Guatemala harvest fear grips cardomom

Domestic cardamom growers are afraid that with the harvest in Guatemala starting in December, smuggling through the Nepal border may impact prices here.

Though there has been a drop of Rs 100-150 per kg during the last 6-7 weeks, growers are more or less happy with the current price tags.

Guatemala is the world's largest cardamom producer and as the commodity pours in, domestic demand will be affected, which, in turn, may cause a crash in price tags.

Domestic growers had not expected a price fall during Diwali and Ramzan. However, much to their dismay, the prices dropped by Rs 100-150 per kg.

A leading grower attributed the drop to the withdrawal of north Indian buyers from the market expecting Guatemalan produce to enter shortly.

Best quality 8 mm bold grade is now fetching Rs 400-450 a kg, which had touched Rs 600 mark eight weeks back. Like wise, the price tag of average grade has dropped to Rs 300-350 from Rs 400-450 earlier.

Interestingly, during the 2005 season the average price was just half the current average price.

Good rainfall in growing areas has propped up production marginally. However, total output will be lesser by 15-20 per cent this time at 11,500 tonne (13,000 tonne last year).

Contrary to the expectations of the upcountry buyers that output might surge on account of the good monsoon, the increase will be marginal according to growers from Idukki district of Kerala.

Meanwhile, the Kerala State Warehousing Corporation (KSWC) has geared up to expand its storage capacity as there is hectic activity in the futures trading. The corporation will expand the storage capacity by an additional 200 tonne from the current 100 tonne.

KSWC sources said tenders would be invited soon for construction of additional warehouses.

Growers have demanded strict control over the quality of the product in futures trading as better quality will ensure the future of cardamom market. Quality has been an issue in the past as inferior quality produce had entered the market.