With prices showing some improvement, the cardamom sector is pinning hopes on the ensuing Onam and Diwali festival season for the demand to pick up from the upcountry markets.
The first round of harvest has already started in plantations in Idukki in the first week of August and farmers are expecting a normal crop in this season. It is pointed out that dry weather in June and continuous rains in July have led to the postponement of the harvest to August from the June-July period. The heavy downpour in growing regions also hit the crop settings with fungal diseases forcing farmers to spend more to control the disease to realise a good output in this season.
Average price realisation
PC Punnoose, CEO of the auctioneers CPMCS Ltd said the average price realisation in the auctions was in the range of ₹1,000 per kg which is still below the production cost of around ₹1,200. However, the farming community was able to liquidate their carry-over stocks in the first quarter, which would help the market to get fresh crop to this season. He said this would be a good sign as far as the trade is concerned.
At the same time, the upcountry demand for cardamom is still slow, thanks to a good sales in April, May and June that facilitated traders to sell around 7,500 tonnes, which is very high in the lean months. This stock is lying in many consuming centres and a revival of demand will depend on the sale of these stocks. With Diwali fast approaching, traders hope that the North Indian markets will generate more demand for cardamom, especially with the commencement of weddings and other functions.
“There are positive signs in the market this year especially in the absence of an excess production and no carry-over stock”, Punnoose added.
SB Prabhakar, a planter in Pambadampara Estate in Idukki pointed out that erratic weather this year with droppings in May/June coupled with fungal diseases in July/August has dented production, which is likely to drop by 20 to 25 per cent this season. However, expansion of area will contribute to enhanced arrivals in the auctions. The prices look set to be around the ₹900-1,100 mark for the next couple of months.
Expansion in area
There has been a rapid expansion in planted area from 2019 onwards and coupled with good husbandry practices have contributed to a surge in arrivals. The previous year crop is estimated to be around 33,000–35000 tonnes. Most of last season’s crop has moved to the consuming centres and growers have exhausted their stocks.
The demand is increasing from the North Indian markets as Covid has abated now. Overseas demand has also picked up and there are good enquiries for cardamom from West Asian markets.
An exporter pointed out that a good crop in Guatemala has put Indian cardamom in a disadvantageous position in many GCC countries. However, the shipment delays for the Guatemalan commodity to reach the Gulf markets will give a competitive advantage for the Indian crop.