Cardamom prices to rise on low crop this year

Traders say prices may touch a new peak of Rs 2,000 per kg this year due to damage of crop in Kerala coupled with high export growth

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 have gone up 27.7% to Rs 771 per kg in July this year against Rs 604 per kg in the year ago period.

“Drought in major producing regions in Kerala has not only delayed cardamom crop for the year 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% to 12,975 tonne against 10,380 tonne in the previous year.

Kerala accounted for a major share in the total production at 10,222 tonne. Karnataka and Tamil Nadu stood at the second and third positions with 1,911 tonne and 842 tonne respectively.

The turnaround in cardamom prices since 2006-07 continued during 2010-11. The price realised at auctions increased from Rs 878.65 per kg in 2009-10 to Rs 968.34 per kg in 2010-11.

The increasing trend, however, could not sustain during 2011-12, as the prices fell by Rs 323.30 per kg to reach Rs 645.04 per 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 tonne valued at Rs 363.22 crore compared to 1,175 tonne valued at Rs 132.16 crore in the previous year. This helped in the value realisation to increase by Rs 231.06 crore, despite a fall in the unit value realisation by 30.6% at Rs 781.12 per kg.

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

Cardamom traders expect the prices may touch a new peak of Rs 2,000 per kg this year due to damage of crop in Kerala coupled with high export growth.

“The erratic monsoon this year and drought like conditions have led to drop 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 cardamom crop by more than 40% till date,” a trader at Upasi’s 119th annual conference said.

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