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Cardamom growers fret as prices slide

Off-season unloading of stocks continues, even as next harvesting season to begin in a few weeks

George Joseph Kochi
Last Updated : May 09 2013 | 11:37 PM IST
Unwinding of large stocks has caused a crash in the prices of cardamom at various auction centres in the past two months.

The average price today was Rs 558 a kg, down from Rs 658 in the last week of March. It has been a continuous fall over the past fortnight - it was Rs 626 a kg on April 20 and Rs 590 a kg on April 27.

This has caused worry for growers in Kerala and Tamil Nadu, with the next main harvesting season set to begin next month. A section of growers from the Vandanmedu-Udumbanchola area of Idukki district told Business Standard the price might even slide below Rs 500 a kg, as cardamom is still coming in large quantities to various auction centres.

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K K Devasya, former president of the Cardamom Growers Association, said auction centres were getting 25-80 tonnes per day even in this off-season. This is mainly because of the unwinding of stocks by farmers.

"There might be a heavy fall in prices once harvesting starts. Supply from producing centres is active now and once the season starts, it might cause a sharp fall in prices," said K P Michael, a Kochi-based trader.

In recent years, prices have ruled higher during the harvesting season (June-October) but a major segment of growers stock the fresh crop to reap the off-seasonal price advantage. This causes a sharp increase in supply during the off-season, the main reason for the current fall in prices.

Also, during January-April, cardamom from Guatemala comes to India. The spice also comes from Pakistan and Bangladesh through unofficial channels. North Indian markets are flooded with cardamom, coming through the border with Nepal and Bangladesh. According to official data, import of cardamom during the January-March period was only 200 tonnes but growers said the actual import was much higher, as 70 per cent of the cardamom from Guatemala comes through smuggling.

Devasya says till some years back, auction trading came to a halt during April-May because of the very low quantity offered. Nowadays, however, auction trading is active through the year and gets more vibrant during the March-May period. Instead of a crunch, supply increases during the off-season, as noted earlier. This, coupled with import from Guatemala, causes a sharp fall in prices during January-May, an abnormal market situation.

There has also been a recent increase in cardamom plantation in both Kerala and Tamil Nadu. This has raised production and ensures supply through the year. A leading grower said though the main harvesting season was June-October, cardamom was now plucked through the year, though in small quantities.

As for the coming season, growers said production is likely to be better, as most planted areas got summer showers on five to six occasions. This is beneficial for plantations. Some parts of the planted areas in Idukki district, which account for 45 per cent of total production, were badly affected by heat in February and March. However, this will get compensated, as sowing has been increasing over the past two to three years. If the high ranges of Kerala and Tamil Nadu get a good monsoon, production will shoot up. According to a planters' estimate, total production is likely to be 12,000-14,000 tonnes this season. It all depends on a good monsoon, they said.

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First Published: May 09 2013 | 10:34 PM IST

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