Kerala farmers back to cardamom cultivation as the price hits a record high

Published: 26th August 2019 



Kerala’s reputation as the land of spices goes back at least 3,000 years. Here, Express delves into the aromatic world of spices with a special focus on Kerala.
By Express News Service

Cardamom, called the queen of spices, proved worthy of its title when it fetched a record price in the market this year and brought good tidings to Kerala farmers who are otherwise affected by the vagaries of the weather.

With the price hitting Rs 6,000/kg, cardamom growing areas saw people buying acres of farms and those who had turned to other crops returning to cultivate the green gold. Kerala’s reputation as the land of spices goes back at least 3,000 years. Here, Express delves into the aromatic world of spices with a special focus on Kerala.

SPICE GARDEN OF INDIA

Kerala is known as the spice garden of  India. It is the largest producer of small cardamom. It is also famous for black pepper, clove, ginger, cinnamon and Malabar tamarind
Though farmers with small holdings do cultivate spices, most of the produce comes from large plantations
Traders from ancient Phoenicia made tours to Kerala to carry back spices to Mediterranean lands. Pepper, cardamom, cinnamon, ginger, cloves and more -- the spices were used to add flavour to food and wine and preserve meat during winters
Apart from traditionally grown spices, Kerala farmers have taken to growing spices such as vanilla, oregano, rosemary, thyme, basil, mint, bay leaf and sage.

YIELD: WHY THE DROP 

In the case of pepper, ginger, turmeric, nutmeg and cardamom, there has been a decrease in productivity in the state due to adverse weather conditions like long dry spells and short periods of intense rainfall
    For cardamom, tropical, hot and humid climates are suitable. Ideal humidity level is 75%. For the past few years, Kerala has been receiving only 40% of its share of summer rainfall.
A deficit of 60% seriously affected the yield
    The long dry spell, at a time when spiking and pollination need to happen, followed by heavy rain led to a drop in yield of both pepper and nutmeg. Flooding spelt doom for nutmeg plantations in major production centres like Ernakulam
In the case of ginger, the huge disparity in market price and the cost of production saw many farmers ditching the crop. Ginger farmers from Kerala have shifted to Karnataka’s Western Ghats districts and Malenadu region. Ginger crop is disease-prone.


PRICE: WHY THE RISE

The sudden spurt in cardamom prices has been due to the fall in production, says Dr Muthuswamy Murugan, professor and HoD, Cardamom Research Station at Pampadumpara in Idukki. “Due to adverse weather conditions, the production has fallen by 25% to 35%.”
Production of green cardamom has fallen from 25,000 tonnes to 10,000 to 12,000 tonnes in the past few years.
The average price of cardamom reached Rs 4,000 this season and it presently commands a price of Rs 2,900 to Rs 3,000 per kg.
In the case of nutmeg and pepper, the price is holding steady though there is competition from imports.

EXPORTS: REASONS TO WORRY

India has a 45% share in the global market for spices, but concerns over adulteration and excess pesticide use are posing a threat
Several countries have already raised complaints  – want India to ensure quality or lose business.
According to Dr Muthuswamy Murugan, the export of spices, especially cardamom, will not see a surge in the future due to the huge amount of pesticides being used by farmers.
According to Jojo George, MD, KCPMC Agrisolutions, the low exports have not hit spice traders. “The domestic market is robust and the huge demand in the country for small cardamom has kept the trade on an upward swing.”


Indian spices have been able to record huge gains in volume and value. Spice exports have recorded substantial growth in the past five years. During 2017-18, a total of 10,28,060 tonnes of spices and spice products valued at Rs 17,929.55 crore were exported from the country as against 9,47,790 tonnes valued at around Rs 17,600 crore during 2016-17 _ thus registering an 8% increase in volume.

Export figures of major spices in 2017-18

    16,840 tonnes Pepper
    5,680 tonnes Cardamom(small)
    22,605 tonnes Ginger
    1,07,300 tonnes Turmeric
    5,500 tonnesNutmeg and mace

http://www.newindianexpress.com/states/kerala/2019/aug/26/kerala-farmers-back-to-cardamom-cultivation-as-the-price-hits-a-record-high-2024295.html


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India Spices: Wednesday, Aug 14

By Preeti Bhagat

NEW DELHI – Futures contracts of all spices on domestic exchanges, barring mentha oil and jeera, ended lower today.

Coriander futures on National Commodity and Derivatives Exchange hit a 10-week low of 5,810 rupees per 100 kg because of imports from Ukraine, Russia and Bulgaria, said Kamal Vijayvargia, a Kota-based dealer.
"Weather is very favourable right now for next season's sowing, which is a negative factor for prices… Imports have also risen a lot and are coming into India at $650 per tn," he said.

Contracts of jeera ended higher as investors covered their short positions after prices hit an over four-month low of 16,810 rupees per 100 kg in early trade today.
The rise in prices today was also because arrivals in Gujarat's Unjha market fell by 4,000 bags (1 bag = 55 kg) to 6,000 bags, said Mahesh Yadav, a local dealer.

Turmeric futures ended in the red because of profit booking after prices hit a three-week high of 7,198 rupees a 100 kg on Tuesday.

Futures contracts of mentha oil on Multi Commodity Exchange hit a two-month high of 1,324 rupees per kg due to strong demand from domestic stockists and pharmaceutical companies, said Rajiv Gupta, a Sambhal-based spice oil trader.

Cardamom futures hit the 4% maximum lower circuit today as heavy rainfall in Kerala is likely to help plantations with better fruit formation and growth, traders said.

Heavy-to-very heavy rainfall is likely over Kerala during the next 48 hours due to a cyclonic circulation over northwest Arabian Sea, India Meteorological Department said. It also issued a 'red alert' for the state today.

On Indian Commodity Exchange, the August pepper contract traded lower following reports that the Sri Lankan government is likely to hold talks with India for relaxing the minimum import price of the spice.
Currently, Sri Lankan exports up to 2,500 tn of pepper to India at zero duty under the Indo-Sri Lankan Free Trade Agreement. Exports over and above this quantity are subject to 8% duty under the South Asia Free Trade Agreement.


This copy was first published on the Cogencis WorkStation
© Cogencis Information Services Ltd. 2019. All rights reserved.



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Cardamom price on a record high

IDUKKI , August 05, 2019 00:17 IST

Delayed harvest leads to poor supply

Cardamom price continues to break records because of the crop’s poor availability in the market. A drop in production is predicted in the days ahead too of the current season.

Market sources said that the first crop of the season had not reached the auction centres and adverse climate had impacted the production. Usually the first crop reaches auction centres by June/July. However, because of poor southwest monsoon, the first crop is expected only by the end of August or in September this time.

The maximum price recorded at the Spices Park at Puttady on Saturday was ₹7,000 a kg while the average price was ₹4,733. It was a record in the maximum and average prices in both the auctions, held in the morning and eventing, at Spices Park.

 In the evening auction held by Header Systems (India) Ltd., Nedumkandam, on Saturday, 26,142 kg reached the auction centre, all of which was sold. The maximum and average prices respectively were ₹7,000 and ₹4,655 per kg.

In the morning auction held by Mas Enterprise, Vandanmedu, of the 8,796 kg of cardamom that had arrived, 8,741 kg was sold at ₹5,212 (maximum) and ₹4,733 per kg (average). The maximum price had remained above ₹4,000 per kg from July 24.
Flood impact

The Cardamom Hill Reserve (CHR) area received very poor rainfall and the atmospheric temperature remains high, affecting the flowering and the growth of beans. In addition, the flood of 2018 had taken a toll with plants largely destroyed in the CHR. Market sources said the high fluctuation in prices may not benefit the farmers and it is likely to drop with the arrival of the first crop.
Giji K. Raman


https://www.thehindu.com/news/national/kerala/cardamom-price-on-a-record-high/article28816195.ece
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Prices of cardamom -India

Prices of cardamom, Queen of Spices, soar as wild weather wipes Indian production

Sudarshan Varadhan

NEW DELHI (Reuters) - Every year, tens of millions of Hindus flock to the Venkateswara Temple in the southern Indian state of Andhra Pradesh to pay tribute to site’s patron deity and pick up some of its famous sweets, the legendary “Tirupati laddu”.
The traditional delicacy is baked with sugar, flour, ghee, nuts and raisins and studded with cardamom, which has surged in price this year as India’s erratic weather ravages production of the pod, known as “the Queen of Spices”.

That spike has created new cost and supply pressures for buyers of the spice, like the temple, which offers a limited number of complimentary laddus to visitors and charges for extras.

“We are already incurring a loss making laddus, and this makes it worse,” a senior temple official told Reuters.

The temple typically buys 120 tonnes a year of high quality small cardamom pods, the most sought after kind, to meet demand. A year ago, it paid 1,600 rupees ($23.31) per kg for the spice, the official said. This month, it paid 4,400 rupees per kg.
The production problems stem from erratic weather in the south Indian district of Idukki, which accounts for at least a sixth of the global production and about three-quarters of India’s small cardamom output.

Last year, massive rains killed over 50 people and destroyed the district’s farmlands. This year, a weak monsoon season has wiped small cardamom production, threatening the livelihoods of thousands of producers.

That has hit both supply and quality, but more crucially, sent the spot prices of small cardamom, already among the world’s priciest spices, to record highs on Mumbai’s Multi Commodity Exchange this month.

That spike is good news for traders but depleted stocks mean farmers are unable to capitalize on the rally, while the surge in costs has also hurt downstream demand.

Temples and state governments are among India’s largest buyers of cardamom, accounting for up to 35% of the market, said Jojo George, Managing Director of KCPMC.
“Somebody who was buying three tonnes or so earlier is now buying only one ton,” George said.

‘MAD CHEF’

Cardamom’s complex combination of flavors, including elements of mint, citrus and herbs, make it a popular ingredient in a wide range of dishes, both sweet and savory.

Koushik S., popularly known as the “Mad Chef”, said the spice is essential to Indian cooking and supply issues affect his work.

“Next year, availability will be a problem and we might have to import from Guatemala, but then the quality is inferior,” said Koushik, who is a well-known Indian TV chef and is also a consultant to restaurant chains.

Guatemala is the largest cardamom grower but supply to India from the Central American country is mixed with lower quality cardamom, according to research by the Netherlands Enterprise Agency.

Over the past three months, N Seetharam Prasad, the chef at the four-star GRT hotel in Chennai, has complained five times about the low quality of his small cardamom supplies.

He uses the spice to make everything from biryani, a fragrant rice dish that enjoys a cult status in the country, to tea and sweets.

“I will never compromise on the quality of ingredients and will look to buy elsewhere if I don’t get good cardamom,” Prasad told Reuters.

Idukki, a small land-locked mountainous region located near the southern tip of India, has historically been ideal for cardamom, which demands heavy rains to thrive.

 P.C. Matthew, a farmer who lives in India’s cardamom capital of Vandanmedu in Idukki, expects production to fall 50% from a normal year due to lower rainfall, and for the harvest to be delayed to October from early August.
While overall rainfall at local and national levels has not varied significantly over time, analysis shows the incidence of short spells of intense rain and lengthy periods of little or no rain has increased.

India, in its annual economic survey last year, attributed this to climate change, and said revenue in areas entirely dependent on rains could fall by close to a sixth.

The increasingly erratic weather patterns lift risks for the $400 billion farm economy and its hundreds of millions of farmers, only a small fraction of whom have crop insurance
Since the start of the century, Idukki’s cardamom regions have had seven lengthy dry spells, defined as periods of 100 days or more of no rain, said Muthusamy Murugan, the officer in charge of the state-run Cardamom Research Station in the district.

That compares with 15 such spells for the entire 20th century. He expects the region’s cardamom production to fall 40%.

“Prices will continue to rise in the long-term and we have reached this point because of climate change,” said Joychan Kannamunda, secretary of the Cardamom Growers Association.
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https://www.reuters.com/article/us-india-water-cardamom/prices-of-cardamom-queen-of-spices-soar-as-wild-weather-wipes-indian-production-idUSKCN1UC087

Reference: Today, 1 USD = 68.7891 INR


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REPORT ABOUT PRESENT BLACK PEPPER MARKET & TRENDS

IN THE LAST DAYS RE GOT TO KNOW SOME REPORTS ABOUT BLACK PEPPER MARKET.

INTERESTING READING FOR THE ONES OPERATING IN THIS TRADE.

Vietnam – Although fresh demand from the world market is missing, prices are holding steady to firm.
A record quantity has been exported: March (37,000 tons), April (36,000 tons) and May
(37,000 tons) bringing a total volume to approximately 143,000 tons till May 2019;
36% more exports than 2018 in similar period.

We have not observed such stunning export figures in our 26 years of trading history. Knowing 8 more months to new crop,
farmers and dealers are now in a comfortable position to hold remaining quantities without panic. This is very much evident from arrival of goods and gradual rise in raw pepper prices.  

Their comfort level will increase more once 60-70% of crop is out of Vietnam.
In May, raw prices remained between 44000 to 46000 dong/kg.
China keep supporting the pepper market and their pepper imports have risen to 70% from 2018 followed by USA and India to 27% and 10% respectively.

Buyers keep pushing for lower prices. We have not seen very aggressive offers for future shipments as all of them feel more risk than reward.
Destination markets need to consume extra volume imported during last 3 months.
Not to forget that combined Middle East and Asia has become one of the largest pepper
consumer market in recent years and their constant support to origin keep prices steady.

Limited numbers of orders in hand with exporters do indicate that coverage for second half is yet to come.
Low pepper prices and higher maintenance cost are pushing few farmers to cut trees and plant some other commodities.
Farmers in Chu Puh and Chu Sê districts—two key pepper growing areas who had invested for a dozen of pillars that covered one hectare are now selling the same number of pillars in lower cost as many of them have gone bankrupt.
Add to pot, young trees are also dying due to poor care of farmers, poor maintenance of current
vines and virtually no new plantation, crop size will reduce gradually while world consumption in general increases by 3-4% annually.
Expect volatile days in 2020 and beyond.
Imports to India via Nepal may halt due to 100% additional duty (from 10-20%) has been imposed recently in their annual budget presented in end May.

Indonesia – No bad news so far. Expecting similar or slightly better crop than 2018. However, no selling pressure or any aggressive pricing from numbered top-class shippers.

Brazil – It is interesting to note that for the first time, Brazil is not discounting to Vietnam prices. In fact, quotes from Brazil are now in line with Vietnam. This firmness is attributed to strong currency and depleted inventories.
Brazil too have exported large volume in the last 5 months (approx. 40,000 tons).
Their new crop from Para region to start in August – September.
We have not seen any selling pressure yet. First class shippers prefer to stay away from sharp bids.
If Vietnam continues to be firm, world demand may shift to Brazil which may help Brazil to stabilize further.
In general, there is resistance at low prices.
Demand from Europe has slowed down due to the new import regulation on salmonella and at the same time volume from Vietnam has increased considerably for European ports.

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