Spices Board subsidy on cardamom exports

The Spices Board has introduced an export subsidy scheme to boost cardamom exports to west Asia by air. Commenting on the scheme, CJ Jose, chairman of the Spices Board, said the scheme was targeted at the west Asian market during the Ramzan season.

Under the scheme, a subsidy to the tune of Rs 30 per kg will be paid to exporters.

It would provide some relief to cardamom growers, who were currently in severe difficulties caused by dumping of the spice from Guatemala through Nepal.

Cardamom prices plunged to record lows here recently as huge oversupply of the spice in a market which had comfortable carry-over stocks and witnessed moderate demand growth.

The best quality 8mm bold variety was selling at an average price of Rs 350 per kg in the auction trade.

The grade had slumped to Rs 250/kg recently when dumping was at its peak but recovered thereafter, said traders at auction centres. Till 2002-03, the price of the 8mm grade was around Rs 800- 900/kg.

According to traders, north Indian markets were flooded with cardamom from Guatemala smuggled through the Nepal border.

As 90 per cent of the total production in India was consumed locally, the dumping in the Indian market became a major problem for growers mostly based in southern India.

The ban imposed on pan masala type products in some states also affected demand in those markets.

The pan masala segment consumed on average 3000 tonnes before the ban. Consumption was around 1500 tonnes this season.

The estimated total cardamom production this year was expected to be about 11,000 tonnes, almost at par with last year's production.

Last year, exports were to the tune of 1000 tonnes.

Jose said total production in Guatemala was around 25,000 tonnes and internal consumption in that country was almost nil. Guatemalan exporters were therefore in a position to offer very low prices in the world market.

India's traditional export markets were Japan and west Asian countries. Jose said the easy availability of the product at low prices in north Indian markets had led to a situation where traders were refusing to hold substantial quantity as stock.

Guatemalan exporters had earlier dumped the spice in the 1998-2000 period.

Growers had been hit badly then, with prices crashing to below Rs 200/kg.

Prices revived in 2002-03 till the current wave of dumping led to this season's slump.