SMALL GREEN CARDAMOM UPDATE JULY 2021

AFTER a high steep rally up to USD 55-56 per kg, small green cardamom has come down to USD 22-24 per kg [price for the No. 1 quality premium variety]. And those grades which moving among normal market and common people, dipped from USD 35 to USD 11 a kg !! Is this normal for small green cardamom ?

Let us start with an over view of Indian cardamom auction price 6 days in July 2021. Please refer the above Table, which gives you the auction price highest value and average value and also quantity registered for and sold in the auction. This auction price does not speak whether the price is for graded or non graded; and if graded, then for which grade etc. Those who know it how this to be understood, they know very well. Above table shows price in Indian Rupees INR per kg. Some months back, these figures were in Rs. 4000++ or Rs.5000 ++ . And now see reached upto Rs.1003. So take your call yourself what is the trend of Indian green cardamom.

Last week and this week - 5-6 mm size is trading at INR 800-825 levels; and if against ready cash it is available at INR 775 as well. And 6-7 mm being traded INR 930-950 levels. Unsorted bulk variety [direct from farmers] maximum traded was INR 1080. These levels equals USD 11 to 22 per kg for the lowest grade to the highest premium grade of 8 mm bold. The highest premium grade 8 mm bold, for the premium brand in India is available at INR 1600-1640 per kg - this is for the premium brand. Not regular and standard.

Internationally speaking - global market came down from USD 55 a kg to USD 23-24 in Dubai market. Dubai is the major trading hub of cardamom industry. This is because, at any point of time, the largest consuming segment for cardamom is the Arab World. And for the arab world, Dubai is the main feeding centre because of logistics and banking reasons. Guatemala also look at Dubai market for selling its entire stock. And Dubai market is the bench mark for Guatemala as well.

July is the beginning of new harvest and auction season in India. Cardamom marketing is monitored through auction system in India. Farmers, traders, planters all are required to bring their stock to the auction centre and register for auction, which would be sold through auction. July 2021 auction of cardamom started, and at the beginning I have given auction details for one week in July. The price movement of cardamom which we have seen during last two years is not normal. The rally to USD 55-56 was not normal. It was the result of a calculated speculative efforts coupled with small shortage in the supply chain - caused by Saudi Arabia banning Indian cardamom for reasons of chemical residues located in the cardamom. When Saudi Arabia banned Indian cardamom - all other arab countries looked at Indian cardamom with a half-closed eye - and India was kept out of global market - which caused shortage in the supply chain. That was the igniting reason for such a rapid rally in cardamom. It was not normal. And later, after one or one and half year, when Saudi Arabia lifted the ban, and India started export, the rallied price came down almost in the same speed to present level !

Even in the beginning of festival season of July - demand for cardamom is very sluggish. Domestic demand as well as export demand is very poor. In Dubai also, not much demand, and market price moving down daily. It is almost a buyer's market - what price buyer demand, he gets it. Over all scenario of cardamom market is sluggish and down side.

What is the crop size for new season ? Do we have any genuine and authenticated production figures ?

Unfortunately, we all are trading in a world where no genuine and authenticated and scientifically proven method of estimating crop size [or production figures] of any agri commodity. Absolutely, there is no authenticated actual production figures for any agri commodity. Only "ESTIMATES" based on statistical computation - which is based on ""probabilities"" - and nothing actuals.

India started harvest. What is its crop size ? 15000-16000 Mt ? or 18000 Mt ? Is it 20,000 Mt or 22,000 Mt ? All these 4-5 figures are available from difference sources. Private sources and corporate research agencies estimate up to 25000 Mt also !! Based on the traditional methods of estimating crop size, which the farmers, planters, old people who are into cardamom cultivations for generations, and producers associations, planters association, etc. it is the basic estimate in 2021 that because of good climate, and reasonable rainfall received in the plantation area, and over all healthy atmosphere for cardamom growing - and seeing the flowering pattern, branch size, seeds on the branches etc. a common accepted estimate size is 18,000 to 20,000 is Indian production in 2021. However, there is no authentication for this figure as well. Govt system estimating crop size is yet to come out, but which is purely a statistical probability figure - nothing to claim genuine or actual. Highest Indian export in recent years is 5200 Mt. From a lower scale of 3450 Mt to 5200 Mt as the highest figure is the export contribution of India during the recent past years. Few years back, Indian export stood at around 9000 Mt or more. From that level it has come down to 5200 Mt . And now export demand is almost NIL, and if export market does not improve and more buying from overseas not happening, then again Indian export contribution might come down.

Cardamom producing countries are FOUR in total - but only two is well known to influence the global market - India and Guatemala. Other producing countries are Tanzania and Camaroon. But both these African countries are not international players; and they do not have any international claims. To talk about Tanzanian and Camaroon cardamom market - needs a separate page itself. So that I keep for another time. Absolutely they are no where in deciding either price or size of cardamom global market.

GUATEMALA - Eventhough Guatemala started cardamom production with the help of India, taking seedlings from India - but now, they out phased India in the case of production. India being the traditional producer of cardamom for many decades - till now India did not cross 20,000 Mt production figure - inspite of its large cultivable area and size of its plantations. Where as Guatemala in 10 years time crossed 25000 Mt annual production, and now average figure is at 30,000 Mt. And for this coming new season - which is expected in September 2021 - what figures they anticipate ? ""Undoubtedly above 30,000 Mt"" - is the reply from Guatemala. They are very confident to have crop size above 30,000 Mt. There are people estimating Guatemala size at 35,000 to 40,000 Mt . But major exporters comment that, from their past experience, it is too early to comment on production figure, because, it is possible, even just two weeks prior to harvest, if a bad weather happens, a cyclone happens, or heavy rain fall comes in - it can spoil cardamom. However, all are confident to have above 30,000 and some even to blindly believing it would be 35000++ because of the good climate and weather situations they had.

Considering the over all scenario after talking to farmers and traders in India, and exporters in Guatemala, it is felt that global production of cardamom in 2021 could be in the range of 53000 to 55000 Mt . If it cross 55000 mt - nothing to wonder also.

So what could be expected in cardamom market in coming months. If the present situation continues as such, without much climatic changes, and UNLESS major demand from either export market comes up or domestic demand in India - there is no scope to expect higher prices. Market can only continue sluggish and bearish in the present context. A reverse can be considered only if there is heavy rush from markets for buying, or any drastic weather changes and climatic conditions affecting the crop. We need to wait and see these developments.

Happy reading and comfortable trading !

For any personalised advice or views, please write to me at whatsapp +971508150595 or email me at [email protected] / [email protected]