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Cardamom prices may stay high

G.K. Nair

Kochi, Dec. 24

THE prices of Indian cardamom are likely to remain at moderately higher levels during the current season as the production in Guatemala, the major supplier in the global market, is reported to be much below the projected 14,000 tonnes this year.

The crop in Guatemala had not recovered fully from the previous year's drought conditions and as a result the production was estimated to be around 10,000 tonnes. The quality was also stated to be inferior to the Indian produce, according to major cardam om growers of Kerala's Idukki district.

The demand for Indian cardamom in the Gulf, especially Saudi Arabia substantiated this argument, they said. Besides, the quality of cardamom from Guatemala in these markets was also inferior, they claimed.

On the other hand, Mr Prabhakar, Managing Director, Pampadumpara estate, a major cardamom and coffee grower in the Idukki district, said the Guatemalan currency Quetzal had been steady in the last five years and as a result the farmers there were not get ting a good price. This was against the depreciation of the Indian rupee from Rs 31 against dollar in 1995 to Rs 46 in 2000. The depreciation had helped the prices to move up benefitting the farmers here.

The Indian cardamom was available in the international market at $12 to $13 per kg and that was on par with the Guatemalan price, he pointed out. Given this scenario, there was a good export potential for cardamom this season and it might cross at least 900 tonnes by March, he said.

According to him, India could build up a good market share in the Gulf countries through strategic promotional activities and should maintain that share at 1,500 tonnes every year. ``The promotional activities should focus on exports and not aimed at the domestic market which can grow on its own,'' he said. If India were able to export 1,500 tonnes every year the prices could be maintained at an average of 450-475 per kg notwithstanding the farmers raised their productivity per hectare, he said.

Presently, 30-35 per cent of the auction sales went to the exporters. Besides, the increased activity by domestic buyers in recent days was indicative of the non-availability of Guatemalan cardamom at lower prices, he said. However, any sharp rise in the domestic prices would result in the exporters burning their fingers, he predicted.

There were no rains in the growing areas during the past several weeks and this could result in a decline in the late crop this season narrowing down the arrivals in the months to come. In that case, the prices could move up substantially, he said. Short supply could raise the domestic prices in February/March to an average Rs 630-640, he said.

The Guatemalan production, he said, was unlikely to go up beyond 10,000 tonnes next year also and hence the cardamom prices till December 2001 could remain at moderate levels. Added to this, the growing domestic demand was narrowing down the exportable s urplus in the country, which was evident from the sharp decline in exports since late 1980, he pointed out.