INDIA -EXPORTS LEND AROMA TO CARDAMOM

Published on July 14, 2020

Rising trend in exports has turned out to be a saviour for cardamom, amid a waning Covid-hit domestic market.

The revival of exports to Saudi Arabia from May, after resolving the pesticide residue issues, has enabled the sector to maintain a sales momentum, after cardamom prices touched rock-bottom with an average of ₹1,069/kg when the lockdown was eased.

The rising trend in exports reflected in the auction prices which went up by ₹600, touching an average of ₹1,615 a kg, said auctioneers.

According to exporters, around 100 tonnes of cardamom valued at ₹25 crore have been shipped since May to Saudi — the single largest consumer of Indian cardamom. India shipped around 4,500 tonnes of the spice in the last three years.

However, some exporters, on condition of anonymity, told BusinessLine that shipments to Saudi have slowed down after June, following the revised Maximum Residue Limits (MRL) after prescribing an additional parameter (Dithiocarbamates) analysis (apart from the existing five parameters) for samples in cardamom shipments.

The Commerce Ministry has convened a meeting of India-Saudi Arabia Joint Working Group Meeting on July 15 to consider and share issues/challenges faced by exporters with respect to non-tariff barriers (NTB’s) from the Kingdom so that these issues can be taken up by the department during the inter-government meeting, they said.

ALSO READ  Cardamom's aroma to fade away as prices may fall 25%

Prices, production

SB Prabhakar, a planter of Pambadampara Estate in Idukki, said that there was a slow-moving cyclone by June-end in Guatemala resulting in a huge amount of rain in Coban — the main growing area in Northern Guatemala. Since the entire country is under lockdown, there could be a slowdown in exports from there. This would benefit India in the case of softening of prices.

The general perception is that there would be a better production in the ensuing harvest season by July end, said PC Punnoose of Kerala Cardamom Processing & Marketing Company.
The contributing factors for a better crop are good vegetative growth, favourable climate, the absence of a prolonged summer, intermittent summer showers and above all, the extraordinary price factor that made farmers to upkeep the plantations.

Domestic market hit

However, the fluid situation of Covid has made the things worse, impacting the domestic consumption in major consuming centres of Gujarat, Maharashtra, Delhi and Chennai, leading to a negative consumer sentiment.

Sadasivasubramaniam, Kerala Cardamom Growers Association, voiced concern over the drop in monsoon rains in Idukki region by about 40-50 per cent in June and July, which would likely affect the next crop settings.

He also highlighted some other risk factors on the production side such as labour shortage due to the closure of the border with Theni, Tamil Nadu that impacted the labour movement affecting the timely operations in plantations.

On the next crop position, Prabhakar added that much will depend on the revival of monsoon and the quantity of rains received till August-end.


Published on July 14, 2020
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V.Sajeev Kumar, Kochi, | For The HinduBusinessLine.com
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Cardamom's aroma to fade away as prices may fall 25%

Thursday, Jul 9

NEW DELHI/MUMBAI – Cardamom has been a favourite of traders up until now as it has been fetching higher prices ever since the heavy rainfall and flood in Kerala two years ago. But now with likely higher production and the COVID-19 pandemic hitting demand, cardamom growers are starting to get worried as prices are expected to fall by 25-30%.

The floods in August 2018 swept away a large chunk of cardamom plantations in Kerala, driving average prices up to a record high of 4,733 rupees per kg at the spot auctions that year. A year later, prices skyrocketed to a high of 7,000 rupees. Since then, prices have remained in a range of 1,500-3,800 rupees, against the normal range of 900-1,100 rupees.

Currently, the average price of small cardamom at the auctions is 1,500-1,600 rupees per kg.

"A higher estimated production for 2020-21 (Jul-Jun) and tepid demand due to the virulent pandemic is likely to lead to a fall in prices to around 1,000 rupees during the peak picking season," said Nishanth Varghese, manager-operations at Kochi-based Kancor Ingredients Ltd.

Traders see cardamom production in the next season at 22,000-23,000 tn, against 16,000 tn in 2019-20. However, the Spices Board of India has pegged the country's 2019-20 output at a much lower 11,230 tn.

"Major consuming centres like Delhi, Kanpur, Mumbai and Tamil Nadu are badly affected by COVID-19 so consumer demand is less. The overall consumption has also fallen because of low spending capacity, not everyone can afford it nor is it an essential item," said P.C. Punnose, chief executive officer of The Cardamom Planters Marketing Cooperative Society.

During the lockdown period, 70-75% of traders lost considerable amount of money. They had stocked up in anticipation of a further rise in prices but the pandemic has unfortunately prolonged, said Punnose.

On the trade front, buyers are in a wait-and-watch mode before making bulk purchases, fearing lower returns.

"...market players do not want to invest because the level of uncertainty following the COVID-19 outbreak is very high... prices are expected to be around 1,200 rupees in coming months," said Hemen Ruparel of Mumbai-based exporter Samex India Pvt Ltd.

Though the overall outlook for the commodity is seen bearish, likely fall in supply during the peak season and any adverse weather in the coming months would stabilise the prices, traders said.

Even though the crop condition looks good so far, fear of excess and continuous rains over the coming months may have a negative impact on the crop which is near its picking period, and this may lead to downgrade of qualitative and quantitative estimates, said Varghese.

Currently, the first round of picking has started in Kerala and new crop of cardamom is arriving in small quantities at auctions. The quantity will increase in August and the second round of picking will start in September.

"Rains have just started two days ago. It's late by over a month. Cardamom needs rain... it's the main important factor. Dams, rivers are not getting filled. We genuinely have to wait till August to be sure. Crop is expected to be good but again if heavy rains occur, there will be damage," said Anjo T. Jose, executive director of Mas Enterprises.

After markets reopened and auctions resumed, stockists started offloading old stocks and are holding only 15-20% of carryover stocks from the previous season.

Although traders have made space for the new season's crop, they will also look for opportunities to make the most of a good turn in prices, if that happens.

"If prices fall more and there is some unexpected weather adversity, then we will hold stocks and wait for prices to rise," said Joseph Kattakkayam, a grower based in south India.

Being a labour-intensive crop, movement of migrant labourers to their hometowns has become another cause of headache for planters. Labourers from Tamil Nadu might also not come due to inter-state travel restrictions. This may lead to restricted arrivals during Aug-Sep, the peak harvest season, traders said.

On the flip side, this could be good news for consumers, especially for lower income households, as the aromatic spice may finally become affordable this festival season. 

By Preeti Bhagat and Kavita Desai
Edited by Maheswaran Parameswaran
http://www.cogencis.com

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SPICES MARKET UPDATE 6TH JULY 2020 – WEEK 28

PEPPER

Viet Nam

Pepper export in June reached 25.000 tons, valued at 56 million USD, down 17.6% in volume and 8% in value compared with May, 2020. It also decreased by 18.5% in volume and by 25.5% in value compared to June 2019.

The average export price of pepper in June reached 2,240 USD/ton, up 11.6% compared to May, but down 8.6% compared to June 2019.

From January to June 2020, pepper export reached 172.000 tons, value 365 million USD, down 2.9% in volume and 19% in value over the same period in 2019.

In the first 6 months of 2020, the average export price reached 2,127 USD/ton, down 16.6%  compared with the same period in last year 2019.

Market slow since last week with very little demand from overseas customers. Almost kept watching. China/USA/EU customers are very quiet and we have not seen any activities through border trade last week. However, the market is still in uptrend with increased price 50$/ton in week 27. Vietnam exporters/processors covering third quarter shipment in silent.  

Some demand for long time shipment (fourth quarter and 2021 shipment) but we heard all exporters withdraw.

Brazil

The stock very tight and not available for prompt shipment. Price up to firm daily when exporters prefer to cover short and just can offer a few boxes September onwards shipment.

Indonesia

We heard white pepper crop less over 50%. Exporters just offering a few boxes at higher Vietnam price to test market situation.

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IPC PEPPER MKT REPORT No. 27/20, 29 June - 3 July 2020

LOCAL MARKET
Market this week showed mixed response. In local market, Malabar black pepper was reported with 2% deficit as compared to the previous week at an average of USD 4,084 per Mt. Indonesia black and white pepper were reported with an increase of 2% and 3% respectively as opposed to the previous week averaging at USD 2,289 per Mt for black pepper and USD 3,260 per Mt for white pepper, despite the weakening of Indonesian Rupiah against US Dollar. Malaysia black and white peppers in local market were reported stable at an average of USD 1,906 per Mt for black pepper and USD 3,269 per Mt for white pepper. Furthermore, Viet Nam black pepper was reported with an increase of 1% as opposed to the previous week averaging at USD 2,072 per Mt whilst Viet Nam white pepper was reported stable and unchanged. Sri Lanka black pepper was reported with 2% deficit when compared to the previous week and was traded at an average of USD 2,600 per Mt. Whilst, China white pepper traded at an average of USD 4,22 5 per Mt locally.

INTERNATIONAL  MARKET
 International market showed a similar trend as the local market. India black pepper was reported with the same 2% deficit as compared to the previous week at an average of USD 4,349 per Mt. Indonesia black and white pepper were reported with an increase of 2% and 3% respectively as compared to the previous week averaging at USD 2,777 per Mt for black pepper and USD 3,860 per Mt for white pepper. Malaysia black and white peppers were reported stable and unchanged. Furthermore, Viet Nam black pepper 500 g/l and 550 g/l were reported with 1% deficit respectively when compared to the previous week averaging at USD 2,380 per Mt and USD 2,461 per Mt respectively. In contrast, Viet Nam white pepper was reported with an increase of 4% as opposed to the previous week averaging at USD 3,900 per Mt. China traded its white pepper at an average of USD 4,425 per Mt internationally. 

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PEPPER INDIA - IMPORT FEARS GRIP KOCHI´S PEPPER MKT

Kochi  July 03, 2020

Pepper prices declined by R2 per kg, with an average price realisation of R314 per kg, in Kochi on Tuesday 
Fear of pepper imports seem to have gripped the spot market in Kochi with the prices registering a R1/kg drop on Friday.

According to Kishore Shamji of Kishor Spices, there was pressure on local dealers to sell as there were more sellers in the market with imported pepper. The emerging situation has also forced Karnataka planters to liquidate their stock on the fear of imports even at MIP of R500 per kg, he said.

He pointed out that such a situation arose inspite of the government imposing minimum import price restrictions and the Customs Department being given powers in the last Budget to look into the price factor even for imports from bilateral countries.

The farming community fears that their existence will be at stake if such imports continue, he said. They requested the Prime Minister, Finance and Commerce Ministers to look into the matter seriously for the various representations submitted in this regard.

IPSTA Cochin Black pepper rate (R/kg): MG1: 326, ungarbled: 306; 500 G/L: 296 at an off-take of 26 tonnes.


Published on July 03, 2020


V Sajeev Kumar for
www.thehindubusinessline.com/markets/commodities

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VIETNAM MARKET UPDATE 1ST JULY 2020 – WEEK 27

JULY 1st ,  2020

Viet Nam;

The pepper market uptrend again with 45$ increase in the first day of July after falling in the past week. Despite the negative information and lower oversea demand compared to the previous months. However, in June, Vietnamese also exported roughly 24,000 tons, bringing the total pepper exported in the first 6 months of 2020 to reach 171,115 tons (6 months of 2019; 180,276 tons). With the commitment was done, we will not be surprised if the export volume in July, 2020 to reach 18-20,000 tons at least, bringing the total export volume in the first 7 months of 2020 to approximately 190,000 tons. An impressive figure when total production of 2020 pepper crop is assessed to decrease by 15-20% compared to the 2019 crop.

Some other information for reference;

- Export in the last 6 months of 2017 (July to December); 89,529 tons

- Export in the last 6 months of 2018 (July to December);  103,737 tons

- Export in the last 6 months of 2019 (July to December); 106,727 tons

- Let's wait and see how many tons will be exported in the last 6 months of 2020

Although China's demand is currently low, they almost do not participate in pepper much over 5 weeks. However, the current price remains stable and it will be difficult to reduce in the near future due to stock coming too tight. Prices are still low and farmers are not willing to sell more when market correction. If the price is reduced, farmers immediately offer to drip and stop offering.

Brazil;

Currently, Brazil stock finished now and cannot offer immediate shipment. The second crop of Brazil will start in end August/early September, so it can only be offered during September onwards 2020 shipment. However, it is likely that Brazilian exporters have already sold about 15 - 20% of the new crop in advance and will prefer to cover from farmers first instead of continuing to offer further shipment.

Indonesia;

We heard heavy rains and strong wind continuously so maybe delays in harvesting until beginning August. Prices are not attractive to the farmer and the 2020 crop may reduce production. Crop 2020 expected to export is very small with about 17-20,000 tons so farmers/exporters will not hurry to offer.

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Moisture content drags down pepper prices in Kochi

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June 29, 2020
Pepper prices were down by ₹2 per kg in Kochi on Monday following the availability of higher moisture content pepper due to the present climatic conditions. The prices were at ₹310/kg on an off-take of 30 tonnes.
Kishore Shamji of Kishor Spices said that there are more sellers from Wayanad and Coorg for lower bulk density pepper, which, in turn, is influencing Idukki dealers as well to reduce the price. The domestic demand continues to be steady except from cities of Chennai, Mumbai, Delhi, Ahmedabad where the demand has slowed down.
According to him, the pressure from Sri Lankan exporters for dumping their produce in India overcoming the MIP restrictions fixed by the Government is still continuing. The absence of required action from authorities have forced more importers to go ahead with such shipments, violating the rules.
IPSTA Kochi black pepper rates (₹/kg): MG1-330; ungarbled-310; 500 G/L-300.

 


V Sajeev Kumar for
thehindubusinessline.com 

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