Cardamom up 6% on strong Saudi demand

Cardamom prices have surged about 6 per cent in the last four days on exponential demand growth from Saudi Arabia. The prices of bold variety, mainly used for individual consumption, have gone up by Rs 25 to Rs 425 from the Rs 380-400 a kg level.

Medium-quality cardamom, largely used by gutkha and pan masala manufacturers, has surged by Rs 10-15 to the level of Rs 210-240 a kg, while low-quality cardamom, used mostly by panwalas, is quoting in the range of Rs 210, a gain of Rs 10 in the last four days.

"In the last 10 days, we have exported huge quantity of good-quality cardamom to Saudi Arabia, and orders are still flowing in. This year, till today, India has exported about 500 tonne of bold-quality cardamom to Saudi Arabia where demand of Indian variety is much higher," a local trader said.

The industry is expecting to export another 300 tonne this year, for which the orders have already been placed with the suppliers.

"Today, individual consumers have also increased their consumption hugely owing to lower prices. Earlier, cardamom consumption was symbolic of the rich class, but today the sentiment has changed with falling prices," added the trader.

Now, a substantial part of the cardamom demand is coming in from the middle-class for a number of consuming areas. Earlier it was not affordable for the middle-class consumers when the prices were ruling above Rs 800 per kg a few years ago, the trader explained.

This year, cardamom production is expected to increase about 20 per cent to 12,000-13,000 tonne as plantation has also risen about 10-15 per cent. At the same time, plantation area, too, has grown 5-10 per cent with farmers' increased focus on research and development (R&D).

"R&D has renewed enthusiasm for better production and price realisation. Farmers have, therefore, started taking interest in cardamom production.

Further, the climate is favourable and crop condition better. So, this year, cardamom production is expected to jump, the trader added.

Generally, arrivals of the bold variety cardamom start dwindling from the January-February period with the end of sowing season. So, the price rises substantially during this pre-harvesting season.

Marriage season and other occasions drive the physical demand growth.

This year (2006-07), with aforesaid factors in play, the cardamom prices are expected to increase 10-15 per cent in the pre-harvesting season (July) on increased domestic as well as export demand.