A delayed harvest is likely to help the cardamom market stay firm and rally on export demand. Arrivals are likely to peak only after July as against the normal period of June, due to drought-like conditions in the first quarter of 2016. India is the second largest producer of cardamom in the world after Guatemala and the biggest consumer of the spice. Guatemala leads with 60-66% of the world production, but has seen production come down in the past few years due to natural disasters like flood.
Harvesting will be delayed due to the weather factor; there will be good supply in the market during August-October, KK Devassia of Cardamom Growers Association said. “The damage due to intense drought is limited, as plants have not been damaged much, but the yield is likely to go down substantially,” he added. Cardamom plants are very sensitive to rains with productivity directly related to the volume of rains and number of raining days.
Devassia said that imports from Guatemala, which could depress the market, is reported to be absent because of lower production in that country. Higher domestic prices always leads to higher imports from Guatemala, as the global prices constantly stay at a discount when compared with Indian prices.
Angel Commodities reports that cardamom futures contract traded on the Multi Commodity Exchange (MCX) has been on an uptrend since mid-February. The prices have jumped by more than 46% to touch R891.9 per kg from close to R600 in February. “The harvesting for the 2015-16 season ended in March, the next crop is likely to be available after July, and this phenomenon appears to have supported the market sentiments to be bullish in last four months,” Angel Commodities sources added.
For the past three years, cardamom supply and auctions were round the year unlike in the past where there was a monsoon break. Spot prices at the MCX counter on Tuesday evening showed R846.10 per kg while the auction platform of the Spices Board recorded R789.85 per kg on the same day in the auction conducted by South Indian Green Cardamom Company.
Angel Commodities reports that for 2016-17, cardamom production may be less than last year’s production because of dry weather during crucial summer season when the plant requires good rains affecting the flower setting and consequent delay in the harvest.
