Traders go on selling spree as prices decline to Rs 417/kg. |
The cardamom market witnessed a bearish trend with the prices of the near-month contract slumping by 9 per cent to close at Rs 417.70 a kg on Friday on the Multi Commodity Exchange (MCX). |
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The prices of November contracts closed at Rs 474, declining by 8.49 per cent, while both December and January 2007 futures prices dropped by about 6 per cent each. |
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Cardamom futures on the MCX crashed by 30 per cent in the last fortnight to Rs 456 on October 5 from Rs 630 on September 18. |
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The open interest too dropped by about 50 per cent to 2,41,000 contracts on October 5 from 3,92,000 contracts on September 18. |
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"This downtrend is a temporary phenomenon, which would be overcome soon," said V J Kurian, chairman, Spices Board. |
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The production would be hampered this year, as a result of 30 per cent crop losses in the aftermath of heavy rainfall in the major cardamom producing centres, including the South. |
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"We are expecting a production of about 9,000 to 10,000 tonne this year as against the total production of 12,000 tonne last year," Kurian added. |
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Countering Kurian's view, Yogesh Mehta, honourary vice-chairman, Indian Spice & Foodstuff Exporters' Association, rubbished the news of crop losses as rumours. "India's production is estimated at 13,000-14,000 tonne this year," he said. |
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Cardamom was overbought a fortnight ago presuming that its prices would skyrocket. |
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Many stockists had built their positions high to grab a large share of the export market, pushing the prices up on speculative buying. Now, they are offloading, said Mehta. During the last season (June-November 2005), the total production, according to trade sources, was estimated between 15,000-18,000 tonne, while Spices Board put it at 13,000 tonne. |
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During the same period, the domestic consumption was around 14,000 tonne, resulting in no carry-forward stock at the beginning of this season. The fundamentals for cardamom still remain strong, as the global supply is short, at present, as Guatemala, the largest cardamom producer, will be active only by the end of the year. |
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