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Showing posts with label 2022 pink pepper crop. Show all posts
Showing posts with label 2022 pink pepper crop. Show all posts
Wednesday, August 17, 2022
Tuesday, June 14, 2022
Cardamom prices fall on weak demand, exports may receive a boost
Cardamom prices are down from around Rs 1,000 per kg to Rs 750 to 850 per kg. The market expects the rates to decline further with a new harvest season round the corner
PK KRISHNAKUMAR JUNE 14, 2022 / 06:33 PM IST
Robust production and tepid demand have caused prices of cardamom to decline, raising concern among growers. Small cardamom prices have fallen by over 20 percent in the last few weeks.
As cardamom growers fret over the plummeting prices, exporters reckon the low prices will boost India’s competitive edge in the global market and help them to match the record shipments of the last financial year.
Weak demand, both in the domestic market and overseas, has pushed down the cardamom prices from around Rs 1,000 per kg to Rs 750 to 850 per kg. The market expects the rates to decline further with a new harvest season round the corner.
Exports of the spice fetched all-time-high volumes and earnings in 2021-22, according to the latest figures of the Spices Board. The country exported 10,572 tonnes of cardamom worth Rs 1,375.70 crore in the year. The volumes were higher by 63 percent and value by 25 percent over the previous year.
UAE overtakes Saudi Arabia
The record exports were achieved despite Saudi Arabia imposing stringent rules on pesticide residues. Until a couple of years ago, Saudi Arabia used to be the biggest buyer of Indian cardamom. The United Arab Emirates (UAE) has now overtaken Saudi Arabia in cardamom purchases.
According to the available statistics for 2020-21, the UAE purchased 1,724 tonnes of Indian cardamom compared to 842 tonnes by Saudi Arabia.
“The exports have spread to many other countries. Besides other Gulf countries, Bangladesh has also emerged as a big buyer,’’ said Anjo Jose, executive director of Mas Enterprises, a major exporter.
Even going by the 2020-21 data, exports to countries like the US, Kuwait, Bangladesh, Canada, Singapore and Qatar have increased significantly over the previous year. This is expected to go up further in FY22 as shipments have risen sharply.
Competition from Guatemala
Although cardamom from Gautemala, the largest producer of the spice, is cheaper than the Indian variety, many buyers are going for the superior quality of the latter.
“Buyers have come to recognize the premium quality of Alleppey green bold cardamom. Indian cardamom at $14-15 per kg is around $3 higher than the Gautemalan variety,” said Hemen Ruparel, chief executive of Samex Agency, another exporter.
But presently there is a shortage of good quality export cardamom in the Indian market, which has led to the dominance of Guatemalan cardamom in global trade.
“Exporters are waiting to buy fresh stock in the new harvest season, which is expected to be in full swing by July-August,’’ Jose said.
Growers complain that climate vagaries are affecting the production quality of cardamom, grown mostly in Kerala and a few regions of Tamil Nadu and Karnataka.
“Pest menace has gone up. The chemicals we had used earlier are banned now and the new ones that are approved are not effective in controlling it. As a result, the quality of production is coming down,” said K S Mathew, a major grower.
Production in 2021-22 is estimated at over 25,000 tonnes compared to 22,520 tonnes in the previous year. The surplus production has come from new growers and non-traditional areas.
“While the big estates get hardly 300 kg an acre, the small ones are able to get almost double the quantity,” said M M Lambodharan, general secretary of the Spices Planters Association.
Weak demand from the North Indian markets and with exporters waiting for the new season, cardamom prices have become non-remunerative for the growers.
“The growers need Rs 1,200 per kg to break even considering the increasing cost of fertilizer and pesticides. Though the growing regions received copious rains in May, extreme heat this month is causing the plants to wilt. At this rate, the crop could be short by 40 percent in the next harvest," Lambodharan said.
Earlier during the year, when cardamom prices fell below Rs 800 per kg, the Spices Board implemented new steps restricting the total quantity per auction for a licensed auctioneer to 65 tonnes.
Of this, growers were allowed 70 percent of the share while the quota for licensed dealers was limited to 30 percent. This was to check the re-pooling of cardamom by dealers at auctions, which the growers said was leading to a price fall. But that was in force only for over a month and was relaxed when the prices rallied.
PK KRISHNAKUMAR is a journalist based in Kochi.
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