Cardamom prices soar on deficient monsoon, crop shortage

 

August 10, 2023 

After black pepper, it is now the turn of cardamom to witness a price surge reportedly on speculative buying. The rates soared to ₹2,250 per kg in the Puttady auction centre in Kerala without bringing any benefits to the farming community due to crop shortage.

After Covid-19, the cardamom market has been witnessing a reverse trend with prices plummeting to below ₹1,000, prompting farmers to neglect the crop because of rising production cost. It was in August 2019 that prices touched a record high of ₹7,000.

PC Punnoose, managing director of CPMCS Ltd. at Kumily, cited the delayed and deficient monsoon, especially in the growing belt of Kerala’s Idukki, as the reason for prices to move up. May and June are considered as the time for surplus rains, but hardly any showers during the period, instead a dry spell which led to heavy droppings in plantations and it impacted production.

Delayed plucking

Normally, it would take 90 days for the flowers to mature, but deficient rains in this season has hit plant settings and it resulted in delayed plucking. The first round of harvest was over by July-end and the next round will all depend on a conducive weather.

It looks like climate change and weather is going to dictate the direction of the market. With El Nino strengthening, we may not see rains from December of 2023 till April 2024 contributing to further reduction in crop and increase in prices”, said SB Prabhakar, a cardamom planter in Idukki.

The growing tracts have received a deficit of 70 per cent in June, 25 per cent in July and around 40 per cent till date in August. As the South-West monsoon is the main flowering months, the overall crop is expected to drop 25-30 per cent at a minimum in the current season.

Speculative buying on

If there is a deficit again in this period, it will lead to a further reduction in crop and an increase in prices up to ₹3000 level. If rains become bountiful later in August and September, he said, adding that prices should stabilise at around ₹2,000-2,300 levels.

However, trading sources said the market is witnessing speculative buying mainly from Kerala traders in anticipation of a further price hike. The offered quantities in auction centre are on an average 100 tonnes per day.

The consuming centres in the Gulf markets and upcountry are hardly having any stocks and they are all waiting for the raw material. But the crop shortage and rising prices is hitting them hard, especially with the festival season is around.

Cardamom prices soar on deficient monsoon, crop shortage - The Hindu BusinessLine

Black pepper has turned hot in the recent weeks on speculative buying

 

August 8, 2023

The Hindu BusinessLine

Black pepper has turned hot in the recent weeks on speculative buying amidst concerns of delayed crop setting due to the erratic rainfall pattern in the key producing regions of Karnataka and Kerala.

Prices which hovered around the ₹480-500 a kg levels for a long time have increased to ₹ 603 for the ungarbled and ₹623 for the garbled varieties in the Kochi terminal market. However, prices are still short of the record ₹700 per kg witnessed during 2016.

The surge in prices is not seen benefiting growers because of the limited availability as most of them have sold their produce, while some are holding back in anticipation of further increase.

Kishore Shamji, President of India Pepper and Spice Trade Association (IPSTA), said Indian pepper is out-priced in the world market because of the higher prices of $7,700 per tonne, whereas Sri Lankan crop is available at $6,700 and Vietnam at $3,700.

He alleged that a cartel, which is behind hiking the prices of turmeric and cumin, is pushing up pepper prices as well.

Above floor price

The farming community fears that the higher prices in the domestic market might pave the way for more imports from Sri Lanka. Domestic prices are currently ruling above minimum import price of ₹500 per kg. There are also concerns that pepper from Brazil and Vietnam may enter the Indian market via Sri Lanka by paying the 8 per cent duty in view of the surging domestic demand which is estimated at 85,000 tonnes, Shamji said.

“Due to the scarce availability, the pepper imports into the country are likely to rise. If the prices continue to move up, lot of pepper will flow into India from countries such as Vietnam, but the growers will not benefit,” said KK Vishwanath, Convenor of the Consortium of Pepper Growers’ Organisation.

Subdued demand

According to Shamji, the demand for black pepper across overseas markets was subdued especially in China, the US and the UK because of the slowdown. At the same time, the Indian economy is booming with a burgeoning demand especially from masala manufacturers . 

Referring to production, Shamji said the climate change will have an impact on pepper cultivation across producing countries including India which are reporting a lower crop in the current season. For instance, Brazil has brought down production figures this season.

Mahesh Shashidhar, Chairman, Karnataka Planters’ Association, said the erratic rainfall pattern during the pre-monsoon and early part of the monsoon has impacted the flowering of pepper and the crop setting is seen delayed by few weeks.

https://www.thehindubusinessline.com/economy/agri-business/pepper-turns-hot-on-speculative-buying-concerns-of-delayed-crop-setting/article67172836.ece

Jeera dropped on profit booking after prices gained as supply is limited

 2023-08-08

Jeera yesterday settled down by -0.45% at 63115 on profit booking after prices gained as supply is limited due to the rainy environment. However, the cumin market is currently facing slow export and domestic demand. Due to heavy rains impacting cumin quality, there have been disruptions in the cumin business across Gujarat, Rajasthan, and other regions. China’s cumin imports and exports have caused temporary corrections in cumin prices, with a recent $200 decrease in the international market. The possibility of China purchasing Indian cumin in October-November before the arrival of new cumin adds further uncertainty to the market dynamics. Cumin imports in May 2023 reached 210 metric tons, showing a substantial increase of 227.73% compared to the previous month's import volume of 64 metric tons.

According to FISS forecasts, cumin demand is predicted to exceed 85 lakh bags this year, with a likely supply of 65 lakh bags. Jeera exports during Apr-May 2023, rose by 67.90 per cent at 42,988.50 tonnes as compared to 25,603.35 tonnes exported during Apr-May 2022. In May 2023 around 25,903.63 tonnes of jeera was exported as against 17,084.87 tonnes in April 2023 showing a rise of 51.52%. In May 2023 around 25,903.63 tonnes of jeera was exported as against 14,894.62 tonnes in May 2022 showing a rise of 73.91%. In Unjha, a key spot market in Gujarat, jeera edged down by -139.4 Rupees to end at 62044.3 Rupees per 100 kg.

Technically market is under fresh selling as the market has witnessed a gain in open interest by 14.76% to settle at 4713 while prices are down -285 rupees, now Jeera is getting support at 62740 and below same could see a test of 62370 levels, and resistance is now likely to be seen at 63740, a move above could see prices testing 64370.

Kedia Advisory

Commodities News

2023-08-08 03:45

R&G Monthly Pepper Market Updates W31

Vietnam seen firmer today as market opened with raw material price at 72,5 VND/kg an uptrend by about 3,5% from opening week 30  level.
Small demand was mostly seen from Asian importers specifically from China and Pakistan buyers, while USA and EU are still on a look out for Q4/Q1-2024.
Covering from some shippers were also reported with few to no offers of raw materials from local suppliers which prompted shippers to also be inactive last week. 

Indonesia still stable with few demands, mostly for forward positions. Speculators were also seen buying.

Brazil facing difficulty in buying raw materials from the field amid harvest seasons.
Offers are very limited from shippers who are still trying to cover their earlier booked contracts while farmers are holding their offers prompting shippers to stop offering ending week 30.

Although good production is expected, harvest is slow and delayed due to coffee crop that is being prioritized.
Market is showing firmness, but we could expect it to cool down later on (also if forex rates cooperate) due to good crop size in this region and as well as Para region that is also on going. 

From this origin, specifically from Vitoria port where most cargoes are loaded, apparently having serious issue with lack of containers and limited vessel availability.
This is now causing dilemma with both coffee and pepper exporters. 

Another issue that is brewing is climate change that could cost a potent economic storm. 
Reports of extreme weather condition in southern Europe and North Africa this month suffering from sweltering heat while in some countries, thunderous storms leading to flooding in others. 
Further consequence to negatively impact the crop that may lead to further food inflation  worldwide

==========================

Vietnam pepper market update 31st July 2023 – Week 30

 

The price of pepper from India increased by 20% in the past week. The main reason is the sudden increase in demand from the domestic market. Besides, the Kerala region is the main pepper production area of India, the heavy rain has made the crop forecast to decrease by 30-32%.

Besides, the price of pepper in Brazil also increased by 10% in the past 2 weeks. Many information forecast that Brazil's crop will be reduced by 15-20% compared to the 2022 crop. This has caused farmers/dealers to increase hoarding and less offer to sell to the market.

This is why green cardamon is so expensive

 

Caviar, Champagne…cardamom? While it may not be the first thing that comes to mind when we think about culinary delicacies, the latter certainly carries its weight in the luxury category. Prices for green cardamom are known to rise up to $90 per kilo, ranking it No. 3 on the list of the most expensive spices in the world, following saffron and vanilla.

For those who are new to the spice, you can find its sweet, citrus-like flavor peeking through many Indian and Middle Eastern dishes both sweet and savory. It’s grown in tropical regions which include India and Costa Rica, and is a member of the ginger family. It’s available in both black and green varieties and can either be used in its pod form or as a ground powder derived from the seeds of the pod. Green cardamom — the focus of this article — is significantly more expensive than black cardamom and is also more difficult to find.

So why is green cardamom so expensive, exactly?

How Green Cardamom is Harvested and Grown

To understand why it can fetch such high prices in the market, we have to dig deeper into its inception from start to finish. As with many expensive ingredients, a lengthy and involved production process is behind green cardamom’s high price tag.

After farmers plant the cardamom seeds, they need to wait a grand total of three years before the crop is mature. After plants mature, the harvesting window lasts from July to February, which is relatively long. Despite the advantage of a long harvesting cycle, not all cardamon pods mature at exactly the same time, and only highly-skilled harvesters can determine which pods are ready to be picked at peak ripeness.

To reach this level of skill, harvesters must train for six months with farmers so they can discern which pods are ripe or raw. And even after all that work, only a total of approximately 10 pods can be harvested from each plant. To make matters more stressful, the stakes are quite high if mistakes are made. If the pods are collected too early, they won’t be aromatic and fetch a fair price in the market. If they are collected too late, they simply go to waste.

Weather conditions may also affect how much cardamom costs. If production is impacted negatively by rain or inclement weather, crops may be destroyed, which limits availability and drives up prices overall.

The Post-Harvest Process

Within 24 hours of harvesting, the perfectly ripe cardamom pods are ushered into a space where they must sit to dry for 18 hours. (And if they sit any longer than a day after being harvested, they risk decay.)

The drying process also impacts the green color of the pods, which is an important factor in determining their price in the marketplace. The machines that dry the pods use heat, and if the heat isn’t released perfectly it can negatively affect their color.

After drying comes sorting. A team of workers is tasked with the arduous job of sorting the smaller pods from the larger pods (which are more valuable) by hand. Ultimately, after it’s all said and done, only one-sixth of the pods harvested can be marketed as good-quality cardamom.

It’s because of all this extensive labor and attention to detail that some companies can charge a premium of $90 per kilogram of green cardamom.

The Economic Sustainability of Cardamom Production

While cardamom can sell for a lot in the marketplace, not all of that money is going directly into the pockets of its producers. Farming cardamom can be a costly endeavor, and up to 10% to 15% of the profits end up being re-invested in each acre on fertilizer alone. Add to that the losses due to weather, and producers may sometimes end up investing their own money out of pocket to keep production up.

Luckily, things are looking up for the industry, as it is projected to increase by $1,690,000 by 2025. The hope here is that farmers can keep up with demand and continue to supply the world with the spice.

By: Lauren Alexander
Posted at 6:30 AM, Jul 30, 2023 and last updated 1:58 PM, Jul 28, 2023

This story originally appeared on Simplemost. Check out Simplemost for additional stories.

https://www.simplemost.com/this-is-why-green-cardamon-is-so-expensive/

Dubai: Scammers con merchants out of tonnes of avocados, beef, onions

 

Victims — some of whom had to close their shops because of the losses — say the heists were executed with such meticulous planning and finesse that they didn’t see any red flags

by Mazhar Farooqui

Published: Wed 26 Jul 2023, 1:17 PM

Late last year, Johnny Smith closed applications for the 150 packaging helper positions he advertised for on LinkedIn.

The unsuspecting recruits hired for Max Star Trading LLC had served their purpose: Pack, weigh and load millions of dirhams worth of stolen goods into containers that have since disappeared, along with Smith and the entire staff of the Dubai-based company. That’s because Johnny Smith wasn’t a real person. Nor were Ahmed Ali, Javed Malik, Rana Khaleel and Yaswant. The names were just some of the many aliases used by the conmen.

Adopting a familiar modus operandi, the fraudsters contacted dozens of UAE and overseas firms, offering to buy everything from foodstuff and electronics to industrial equipment and construction material.

The initial orders were small and readily settled in cash. Once trust was gained, Max Star then made bulk purchases via post-dated cheques. All of them turned out to be duds.

When their cheques began to bounce, the traders rushed to Max Star's office in UBL Building on the Khalid Bin Waleed Road. It was too late. A visit to their warehouse also drew a blank. The goods had been either sold to third parties for cash or moved elsewhere.

Not a lone case

Max Star is not the only such company preying on unsuspecting traders. Two other dodgy firms, Seven Emirates Spices and Ultimate General Trading, have also shut shop after pulling a similar scam — the former as recently as last month.

Only this time, the loot haul is bigger: Avocados worth half a million dirhams from Colombia, Ethiopia and Tanzania; cherries worth nearly Dh92,000 from Turkey; onions worth Dh210,000 from India; coconut husks worth Dh62,000 from Indonesia; palm oil worth Dh78,000 from Malaysia… It’s a long list and it keeps getting longer as more victims come forward.

Many UAE-based companies have been left reeling by the scam. Among them are Sharjah’s Globus Overseas who were conned out of Pakistani beef shipments worth Dh45,000; Abu Dhabi’s New Al Katef Electronic (printers worth Dh15,000); and Dubai’s PBS International (flexi bags worth Dh150,000).

Some, like Dubai-based Al Bizra General Trading, have been conned twice in a matter of days. The company’s Sri Lankan owner Imran Marikar told Khaleej Times they lost 500 litres of palm oil and 1,500kg of tea worth nearly Dh62,000 to Ultimate General Trading, besides two metric tonnes of cardamom worth Dh108,000 to Max Star.

Shahina of Penpal Trading lost disposable bags worth Dh37,000 to Seven Emirates Spices. “I had barely started business,” she told Khaleej Times on Monday.

Victims recount anguish

Unable to bear losses, at least one company is winding up. “I see no other way,” said Kaleab Getaneh of Ethiopia’s Ethio Fresh Export that shipped 22 tonnes of Hass avocados.

“I thought we could support smallholder farmers, but now we have to close down,” Getaneh told Khaleej Times from Addis Ababa. He was sent screenshots of wire transfers as proof of payment. It was a sham. The transactions were never completed.

Another victim, Daissy Amarillo from Columbia, said: “I am not going to deny that these have been very difficult days behind our business… There are many peasants from our country and cheating is a very frustrating situation.”

Her company, ASI Representacuines LTDA, exported 7,200kg of avocados worth Dh227,000. Ashraf Issac of Omros Food in Dar es Salam, Tanzania, who also sent a shipment of avocados, pegged his losses at nearly Dh60,000. “I am aghast. I feel wrecked,” he said.

Dubai businesswoman Lata Sachdev of PBS International is no less distraught.

In 2018, the Indian expatriate donated a part of her liver to save her husband’s life. Since then, she has been running the house as well as the business. “The scam has hurt us badly. We lost Dh150,000,” said the 50-year-old. She has started legal proceedings against the runaway firm that operated from the Bushaquer buillding near the GGICO Metro Station in Al Garhoud.

Lata has also recounted her ordeal in a series of heartfelt LinkedIn posts, urging traders to stop accepting post-dated cheques to avoid being cheated.

Meticulous planning

Victims said the heists were executed with such meticulous planning and finesse that they didn’t see any red flags.

“Both Ultimate and Max Star were legitimate companies with valid trade licences, proper offices, staff and warehouses. How could we have possibly known that everything was a charade?” rued Marikar.

“Ultimate asked for 300 tins of palm oil and gave us a current-dated cheque for the full amount as soon as we delivered the goods to their Al Qusais warehouse. We were happy. The following day, they collected another 200 tins of palm oil and 300 tonnes of loose tea from our warehouse in Al Kabaisi and gave us two more cheques,” he recalled.

In the mistaken belief that all cheques were for the same day, Marikar dispatched the new orders. He also deposited the cheques, hoping the payments would soon be reflected in his bank account.

No money ever came. What came instead was an SMS notification from the bank that said the cheques had been returned due to insufficient funds.

“I immediately rang up Ultimate’s office,” said Marikar. “I was assured that I would be reimbursed in cash as the company’s owner Sachin Sharma had to rush to India to attend his brother’s funeral."

As it turns out, many local traders were sold the same story. Those abroad were tricked into shipping goods after being sent bogus wire transfer receipts.

Kaleab Getaneh said he was impressed when Ultimate paid him 50 per cent of the total invoice ($4,500) within days of receiving a shipment of avocados.

“They won our trust with the smaller invoice but betrayed it with the bigger ones,” said Getaneh, sharing a copy of purported wire transfer receipts.

The same ploy was used against Naresh Patel of Shiv Industries in Gujarat, who shipped 29 tonnes of onions.

All cellphone numbers associated with Max Star and Ultimate are switched off and none of their owners or staff can be traced. The websites of the companies have ceased to exist.

In a related development, four Vietnamese companies face the prospect of losing five containers of spices and cashew nuts worth $517,000 that they’d shipped to Dubai.

Vietnamese media, citing the Vietnam Pepper Association, said the containers were sent to a foodstuff company, but were claimed by unidentified parties at Jebel Ali Dubai Port without paying the Vietnamese companies.

Earlier, an exporter from Vietnam lost a container of pepper worth more than Dh400,000 to a fraudulent firm that operated from Business Bay.

The victim managed to register a criminal case through a law firm. An arrest warrant is now out against the key suspect who has a verified Instagram account with a tagline that reads, “I never dreamed about success. I worked for it.”

Lawyer Jihad El Haddad of Al Jazera Advocate said the man approached their client using a fake identity. “We found him out,” said El Haddad.

But traders hit by Ultimate, Seven Emirates Spices, and Max Star are still groping in the dark. “There has been no headway,” said Marikar.

El Haddad said scam victims often don’t know how to present a case before the prosecution. “If you do it the way we have, you could initiate criminal proceedings."

The Indian Consulate in Dubai has repeatedly urged exporters from India to exercise caution and not fall victim to such scams. Of late, there has been a spate of heists along similar lines. Last year, two other companies — Spicy Dine Public Kitchen and MEP Gulf Electromechanical Works — suddenly pulled down their shutters after buying anything they could get their hands using post-dated dud cheques.

Between them, they scooted away with an estimated Dh20 million worth of goods. Many of their victims have had their lives torn apart.

Mustafa Kusgoz from Turkey’s Kugoz Agriculture — which supplied 3,300kg of cherries to Ultimate — also faces an uncertain future. In a text message, he said: “They stole my bread. They broke my home. I am breaking up with my wife.”

https://www.khaleejtimes.com/life-and-living/dubai-scammers-con-merchants-out-of-millions-of-dirhams-of-foodstuff-electronics?_refresh=true