Cardamom prices may touch all-time high on poor crop

Cardamom prices are set to rise to record levels during the current year due to lower and delayed crop in the country. Domestic auction prices had gone up 27.7 per cent to Rs 771 a kg in July, against Rs 604 a kg in the year-ago period.

“Drought in major producing regions in Kerala has not only delayed cardamom crop for 2012-13, but also lowered it. Extended dry spell and drought have caused wilting of plants and hence productivity has suffered,” United Planters’ Association of South India (Upasi) said in its latest report.

During 2011-12, cardamom production went up 25 per cent to 12,975 tonnes against 10,380 tonnes in the previous year. Kerala accounted for a major share in the total production at 10,222 tonnes. Karnataka and Tamil Nadu stood at the second and third positions with 1,911 tonnes and 842 tonnes, respectively.

The turnaround in cardamom prices since 2006-07 continued during 2010-11. The price realised at auctions increased from Rs 878.7 a kg in 2009-10 to Rs 968.3 a kg in 2010-11. The increasing trend, however, could not be sustained during 2011-12, as the prices fell by Rs 323.3 a kg to reach Rs 645.1 a kg. The record export level in 2011-12 has partially helped in arresting the free fall in prices to a certain extent, Upasi said in its latest annual report.

The year 2011-12 witnessed all-time high exports of 4,650 tonnes valued at Rs 363.2 crore, compared to 1,175 tonnes valued at Rs 132.2 crore in the previous year. This helped increase the value realisation by Rs 231.1 crore, despite a fall in the unit value realisation by 30.6 per cent at Rs 781.1 a kg.

Export from India was higher since Guatemala has not recovered from the damages that cardamom plantations suffered. Major importers of Indian cardamom are Saudi Arabia, UAE, Kuwait and Egypt.

Cardamom traders, however, expect prices may touch a new peak of Rs 2,000 a kg this year due to damage of crop in Kerala coupled with high export growth. “The erratic monsoon and drought-like conditions have led to a fall in production this year in Kerala’s Idukki district, which is the main centre for cardamom in India. Lack of rainfall during this season has already damaged crop by more than 40 per cent till date,” a trader at Upasi’s 119th annual conference here, said.

Generally, harvesting of cardamom starts from July. Cardamom plant requires summer showers for new offshoots to grow resulting in new pods of cardamom.