Consumption of cardamom generally rises during the festival season. This year, too, there’s good news for this aromatic spice. Fresh arrivals of cardamom at auction centres have eased prices, which were moving up since the past two months due to shortage of supply.

Auction prices of cardamom slipped last week to Rs 560-580 per kg from the Rs 750 levels in the month of August. With the onset of the October-November peak harvest season, the average arrival of fresh crop at auctions last week moved up to over 40 tonnes from 15-20 tonnes a month ago, bringing down its prices.

Erratic monsoons this year had delayed harvest, leading to a shortage in supply, triggering an upward move­ment in prices during the past few months. Plantations in Kerala did not get the much-needed showers during June, while heavy rainfall during the second half of August destroyed new offshoots in some areas. Apart from the monsoon, scarcity of labour is also affecting proper maintenance of plantations, The area under cardamom cul­tivation has been static for the past few years.

Gautemala in central America, the other leading producer of cardamom, has also been witnessing a shortfall in produ­ction. As a result, there is a rise in demand for Indian cardamom in the international market.

Though this year’s production is estimated to be at least 15 per cent lower than 11,000 tonnes harvested in 2008-09 due to erratic monsoons, exports of cardamom have surpassed last year’s levels.

According to the Spices Board, during April-August this year, India exported 320 tonnes valued Rs 21.55 crore against 195 tonnes valued at Rs 12.33 crore in the corresponding period last year. Total shipment during 2008-09 was 750 tonnes worth Rs 47.25 crore. However, considering the anticipated shortfall in production this year, the board has set a subdued export target of 650 tonnes this year.

“Since there is a reported decline in the production from Guatemala, the present export trend is likely to continue,” said B Srikumar, deputy director, Trade Information Services of Spices Board.

According to Anand James, senior analyst with Geojit Comtrade, Indian cardamom has been fetching better price in the international market year-over-year. In the last week of August 2008, Indian cardamom was priced $16.72 a kg, while during the same week this year, it fetched $18.03 per kg.

Domestic auction prices have also been on the rise. From Rs 500.89 per kg in 2007-08, they rose to Rs 537.61 per kg in 2008-09. The average price during the current season was above Rs 650 a kg.

Futures prices, too, have been moving in tandem. In the first week of September, cardamom futures shot up to Rs 835.50 a kg, clocking an open interest in 251 lots. As spot prices eased in the last week of September, futures prices of the October contract slipped to Rs 714 per kg. However, fresh buying at the MCX lifted the prices to Rs 733 a kg in the beginning of this month.

Cardamom prices are expected to remain steady around the Rs 750 levels in the coming weeks, said James. “However, investor participation and volumes traded have not been satisfactory despite the fact that cardamom has been one of the earliest of spices to be traded at the commodity exchange,” he added.