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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VIETNAM PEPPER MARKET UPDATE 27TH JULY 2020 – WEEK 31

 

 

Viet Nam
According to preliminary data of Vietnam Customs, pepper exports in June 2020 reached only 20,449 tons, less 9,902 tons, a sharp decrease of 32.62% compared to the previous month and down 10,236 tons, or 33.36% less than the same period last year 2019. The pepper export turnover in June reached $47.17 million, down $13.74 million, or 22.55% down from the May 2020 and down $28.04 million, or 37.28% compared to the same period last year.

Accumulated export volume of pepper in the first 6 months of 2020 reached 166,812 tons, down 10,046 tons, or 5.68% compared to the export volume in the first 6 months of 2019.

The average export price in June 2020 reached $2,306/ton, up 14.95% compared to the average export price of May 2020.

The same export, Vietnam imported a sharp decrease compared with 2019 when total quantity only 14,899 tons of pepper, including 11,283 tons of black pepper and 3,616 tons of white pepper. Compared to the same period in 2019, import volume decreased by 34.3%. Vietnam imports pepper mainly from Brazil, Indonesia and Cambodia. In which, the import from Brazil was 100% black pepper with 5,802 tons, down 34.9%; imports from Indonesia reached 5,528 tons (of which 2,057 tons were black pepper and 3,471 tons were white pepper), down 50.4% over the same period.

Until July 20th, 2020, Vietnam exported 9,942 tons of pepper and is forecast to export 16 - 17,000 tons in this month, bringing the total export volume in the first 7 months reached 183,812 tons (first 7 month 2019 exported 203.737 tons).

Pepper market in week 30^th 2020 has increased slightly by 2% compared to week 29. The main reason is that exporters focus on covering raw material to ensure time shipment has been done before.

In general, demand in week 30^th more than week 29^th when many different countries have gradually increased production again after a long time restrained due to Covid 19 (especially EU/India). Demand is still quite slow but many requests from the EU/US for long shipment orders from Q4/2020 until the end of 2021.

The market is still quite sensitive and the price trend is likely to be quite stable in the near future.

 Brazil
Almost the same previous week when only possible to offer very limited quantities but not for prompt shipment. Delivery time is mostly in September/October as a seller option. We can foresee Vietnam exporters will not be hedging raw material from Brazil from now.

 Indonesia
Currently harvesting but less offered. Prices are still higher than Vietnam both black and white pepper especially muntok white pepper.

IPC PEPPER MKT REPORT No. 30/20, 20 - 24 July 2020

MARKET REPORT
Market this week showed mixed response with Indonesia and Viet Nam origin recording a decrease.
In local market, Malabar black pepper was reported with an increase of 2% as compared to the previous week at an average of USD 4,088 per Mt.
Entering the harvest season as well as the slow demand, Indonesia black and white pepper were reported with 12% and 5% deficit respectively as opposed to the previous week averaging at USD 2,039 per Mt for black pepper and USD 3,262 per Mt for white pepper.
Malaysia black and white peppers in local market were reported with an increase of 4% and 2% respectively when compared to the previous week at an average of USD 2,275 per Mt for black pepper and USD 3,626 per Mt for white pepper.
Furthermore, Viet Nam black pepper was reported with 1% deficit when compared to the previous week averaging at USD 2,040 per Mt whilst Viet Nam white pepper remained stable and unchanged.
Sri Lanka black pepper was reported with an increase of 4% as compared to the prev ious week and was traded at an average of USD 2,644 per Mt.
China white pepper was reported stable and unchanged. 

INTERNATIONAL MARKET
International market showed a similar trend as the local market. India black pepper was reported with the same increase of 2% as compared to the previous week at an average of USD 4,355 per Mt.
Indonesia black and white pepper were reported with 12% and 5% deficit respectively as compared to the previous week averaging at USD 2,488 per Mt for black pepper and USD 3,858 per Mt for white pepper. Malaysia black and white peppers were reported stable and unchanged.
Furthermore, Viet Nam black pepper 500 g/l, 550 g/l and Viet Nam white pepper as well as China white pepper continued to be reported stable and unchanged.

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New cardamom crop arrivals hit Kerala spot mkt; may gain pace in Aug

Wednesday, Jul 15
By S. Anirudh Iyer

NEW DELHI – Cardamom crop from the 2020-21 (Jul-Jun) season has started arriving at the auction centres in Idukki district, a major grower of the spice in Kerala, said traders.
"The crop has started hitting the markets on time without any delay, but the quantity of the crop entering the market is low as compared to arrivals during the peak months of Aug-Sep," said Jojan Malayil, a Kerala-based trader.

At present, 50 tn of the new crop is entering markets for the daily spot auctions. The arrivals are expected to more than double in the peak season starting August. The moisture content in the new crop is at the standard level of 8%, traders said.

Traders see cardamom output in 2020-21 at 22,000-23,000 tn, against 16,000 tn in 2019-20. The Spices Board of India has pegged the country's 2019-20 output at a much lower 11,230 tn.
"A higher estimated production 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.

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

Though the overall outlook for the commodity is seen bearish, there is a likelihood that unfavourable weather conditions such as higher-than-expected rainfall may impact supply during the peak season, which will help provide a floor to prices, traders said.  


Edited by Ashish Shirke

© Cogencis Information Services Ltd. 2020. All rights reserved.

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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