Guatemala origin Cardamom Update: - February 25

Season is nearing its end, with over 85% of the crop harvested. Expectations are that the crop will be 50% less vs last season, worse than expected.
We also believe next crop starting in October will be short again as the damage from the long summer period in 2023 will continue to affect production. 

In terms of demand, with the price increase some destination markets are quiet and profit taking is going on.
We are entering the Ramadan season and significan sales at destination are expected, which will reduce inventories at destination and will generate additional demand from origin after Ramadan. 

Gulfood in this sense was ok, decent sales were done but sentiment was not aggressive. 

Indian cardamom exporters bet big on Gulfood 2024 to gain Ramadan business

February 20, 2024 at 05:53 PM. | Kochi

Current $5 difference with Guatemala likely to attract more buyers

BY V SAJEEV KUMAR

The commencement of Gulfood 2024 in Dubai has revived Indian cardamom exporters’ hopes to gain a competitive edge vis-à-vis Guatemalan produce in the Gulf markets for the ensuing Ramadan fasting season, which begins from March.

Though shippers are anticipating stiff competition from Guatemala, the lower price for Indian cardamom in the current season has raised their hopes. It was because of higher prices, the Indian cardamom had lost its business last year and the current price difference of $5 per tonne with Guatemalan crop is expected to fetch good sales this time, exporters said adding that the domestic price is ruling in the range between ₹1,450-1,500 per kg.

However, the worsening Red Sea crisis is creating a hurdle for exporters in sending the cargo to all the Gulf countries other than Dubai leading to transit delays for almost two weeks and higher cost due to diversion of ships. The emerging situation has resulted in delays in realising funds from abroad, thereby affecting the cash flow in the domestic market as well, a cardamom exporter in Vandanmedu in Idukki said.

Buyers face dilemma

M Dhanavandan, the Bodinayakanur based cardamom exporter who is in Dubai for Gulfood 2024, told businessline that many buyers found Indian prices to be favourable this time, generating interest in purchasing the crop from this region.

However, buyers faced a dilemma for making their purchases. With new crop arrivals and existing stocks of Guatemalan bought at lower prices during times when Indian crop prices were higher, decision-making became more complex. The approaching Ramadan sales also added another layer of complexity to the equation, he said.

The unpredictability of Indian cardamom prices further compounded buyers’ concerns. The question of whether prices would increase in the near future or remain stable at current levels, and whether it was prudent to book cargo now or wait for potential price drops during the onset of new arrivals, loomed large, he added.

Unstable domestic market

According to PC Punnoose, General Manager, KCPMC Ltd, the domestic market is unstable because of a lower demand and subdued export buying since January. The early Ramadan this time has facilitated buyers in the Gulf nations to cover their requirements and the market is expecting a positive trend only when the export buying starts.

Likewise, the upcountry markets in many North Indian cities are slow and the farmers’ strike in Haryana has further worsened the situation, leading to a disruption in truck movement.

Cardamom production is at the fag end of the season and the next crop is expected to start by June depending on the arrival of south-west monsoon, he said.

Indian cardamom exporters bet big on Gulfood 2024 to gain Ramadan business  - The Hindu BusinessLine

Scanty rainfall hits cardamom production, prices set to spiral to record levels

 

As prices of cardamom rise, India is in danger of losing its export markets to the cheaper Guatemalan cardamom. Even the upcoming festive season may not help its cause as higher prices may impact the price-sensitive domestic market as well.

AUGUST 16, 2023

Cardamom prices are spiraling to record levels as severely deficient rainfall wreaks havoc in Idukki district in Kerala, where most of the country’s cardamom is grown.

The average prices have doubled to around Rs 2,000 per kg from a couple of months ago. The maximum price for the premium quality has jumped to about Rs 3,000 per kg. It is reminiscent of the situation four years ago when average prices crossed Rs 4,000 per kg and the maximum price escalated to Rs 7,000 per kg when the south-west monsoon rains played truant.

Rainfall is said to be short by 30 to 50 percent so far in different parts of Idukki district, the hub of cardamom cultivation. ``The harvest began towards the end of last month and the production looks to be 30 to 40 percent short because of poor rainfall from June. If it rains towards the end of this month or in September, we may get some good crop by December, but the current damage cannot be set right,’’ said K K Saseendra Babu, MD of Vandanmedu Green Gold Cardamom Producer Co. Ltd.

He reckons that the total cardamom production in the country could drop to around 15,000 tonnes from 25,000 tonnes last year. Lower carryover stock has also contributed to the price rally.

At present consumption is weak and given the current prices it remains to be seen whether it will pick up with the onset of festival season after September. The maximum domestic sale usually happens during the Durga pooja-Diwali season. Subdued demand may limit the rise of cardamom prices till the festival season begins.

`The pattern of consumption has changed after the Covid pandemic. The market has become price sensitive, and the demand is for cheaper, lower quality cardamom. The total annual domestic consumption could have fallen to 25,000 tonnes from around 35,000 tonnes,’’ Babu said.

Though the prices are at remunerative levels for the growers, they cannot take advantage of it as most of them are left with hardly any stock. Since the prices hit record levels in 2019, cardamom cultivation has spread to more areas in Idukki district as well as in Tamil Nadu. The curry masala makers, who go for bulk quantities, bought some quantity when it was cheaper.

In the last three years cardamom prices have been averaging around Rs 1,000 per kg. Given the rise in the production cost, the growers can reap benefits only if the prices go above Rs 1,200 per kg.

``Apart from the decline in consumption there is also the risk of Guatemalan cardamom entering the Indian market towards the end of the year, which could impact domestic prices’’ pointed out P C Punnoose, CEO of Kerala Cardamom Processing & Marketing Co. Ltd. Gautemala is the biggest cardamom producer in the world and last year the country’s production was higher at around 45,000 tonnes, which helped it to dominate the export market.

Guatemalan harvest usually begins around October.

India’s export of cardamom too declined last year owing to the onslaught of Guatemalan cardamom. Cardamom exports in 2022-23 showed a 30 percent slump in quantity to 7,352 tonnes and a 36 percent drop in earnings year-on-year to Rs 875 crore. In 2021-22, cardamom export had reached a new peak of 10,572 tonnes valued at Rs 1,375 crore.

Importers in Kuwait and Saudi Arabia are asking why India has suddenly increased the price. The prices are around $ 31 per kg. Even at $19 per kg earlier, we were not finding too many takers in the world market,’’ said Nithyanandan, partner of SPG Ramaswamy Nadar and Sons, a leading exporter.

Once Guatemala enters the world market after October, it will be able to sell at a cheaper rate than India. Thus, India could end up losing the Gulf market, the largest buyers of cardamom, to Guatemala.

Further, failure of monsoon rains could push cardamom prices to a higher level, hitting both domestic consumption and export.

PK KRISHNAKUMAR is a journalist based in Kochi.

https://www.moneycontrol.com/news/economy/agriculture/scanty-rainfall-hits-cardamom-production-prices-set-to-spiral-to-record-levels-11197301.html

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

CARDAMOM - Guatemala in line to export around 55,000 MT for the 22-23 Season

 

Please read the short report/comment we received of an operator ofCardamom in Guatemala

Hello friends, looking forward to seeing you again next week, wanted to share this message to give you clarity to take better decisions. Look for us in stand Z6-24.

As of today Guatemala has exported 26,000 MT and by month end we’ll reach 30,500 MT… this is 9,000 MT more than last season (43% more). This figure is an all-time record, not surprising given that we have reached record monthly numbers in Nov, Dec, Jan, Feb. February alone is likely to double its average volume.

We believe next three months will be records as well and by April exports will be reaching above 43,000MT with 5 months to continue exports and product still in the fields. So we will reach 55,000 MT. 

Most of the 43k is already in the hands of exporters and although we have already passed the peak of the production cycle, there is and will continue to be cardamom in the fields over the next months. 

A 55k record crop is 20% higher than last year’s previous record crop, not small by any means. We see with a bit of concern the recent price increases and the messages being circulated, as we reach last crop’s price levels and while minimal volumes from this season have arrived at destination. 

We are very happy for our clients who bought during the first half of the season at lower levels and are looking now at good profits. However, we should tread with caution at these levels.    

As for what is pushing Indian prices higher…

CARDAMOM GUATEMALA - UNUSUAL BAD WEATHER PUSHES PRICES UP

 

During November, ETA & IOTA Hurricanes hit Central America (Nicaragua, Honduras, Guatemala and el Salvador).  In Guatemala, the biggest impact was in the North Region, including Alta Verapaz, Izabal, Quiche and Huehuetenango, states, which are the most important regions of Cardamom in Guatemala.

 

These hurricanes caused floods, landslides, road damages, infrastructure damages in the rural and urban areas, Cardamom, Coffee, Corn, Beans and other crops plantations suffered serious damages; cardamom prices behavior for the rest of the season are difficult to determine. The first estimations done in August 2020 at the beginning of 2020-2021 Crop, had shown around 10%-20% more production in comparison with 2019-2020 crop. However, based on the preliminary reports after ETA & IOTA hurricanes, the total volume of 2020-2021 crop could be the same as 2019-2020 crop.

 

During the upcoming weeks it will be possible to have more data, because up to today there are still roads damaged without access due to landslides, there are still areas under water, and some rivers until now have started to return to their normal levels.  

 

We are on the peak of the harvest season, which is about to end, however, prices have remain firm at high levels.

IPC SPECIAL ISSUE ON GUATELAMA CARDAMOM - JULY, 2020

Guatemala Cardamom Report

In Guatemala, cardamom is known as Green Gold of Guatemala as they are the world's largest exporter and producer of cardamom in the world. Since 2008 to 2019, Guatemala produced cardamom on average of 32,000 Mt annually. Furthermore, Cardamom is the fourth largest agricultural product to be exported out of Guatemala by value. The national producers of cardamom in Guatemala are distributed to several departments (regions) as follow: Alta Verapaz Department (68%), Quiché Department (14%), Huehuetenango Department (8%), Izabal Department (4%), Baja Verapaz Department (2%) and the other departments of the Republic add up to (4%) (Chart 1). Furthermore, a total of 84% of the harvested area is concentrated in 2 Departments: Alta Verapaz Department (68%) and Quiché Department (16%).

Harvesting and processing

Cardamom plants normally start bearing two years after planting. In most of the areas in Guatemala, the seedtime for cardamom performs during the rain and summer season which occurred in May-September. The high peak period of harvest also occurred during the rain and summer season around July-October (Table 1).

Postharvest treatments for cardamom in Guatemala consist of washing, curing (drying), cleaning, polishing, sorting, grading and packing. There are several ways of drying the fruit (capsules recently harvested) to reduce moisture content which include sun-drying, solar drying and wood - fired drying.

Furthermore, cardamom in Guatemala must be harvested by hand, when ready, it can be easily detached from the stem and the colour is bright green. The following definitions refer to common Guatemalan cardamom grades:

·  Jumbo Green - extra-large green small cardamom pods

·  Imperial Best Green - large green pods

·  Fancy Green Extra - extra green pods

·  Fancy Green - medium sized green pods

·  Imperial Mixed Green - large pale green pods

·  Mixed Green - pods of assorted colours

·  Mixed Green Split - medium sized open green pods

·  Yellow Mixed - medium/large closed yellow pods

·  Mixed Yellow Quality (MYQ) -medium sized light brown cardamom for grinding

·  Seeds - cardamom with the husks removed

The output of cardamom is greatly influenced by climatic conditions. The cardamom plant requires a continuous rain interspersed with periods of good sunshine. Over the past two decades, the cardamom cultivation areas in Guatemala had faced severe ecological degradation due to diminishing forest cover which was caused by the weather disturbance of El Niño and La Niña climate phenomenon. The phenomenon had adversely affected Guatemala's 2010 production, causing the quality of cardamom to deteriorate. The plant is now abnormally susceptible from attacks by pests and diseases.

Area Plantation of Cardamom in Guatemala

Cultivation of cardamom was introduced to Guatemala before World War I by Oscar Majus Kloeffer; today Guatemala is the world's biggest producer and exporter, followed by India and Sri Lanka. Over 60% of the world's cardamom is grown in Guatemala, the crops contributes to between 0.8% and 1.5% of country's GDP.

During 2008-2015 the area under cardamom cultivation in Guatemala had shown an increasing trend, recording an increase of 19% when comparing 2008 and 2015. As from 2015, the area of cardamom cultivation in Guatemala had decreased to 2017. In 2017, Guatemala planted Cardamom on 72,593 Ha of area, recording a 2% decrease when compared to 2015. In 2018, the area under cardamom cultivation was reported with an increase of 4% as opposed to 2017 to an area of 75,399 Ha. In addition, the area of cardamom cultivation for 2019 was estimated to increase by 2% to 76,761 Ha. (Table 2). The increase of the area under cardamom cultivation could be contributed to the Guatemala government's along with the Cardamom Exporters' Association (ADECAR), the Guatemalan association of Exporters (AGEXPORT) and the Cardamom Producers Association of Guatemala (CARDEGUA) implementation strategies to improve the quality of cardamom and the economic condition of the farmers involved in the production. These strate gies were implemented through demonstration plots as well as training on how to implement good agricultural practises (GAP).

Cardamom production of Guatemala had fluctuated since 2008 with a rather positive trend. Cardamom production of Guatemala was reported to have recorded an increase of 78% in the past 11 years as it recorded to have produced a total of 38,163 Mt in 2018. The highest production of Guatemalan Cardamom in the past 11 years was reported in 2014 with 38,465 Mt whilst the lowest occurred in 2008 with only 21,414 Mt.

In addition, the production of Guatemalan Cardamom for 2019 was estimated to experience an 8% increase when compared to 2018 at 41,172 Mt as result of implementation strategies by Guatemala government to improve the quality of cardamom and the economic condition of the farmers involved in the production in the Department of Alta Verapaz which was the main cardamom producer in Guatemala.

Cardamom Productivity in Guatemala

Cardamom productivity in Guatemala for the past 11 years fluctuated with a positive trend (Chart 2). In the past 11 years cardamom productivity in Guatemala was reported to have increased by 47% to 506 Kg per Ha in 2018 and by 2019 the cardamom productivity was estimated at 536 Kg per Ha. Thus, recording an increase of 6% when compared with 2018. The highest cardamom productivity in Guatemala was reported in 2013 with 553 Kg per Ha whilst the lowest occurred in 2008 with only 344 Kg per Ha.

Average Export Price of Cardamom in Guatemala

During 2017-2019, the average export price both whole and ground cardamom on Guatemala saw an increasing trend. In 2017, the average exports price of cardamom by Guatemala was reported at USD 10,350 per Mt for whole cardamom and USD 9,709 per Mt for ground cardamom. The highest average exports price of whole cardamom from Guatemala in 2017 occurred in May with USD 11,271 per Mt whilst the lowest price was reported in January with USD 9,202 per Mt. Furthermore, the highest average exports price of ground cardamom from Guatemala in 2017 was reported in June with USD 18,537 per Mt whilst the lowest price was reported in February with only USD 2,947 per Mt.

In 2018, the average exports price both whole and ground cardamom by Guatemala saw an increasing trend averaging at USD 11,784 per Mt for whole cardamom and USD 12,559 per Mt for ground cardamom. Thus, recording an increase of 14% and 29% respectively as compared with 2017. The highest average exports price of whole cardamom from Guatemala in 2018 occurred in December with USD 12,587 per Mt whilst the lowest price was reported in January with USD 10,163 per Mt. Furthermore, the highest average exports price of ground cardamom from Guatemala in 2018 occurred in April with USD 15,071 per Mt whilst the lowest price was reported in June with USD 9,668 per Mt.

The average exports price both whole and ground cardamom by Guatemala in 2019 continued the increasing trend with an increase of 47% and 15% respectively as compared to the previous year averaging at USD 17,370 per Mt for whole cardamom and USD 14,481 per Mt for ground cardamom. The highest average exports price of whole cardamom from Guatemala in 2019 occurred in December with USD 23,060 per Mt whilst the lowest price was reported in January with USD 13,595 per Mt (Table 3). Furthermore, the highest average exports price of ground cardamom from Guatemala in 2019 occurred in May with USD 27,159 per Mt whilst the lowest price was reported in December with only USD 1,437 per Mt (Table 4).

Export of Cardamom by Guatemala

As the top producers of cardamom in the world, Guatemala in the past 3 years actively exported cardamom to various countries with the major destination to Middle East countries. In 2017, Guatemala was reported to have exported a total of 35,814 Mt of cardamom from which 99.7% or 35,695 Mt of it comprised of whole cardamom and 0.3% or 119 Mt of it ground cardamom. Guatemala on average exported a total of 2,985 Mt per month in 2017 which peaked in December with 5,038 Mt. The total revenue of Guatemala's export of cardamom in 2017 was reported to be as high as USD 366.9 Million.

Year 2018 saw an increasing trend in term of quantity of cardamom exported by Guatemala. Guatemala was reported to have exported a total of 36,815 Mt of which 99.7% or 36,702 Mt of it comprised of whole cardamom and 0.3% or 113 Mt of it ground cardamom, recording an increase of 3% when compared with 2017. The average export of cardamom by Guatemala in 2018 was reported at 3,068 Mt per month which peaked in November with 5,220 Mt. In accordance with the increase of quantity, Guatemala's revenue from cardamom export was reported to have increased by 18% as compared to the previous year to a total of USD 433.7 Million.

2019 was reported with a decreasing trend in term of quantity of cardamom exported by Guatemala. Guatemala was reported to have exported a total of 36,323 Mt of which 99.7% or 36,209 Mt of it comprised of whole cardamom and 0.3% or 114 Mt of it ground cardamom, recording a slight decrease of 1% when compared with 2019. The average export of cardamom by Guatemala in 2019 was reported at 3,027 Mt per month which peaked in December with 5,816 Mt. Although decreasing in terms of quantity, Guatemala's revenue from cardamom export was reported to have increased by 49% as compared to the previous year to a total of USD 647.2 Million.

Cardamom from Guatemala are widely traded in Asia, Africa, Europe and America Countries (Table 7). In 2019, Guatemala's top 10 Country of destinations for its cardamom were reported to be Saudi Arabia with 10,107 Mt (an increase of 6% as compared with 2018), United Arab Emirates with 7,981 Mt (an increase of 10%), Bangladesh with 2,851 Mt (a decrease of 19%), Pakistan with 2,308 Mt (a decrease of 15%), Egypt with 1,386 Mt (a decrease of 0.3%), Jordan with 1,245 Mt (an increase of 1%), Netherlands with 1,127 Mt (an increase of 28%), Singapore 1,025 Mt (a decrease of 6%), Syrian Arab Republic with 958 Mt (a decrease of 29%) and Kuwait with 885 Mt (a decrease of 11%).

Source:

·  Ministerio de Agricultura Ganaderia y Alimentacion Guatemala (Ministry of Agriculture, Livestock and Food Guatemala) - MAGA

·  International Trade Centre (ITC) - Geneva

·  Food and Agricultural Organization (FAO)

·  US Food and Drug Administration (USFDA)


Note: Some of the data in this publication are from the IPC database. The data are obtained from official reports and correspondence between the IPC and relevant partiesand have been processed based on statistical norms that can be accounted for.

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