Cardamom in bear grip

The cardamom futures contract on NCDEX saw prices drop for the 12th consecutive week during the week ended April 21. Selling pressure in the spot market ahead of fresh harvesting of the new season crop weighed on prices. Further, good summer showers in Idukki district of Kerala, from where more than 70 per cent of India’s cardamom crop comes, resulted in better yield expectations.

The sharp fall in prices can also be attributed to normal monsoon 2017 forecasts which were released during the middle of the week. There is a 50 per cent chance of El Nino occurring after August which means there will be no major impact on rainfall due to El Nino in the first two months of monsoon, which is very crucial for the cardamom crop.

Export demand for cardamom, mainly from Saudi Arabia which usually picks up April-May, is limited currently as most exporters are believed to have covered their requirement earlier fearing shortage of stocks.

Cardamom futures price touched a five-month low of ₹1,160 per kg and a high of ₹1,265 per kg. It closed the week at ₹1,188 per kg, down by 5.9 per cent over the previous week. At spot auctions, prices fell to a low of ₹881 per kg, down by ₹134 per kg from last week.

Outlook

Cardamom futures prices are expected to continue to trade on the lower side for the week ahead. Some recovery in price is not ruled out, though, given that the prices have fallen over 23 per cent in the past two-and-a-half months.

The writer is Head-Commodity Research, Karvy Comtrade

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