Dealing Room Check

The MCX Cardamom futures contract fell sharply during the week ended January 27. Most active February futures contract started the week on a negative note and traded in the red for a major part of the trading session. A slowdown in buying amid increased supplies following higher prices in the spot market weighed on the sentiments of traders in the cardamom futures market.

Further, forecasts of rainfall in Kerala and Tamil Nadu during the week, which is good for the crop, pulled prices down. The February month futures contract touched a low of ₹1,443/kg before closing the week at ₹1,468/kg, down by 4.97 per cent while the next month March futures contract closed at a loss of 6.06 per cent from the previous week’s close.

During auctions from January 23 to January 27 at spot auction centres, supplies were on the higher side as prices had increased in the prior week. This resulted in a slight slowdown in trading activities during the week. Average prices during the auctions were in the range of ₹1,340-1,367/kg, which is lower by ₹11-21/kg compared to last week. Harvesting of cardamom in the current season has almost ended and the crop size is expected to decline sharply by around 40-50 per cent compared to the previous season.

Outlook

For the week ahead, cardamom futures prices are expected to recover on concerns over tight supply. As the harvesting is almost complete, supplies are expected to drop in the coming days.

The writer is Head-Commodity Research, Karvy Comtrade

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