auction units upbeat as harvest ends

With the cardamom production season approaching its fag end, a slightly upbeat trend has set in at auction centres, mainly KCPMC of Kumily in Idukki district. Growers and traders are anticipating a strong bullish streak in the coming months as upcountry demand has improved considerably.

Reflecting the shift in the market during the last couple of weeks, KCPMC today quoted cardamom at Rs 325 a kg, higher by Rs 18 than the last auction level. The average price of is now in the Rs 300-310 range vis-a-vis below-Rs 270 levels seen during the first half of November.

Now only KCPMC is active in auction trading and the average arrival has dropped to 50 tonne in the recent auction trading as an indication that the harvesting season is close to the end.

A leading trader said cardamom prices might go further up as demand from north Indian traders was rather high now. He expects the average price to be around Rs 400 a kg by the end of this month.

But as a major chunk of the stock had been sold out, small and medium growers would not be able to benefit from the price upmove, the trader said, adding "a few large growers can reap the off-season advantage".

Also, there are reports that the north Indian market is short of cardamom as the stocking has been hit by the sealing of commercial establishments in New Delhi.

According to major traders, imports from Guatemala have not improved as much as expected earlier owing to a fall in production in that country.

There are reports that cross-border trading through Pakistan and Bangladesh is currently active and is a major concern for the domestic cardamom mart. Local growers said if cross-border imports were strictly curbed, the market could fetch much higher price levels during the off-season.

Market sources are rather bullish on the coming season as there might not be a sharp growth in national cardamom production mainly because of a static position in the acreage.

The static position of the cardamom plantation area is largely on account of non-remunerative price realisation during the major part of the harvesting season of 2006.

Although the current season is coming to an end by January, there is no clear picture about production yet.

Major growers are divided over production levels, but according to experts, it will be around 11,000 tonne. Some growers estimated the country's output at below 10,000 tonne.

K K Devassya, executive secretary, Cardamom Growers' Association, said the association was taking a stock of production from the quantum of arrivals at various auction centres. There would be a drop of 15-20 per cent in 2006 compared with the previous season production, he added.