Cardamom at 10-year low on output rise, low demand

Cardamom prices have slipped to a 10-year low even as production has touched record level of 12,500 tonne this year (April-March), dealers said on Wednesday. Demand has not picked up with the rise in production and this is a major reason behind the fall in prices, they said.

The average cardamom price now is around Rs 175 a kg, which is one of the lowest since 1995-96, said George Valley, a cardamom grower. "The present price is not enough to meet even production cost, which would work out to Rs 300 a kg," he said. Growers are indulging in distress sales as they have no other choice, said another grower. Cardamom fetched a good price during the four-year period between 1997-2001.

"The average price was between Rs 560-600 a kg during this period," the grower said.Rise in output due to favourable climatic conditions in cardamom growing areas of Kerala and Tamil Nadu also led to the fall in prices this year.

Initial estimates by the Spices Board has placed output this year (April-March at 12,500 tonne, compared with 11,400 tonne during the same period a year ago. However, unofficial estimates placed output above 13,000 tonne this year.

Proposals by the Spices Board to introduce export subsidy for cardamom and hike in import duty from the existing 70 per cent to 100 per cent are pending before the commerce ministry.

The Spices Board has also asked the commerce ministry to restrict cardamom imports through only a designated port. Growers allege cardamom imported by Nepal via Kolkata gets diverted to the domestic market, leading to downward pressure on prices.

India lost its leadership status in global cardamom exports in the late 1980s with the emergence of Guatemala as the leading producer and exporter of the commodity.