Cartel accused of controlling cardamom prices

Cardamom growers and traders are puzzled over the low prices despite declining stocks of the spice, especially in the offseason. They blame a cartel of traders for controlling the prices and keeping them low.

The average prices of the spice is in the range of Rs 370-375 a kg at various auction centres, even as daily arrivals to these centres have fallen to 20-25 tonne from around 100 tonne earlier. The average price in the 2006-07 season is around Rs 300 a kg, which is a better price realisation than the previous season's, which was around Rs 240-250 in the 2005-06 season.

Growers were expecting a better price of around Rs 400 a kg, owing to a drop in production by 15 to 20 per cent and rising demand for the spice.

According to the market fundamentals, there should have been a steep rise in prices between March and May. But this was not happening, thanks to a cartel of traders dictating the prices. Although the arrivals to auction centres had come down by 70 per cent, it was not reflected in the prices effectively, said a leading Kochi-based trader.

A section of the farmers blame the Spices Board for its inaction in initiating an effective mechanism for online auction. The board had announced that an e-trading platform would be operational this season, but nothing has happened on this front so far. They said the board and the government were not serious of implementing e-auction, as the trade was being controlled by a few big traders in Tamil Nadu.

Farmers feared that the next season, beginning July, would be disastrous, as most of the cardamom-growing area in Idukki district was experiencing severe drought. If the drought continued further, the production would be affected seriously. The next crop was mainly dependent on summer rain, said a grower.