Festival season in Gulf perks up cardamom demand

Kochi March 02, 2020

Declining prices and the ensuing Ramadan demand seem to have prompted overseas buyers of cardamom. This is evident from the procurement of 25 per cent of the commodity by exporters, out of the 32 tonnes offered in the morning auctions at Bodinayakanur on Monday.

The recent price drop is an opportunity to explore the Gulf markets. With rates coming down, the price difference with the Guatemalan variety in the Gulf markets is now $5 per kg as against $10 earlier, traders said, adding that the downward price trend is expected to provide market stability and fetch more export revenue.
Cardamom exports from India up to December was only 500 tonnes because of high prices of the commodity as against 1,300 tonnes in the previous year, they said.

The surge in export demand can be linked to dropping prices and the upcoming festival season in GCC countries. Since the festival period this year falls in May, exporters would start procuring the commodity in March and April. Indian capsules are in great demand in Gulf countries because of its superior quality.

Few export, sub-suppliers and direct exporters have participated in today’s auctions, which indicates there is some renewed demand in the Gulf countries. Some shipments were sent last week, which will reach the Gulf coasts in mid-March. There is still not much stock available to fulfil the seasonal demand. As a few countries are facing Coronavirus threat, it may affect shipments, an exporter said.

Iran, one of the active markets for Indian cardamom, may not be active until the situation improves. Kuwait seems to be very active, especially after the Gulf Food Expo, preferring the Indian commodity to the Gautemalan, the exporter said, adding that there is a likely shortage of crop from Guatemala because of drought.
Arrivals in the auctions have shown sizeable improvement at 79.5 tonnes and the average price realisation was ₹2,985.

V Sajeev Kumar
The Hindu Business Line

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PEPPER MARKET UPDATE 2ND MARCH 2020 – WEEK 10

Vietnam pepper price has increased by 10% in the past two weeks. The price of material from the VND 36,500 has increased to VND 40,000 today. Despite being in the harvest season, raw material prices continue to rise steadily due to the following main reasons;

- At these level, many farmers are at a loss, almost all consider storing pepper. Farmers and domestic agent prefer to sell other agricultural products like Coffee to cover temporary costs and store as much pepper as possible. As their perspective, pepper is the most attractive to invest compared to other agricultural products.

- Pepper price is at low level, it has stimulated many exporters/agents to buy stocks. Especially, there are large enterprises with FDI capital actively participating and pushing the market up sharply in the past week. Pepper harvesting fully swing in all area in Vietnam however it is not easy to buy large quantities from last week.

- Although cross-border transactions with China are still very difficult and costly, there have been some Chinese businessmen buying and stockpiling in Vietnam. They feeling pepper price was good and waiting for better clearance opportunities. It’s stimulated the market to increased until now.

- Several exporters are big short and have to buying raw material in secret for the ordered in the first quarter 2020.

China The situation of Corona Virus has been better controlled and real demand is gradually returning to the border. However, customs clearance is still slow due to many procedures and costs.

India In local market, Malabar black pepper was traded with a 2% deficit as compared to the previous week, averaging at USD 4,372 per Mt.

Indonesia black and white pepper were reported with a 2% deficit respectively when compared to the previous week.

Malaysian black and white pepper were also traded domestically with a 2% and 1% deficit respectively as opposed to the previous week.

Sri Lanka black pepper was reported steady at an average of USD 2,929 per Mt.

Brazil  Continue to offer competitive prices but not much quantity. The Brazilian currency, which has depreciated against the US dollar by more than 10% since january, has also kept Brazil pepper prices at low level. However, we would not be surprised if the Brazilian market continues to increase follow Vietnam.

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#CARDAMOM - India - Cardamom exporters looking to tap Gulf markets

February 26, 2020

The subdued demand for Indian cardamom in the just concluded Gulf Food Expo has not deterred exporters from trying to tap the burgeoning Gulf markets. They are pinning hopes on the ensuing Ramadan festival season in April, which they expect to perk up demand.

However, the higher price of Indian cardamom over the Guatemalan varieties is causing concern among exporters. Though the price of export grade Indian cardamom has started receding from $58-$60 to $50-52 per kg, the Guatemalan crop is available in the range of $38-42, said Dhanavanthan Murugesan, Mercariex Worldwide, a cardamom exporting firm based in Bodinayakanur.

He pointed out that the export price in the last 10 days has remained stable and importers are waiting for a further decline in domestic price. The Indian commodity can take advantage of the anticipated shortfall of Guatemalan cardamom in the September 2020 harvest.

Indian cardamom is the most preferred variety in the Gulf markets and the active overseas markets are Dubai, Kuwait, Iran, Iraq, Jordan, Bahrain, Turkey, Canada and some European countries. However, the higher prices due to lower domestic production have given a competitive advantage to the Guatemalan crop. Many Gulf importers prefer Indian cardamom because of its quality, Murugesan said.

Saudi Arabia is a major buyer of Indian cardamom, but restrictions over pesticide residues have impacted export to that country in the last two years.

S.B.Prabhakar, a leading planter in Kerala’s Idukki district, said the Guatemalan crop shortfall is around 40 per cent this season due to drought. Moreover, the prices have doubled there and it will remain firm to bullish in the short term.

According to traders, only 10 per cent of the total production is exported now as against 15-20 per cent a few years ago. In value terms, cardamom exports have halved to ?500 crore this year from ?1,000 crore last year.

However, traders expressed the hope that the control on pesticides residues in several plantations would help achieve a good crop in the coming season. Farmers are now adopting better agricultural practices.


Ajith BK, Secretary, Association of Planters of Kerala, said large growers have already taken precautions on the usage of pesticides. Prices in the domestic market have been showing a declining trend for the last two months.

V Sajeev Kumar  Kochi | Published on February 26, 2020

https://www.thehindubusinessline.com/

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