After record exports that held prices steady in 2020-21, the Indian cardamom industry is expecting sluggish demand and an oversupply, and prices are set to plunge in the coming months.
Just before the closure of the auction centres in Kerala and Tamil Nadu last week, with the states enforcing a lockdown due to the second wave of COVID-19, prices hovered in the range of Rs 800-1,000 a kg, down from Rs 1,500-1,600 a kg in the previous months.
Traders reckon that the declining trend will continue as the main consuming markets in the northern and the western parts of the country may remain paralysed till coronavirus cases come down. On the export front too shipments to West Asia have slowed down after the Ramazan demand.
“With demand drying up, most growers are saddled with carry-over stocks. Besides, with good summer rains, the next cardamom harvest to begin in two months will bring a bumper crop. These factors will spur a slide in prices,’’ said KK Saseendra Babu, MD, Vandanmedu Green Gold Cardamom Produce Co. Ltd.
Traders estimate that production may have been more than 15,000 tonnes in 2020-21.
As Tamil Nadu has extended lockdown to May end, he expects auctions to resume closer to the new harvest season. Hike in freight charges has also been a dampener for exports, he added.
When the COVID-19 crisis crippled the market in 2020, exports kept the hopes of the cardamom industry alive. The reported shortage of cardamom in Guatemala, the largest producer, also helped India to retain the competitive edge in prices in the global market.
Small cardamom has shown the highest growth rate among the spices exported from the country in 2020-21, as per Spices Board data. For the nine months ended December 31,2020, 4,300 tonnes of cardamom, worth Rs 724.75 crore, were exported. This represented an increase of 196 percentage in tonnage and 132 percent in value terms over the same period the previous year.
“As conditions were favourable, substantial quantities were exported in the last quarter of the year,” said Anjo Jose, ED of Mas Enterprises Ltd, a leading exporter. This may push cardamom export to a new high, closer to 6,000 tonnes. The highest so far was in 2017-18 when the export touched 5,680 tonnes but the value was Rs 609 crore then.
“At present, there is a scarcity of 7-8mm variety of cardamom, which is preferred by importers. The stock with the growers is mostly lower grade, which they are offering at Rs 800 per kg or below. New harvest season may bring fresh stock,’’ SPGR Nityanandan, another big exporter, said.
Growers fear a price below Rs 1,000 a kg will not help them cover production cost. “All the input costs, particularly labour charges, have gone up in recent times,’’ said PC Mathew, secretary of Cardamom Growers Association.
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