Price Decline Likely To Help Cardamom Export.

A sudden plunge in cardamom prices in the ongoing lean season is worrying traders and farmers. After hitting a high of Rs 1,500 per kg in last two years, cardamom prices are oscillating between Rs 750 and Rs 800.

However, low prices could augur well for exports. The prices were hovering around Rs 1,000 per kg before dropping to around Rs 700 last week. Traders attribute this to heavy supplies during the May lean season.

"Rains early during the year have helped increase supply in the lean season. The new harvest season, which usually starts in July, may be advanced to June, resulting in low prices in the next few weeks," said PC Punnoose, general manager of Kerala Cardamom Processing and Marketing Co-operative Society.

Cardamom prices had hovered around Rs 1,100 per kg in May last year. They climbed to Rs 1,500 before stabilising around Rs 1,000 per kg. Planters have held over their stocks expecting better prices in May. But they have now been forced to sell them at lower prices before the next season. The low prices, however, favour exports. After a record 1,975-tonne shipment in 2009-10, cardamom export fell to 865 tonne for the 11-month period ended February 2011.

Guatemala, the largest cardamom producer, edged India out of the international market with low prices during the year. Guatemala sold cardamom for around $23 per kg, which was $3-4 lower than the Indian prices. Though the domestic prices have dropped, the country will not be able to take full advantage of the situation till the new crop arrives.

"Huge stocks remaining with planters are getting released to the market now. But most of them are not of exportable quality as the inventory has been with the producers for some time," said leading exporter SPGR Nityanandan, senior partner of SPG Ramaswamy Nadar & Sons. He said cardamom with faded green colour doesn't have good demand in the main market of Saudi Arabia .

"Due to high prices, the planters made a lot of money in the last two years and most of them were reluctant to sell below Rs 1,000 per kg," he said. When supplies pick up by July, better stock will be available for exports.

Spices Board is closely monitoring the situation as the price plunge was unexpected. Kerala Cardamom Growers Association secretary KK Devassia said the prices may remain in the range of Rs 800 to Rs 900 per kg by July with anew crop coming in. That would be a reasonable price for the grower, he added.

Source : economictimes.indiatimes.com