Cardamom prices up 5% on supply crunch

Cardamom prices moved up 5 per cent after Diwali because of supply shortage in Mumbai. Last week, the market was in short supply by around 25,000-30,000 kg, as traders had indulged in holding back their stocks to create an artificial crisis and, hence, a price hike.

The current price rise has lifted the 8-mm cardamom (fast colour) to Rs 41,000-42,000 per quintal, while faint-colour variety is quoted in the range of Rs 39,000-Rs 40,000 per quintal. Low-quality cardamom, generally used with pan, is currently sold in the range of Rs 20,500-Rs 21,000 per quintal.

"We generally see a supply of about 2,00,000 kg per week, but in the last week supply was short of demand, and hence, there was a rise in prices for a the time being. Although the stockists in the production centres are releasing stocks and auctions are taking place, the volume has come down drastically," a Mumbai-based trader said on condition of anonymity.

"Cardamom arrivals are expected to go up by November 15 if auctions happen as usual. But, if auctions are low again, it would obviously have a cascading impact on prices," the trader said.

Till today, consumption is equal to supply, and there is no leftover in the warehouses. Therefore, traders are buying from physical markets at higher prices and selling in similar proportion too. Cardamom production is expected to increase by around 12 per cent this year to 13,000-14,000 tonne, following good crops throughout the country.

Cardamom exports are projected to see a rise in a similar percentage to around 1,000-1,200 tonne, compared with 750 tonne last year.

Indian cardamom is high on demand mainly in Saudi Arabia and Japan, but the country also exports good-quality cardamom to Germany and a couple of other countries.

The trader further said western people prefer cardamom from Gautemala "� poor in quality and heavy in weight. In India, too, pan parag and gutkha manufacturers import cardamom from Gautemala as they are rich in volume but poor in quality which suits the gutkha industry's requirement.

The total cardamom imports are expected to touch 1,000-1,500 tonne this year, the trader added. India meets approximately 60 per cent of Japan's total consumption of about 600 tonne, the rest of which the eastern country meets through imports from Gautemala.

Domestic cardamom traders have no objection in importing cardamom from Gautemala, but the import duty of about 75 per cent, according to them, is really a burden.

Due to increase in production, cardamom prices are projected to remain steady in this fiscal. However, the outlook for Indian cardamom appears bright.