Cardamom futures contract on the Multi Commodity Exchange (MCX) plunged about 20 per cent last week. The contract plummeted to a multi-month low of ₹995.1 per kg and recovered slightly in the last trading day of the week. The forecast of an early and normal monsoon for 2017 over Kerala, the key cardamom growing State, added negativity to the market.

Further, good pre-monsoon showers in cardamom-growing regions, which have boosted the yield, added more pressure on the futures contract prices. Idukki in Kerala received rainfall of 78 mm, higher by 52 per cent of normal rainfall between May 11 and May 17 and the seasonal rainfall from March 1 till May 17 was higher than the normal by 14 per cent. According to the IMD, the monsoon in 2017 could be ‘normal’ and bring 100 per cent rainfall instead of 96 per cent as was predicted earlier. The monsoon had already advanced to parts of south-east Bay of Bengal, Nicobar Islands, entire south Andaman Sea and parts of north Andaman Sea on May 14. The IMD has said that monsoon is likely to set over Kerala on May 30 with error of +/-4 days against its normal onset date of June 1.

For the upcoming week, cardamom futures are expected to register some recovery from the fall and trade higher initially during the week. But we expect recovery to be limited on prevailing weak factors in the market.

The writer is Head-Commodity Research, Karvy Comtrade

Related Topics
comment COMMENT NOW