Cardamom sector bets on festive season to boost demand

With prices showing some improvement, the cardamom sector is pinning its hopes on the upcoming Onam and Diwali festival season for demand to pick up in inland markets.

The first harvest cycle has already started in the plantations of Idukki in the first week of August and farmers are expecting a normal harvest this season. It is specified that the dry weather in June and the continuous rains in July led to the postponement of the harvest to August of the June-July period. Heavy downpours in growing areas have also hit crops with fungal diseases forcing farmers to spend more on disease control to achieve good production this season.

Average Achievement Price

PC Punnoose, CEO of Auctioneers CPMCS Ltd, said the average realized price in auctions was around ₹1,000 per kg, which is still lower than the production cost of around ₹1,200. However, the farming community was able to liquidate its carryover stocks in the first quarter, which would help the market secure new crops for this season. He said that would be a good sign as far as trade is concerned.

At the same time, the demand for cardamom from the interior of the country is still slow, thanks to good sales in April, May and June which allowed traders to sell around 7,500 tons, which is very high during the months lean cows. This stock is found in many consumer centers and a recovery in demand will depend on the sale of these stocks. With Diwali fast approaching, traders hope markets in northern India will generate greater demand for cardamom, especially with the start of weddings and other functions.

“There are positive signs in the market this year, especially with no excess production and carryover stock,” Punnoose added.

SB Prabhakar, a planter at Pambadampara estate in Idukki, pointed out that this year’s erratic weather conditions, with droppings in May/June combined with fungal diseases in July/August, have hurt production, which is expected to drop by 20 to 25% this season. However, the expansion of the area will help to increase arrivals at the auctions. Prices are expected to hover around ₹900-1,100 for the next two months.

Area expansion

There has been a rapid expansion in planted area from 2019 and, coupled with good husbandry practices, has contributed to an increase in arrivals. The previous year’s harvest is estimated at around 33,000 to 35,000 tons. Most of last season’s harvest has moved to consumption centers and growers have depleted their stocks.

Demand is increasing in North Indian markets as Covid has now subsided. Foreign demand has also picked up and there are good demands for cardamom in West Asian markets.

One exporter pointed out that a good harvest in Guatemala has put Indian cardamom at a disadvantage in many GCC countries. However, delays in shipping Guatemalan product to reach Gulf markets will give the Indian crop a competitive advantage.

Published on

August 22, 2022

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