Cardamom likely to hit Rs 450/kg on low output

In line with the expectations of growers, cardamom prices are on an upward trend.

Rising demand from North India, low output in Guatemala leading to lower imports and reports of shortfall in domestic production have been pushing up prices of the spice.

The spot prices are ruling around Rs 350 a kg for average quality. Market sources estimate the prices to be in the range of Rs 400-450 in a month.

Sealing of commercial establishments in Delhi a few weeks ago has badly hit cardamom stocks in North India. Besides, lower imports from Guatemala have further fuelled the demand for the spice there, resulting in higher tags.

The spice was going through a transition phase from excess stock to one of shortage, with the impact of shortfall being fully felt by April, said a trader.

It was interesting to note that a chunk of cardamom offered for auction at various centres had been traded earlier. Auctions such as these were mainly planned by a group of traders who actually controlled the trade to maintain a level of supply at the centres despite a shortage of the spice. E-auction could put an end to this problem.

But, in spite of an announcement in June last to start e-auctions, nothing had happened so far, said another trader.

Market sources are bullish over the next cardamom season (June 2007- January 2008), as they estimate the production not to increase sharply, mainly due to a static position in cardamom acreage.

Low returns in the 2005-06 season have led to little change in the acreage. They expect the crop to be around 10,000 tonne in the next season (June 2007-January 2008).

On an average, the country's annual production is 12,000 tonne, with a domestic demand of 8,000 tonne and exports of around 2,000 tonne. The average carry-over stock makes up about 2,000 tonne.