Cardamom traders get edgy

Cardamom traders are expecting prices to recover after an imminent correction, which lasted for almost three weeks.

As north Indian buyers stayed away from the market, prices had dropped marginally by Rs 50 -100 a kg to Rs 400-450.

Traders said the reports that there will be a marginal increase in production, had prompted upcountry buyers to withdraw for a while, expecting a steep fall in prices.

The incessant rainfall for the last few weeks, especially in Idukki district of Kerala, has caused new shoots to come up. Leading growers in the district told Business Standard that there would be a marginal rise in production due to the favourable climate.

The shortfall in rains during June had hit the crop badly and consequently overall output had come down 20-25 per cent. However, the recent torrential rains in the state had brought in a change and there might be 3-5 per cent rise in production. But it is not expected to cross 15,000 tonne.

The best quality 8 mm bold was quoted Rs 550 -560 a kg, which had reached up to Rs 600, a few weeks back. Prices of lower grade, which was quoted for Rs 250 -300 earlier, is now available at Rs 200 and 6 mm grade is having a tag of Rs 200-300.

Expecting an increase in supply, the north Indian traders have slowed down their buying and hence the temporary fall in prices. But experts in futures trading said it was a correction, which was well in due for last 3-4 weeks owing to 50 per cent increase in prices from last year's tags.

But it is the volume import from Guatemala, world's largest producers of cardamom, that will determine the future of domestic market.

The season in Guatemala will be in full swing from November to December and a major chunk of traders expect a sharp increase in imports although Union ministers for finance, commerce and agriculture had assured that illegal transportation through Nepal would be curbed strictly this time.

Most of the pan and masala manufacturers are using imported stuff which is inferior in quality, but it has an attractive price advantage compared with the domestic stuff.

"We are eagerly waiting for the government to curb smuggling through Nepal borders and in his recent visit to Kerala, agriculture minister Sharad Pawar had assured that illegal import would be curbed at any cost", said KK Devasya, executive secretary, Cardamom Growers' Association of Idukki.

The cap imposed on quantity imported from the Saarc nations will also have positive impact on the domestic market as cardamom from Guatemala is imported through Sri Lanka also.