Cardamom on MCX settled up 2.55% at 1174.1 amid uptick in physical demand for cardamom in the domestic spot market. Further, tight stock positions on restricted supplies from producing regions too fuelled the uptrend. Good domestic demand continued to persist at a time when the arrivals were showing a declining trend. The extended dry spell with high temperatures that prevailed from December 2015 to the first fortnight of May 2016 affected the flower setting, thereby delaying the harvest. According to trade sources, dry weather has affected about 10-15 per cent of cardamom plants and an estimated a loss of 20-25 per cent in production in Kerala’s Idukki district, which produces 80 per cent of the small cardamom in the country. Thus, cardamom output is pegged at about 17,000-18,000 tonnes next year compared to 25,000 tonnes last year. Currently, cardamom arrivals have been slowing down because of non-availability of good quality grade capsules. Export shipments in 2016-17 are expected to drop due to expectations of less availability on higher domestic consumption and higher prices. Domestic consumption is expected to be about 12,000-15,000 tonnes. The country exports roughly 15-20 per cent of its total cardamom production, thus, next year exports may be around 3,500-4,000 tonnes. Last year, cardamom exports jumped 35.8 per cent over the previous year to 5,938 tonnes, according to Department of Commerce data. The growth was driven by higher production and lower prices. Technically market is under short covering as market has witnessed drop in open interest by -5.48% to settled at 915 while prices up 29.2 rupee, now Cardamom is getting support at 1148.2 and below same could see a test of 1122.2 level, And resistance is now likely to be seen at 1189.1, a move above could see prices testing 1204.

Trading Ideas:

Cardamom trading range for the day is 1122.2-1204.

Cardamom prices ended with gains amid uptick in physical demand for cardamom in the domestic spot market.

Good domestic demand continued to persist at a time when the arrivals were showing a declining trend.

Dry weather has affected about 10-15 per cent of cardamom plants and an estimated a loss of 20-25 per cent in production.

Cardamom prices in spot market dropped by 1.50 rupees and settled at 1062.10 rupees.