The production of cardamom is expected to increase 10-12 per cent this year. It is expected to be 13,000-13,500 tonnes compared to 12,000 tonnes last year.
Last year, higher prices had prompted farmers to go for more crop.
While higher production might have had a dampening effect on prices, a major factor that can keep prices under pressure is the high carryover stock.
"This year, the total carryover stock for cardamom is around 2,000 tonnes," said Moolraj Ruparel, a Mumbai-based exporter. The total carryover stock last year was almost zero. This year, daily arrivals at the auction held by the Cardamom Planters' Association in Kochi was 25 to 26 tonnes, unusually higher for this time of the year.
The traders are expecting prices of new crop to be lower at Rs 650-700 a kg due to better crop condition when arrivals reach their peak. The spot price of old crop is currently at Rs 800-900 a kg and is exported at $19-27 a kg. This has caused stockists to bring their old stocks to the spot market as prices are expected to fall further. Also, it is not possible to store cardamom for more than nine months which has also caused stockists to enter the spot market. In Mumbai, the price of average quality cardamom is Rs 920-940 a kg.
The arrival of the new cardamom crop is expected to start early this season. This was mainly due to forecasts of timely monsoon in the southern region along with some showers in the major producing areas during the capsule formation period (March To April).
Turmeric futures for April added Rs 28, or 0.44% to Rs 6,336 per quintal in 27,780 lots