Prices of cardamom are likely to remain under pressure for short term because of good harvesting figures and weather conditions. The crop is harvested from September to the middle of January. On an average, arrivals at auctions centres are hovering in the range of 30-60 tonnes per day. The highest arrival of 69 tonnes was reported on October 3, 2010.

“Harvesting is likely to remain in full swing till October. However, demand during Diwali may limit the decline in price. We are holding a bearish outlook till December. Though arrival pressure in the domestic market will ease by October and November, arrivals from Guatemala, the largest cardamom producer, will start hitting the market by that time,” said Ashok Mittal, vice-president and country head at Karvy Comtrade.

The total arrival in the country during the current season, from August 1 to October 1, stood at 1,796 tonnes. The recent storm and floods in Guatemala are creating worries about the output. “Cardamom production in Guatemala is expected to be around 20,000 tonnes as compared to the previous average production of around 23,000 tonnes. The country’s cardamom production is expected to be around 10,000 tonnes this year,” said Basant Vaid, senior research analyst at Bonanza Commodity.

During the June quarter, the total exports declined by 63 per cent. This fundamentally bearish feature continued to keep the lid on buying momentum during the next quarter. Cardamom (small) exports during the April-August period were lower by 33 per cent at 200 tonnes as compared to 300 tonnes in the same period last year. Cardamom (large) exports witnessed a dip of 82 per cent at 90 tonnes during the period compared with 500 tonnes during the year-ago period.

Due to lesser exports demand, prices dipped around 41 per cent in the spot market since July 22, 2010. Subhranil Dey, research analyst for commodity at SMC Global Securities, said, “Other than profit booking, the decline is due to lesser demand for exports from the Arabian countries due to stronger rupee. A stronger rupee compels exporters to reduce profit margins in order to maintain their competitiveness in the world export market.”

The cardamom market is currently in the consolidation mode and is trading in the tight range of Rs1,102 to Rs 1,020 from the last one month. So technically, “either side breakout will confirm the trend for short to medium term. We expect an immediate resistance at Rs 1,152 per kg and thereafter at Rs 1,180 per kg. However, on the flip side, the support levels could be seen at Rs 988 per kg and thereafter at Rs 962 per kg,” said Mittal.

However, Bonanza’s Vaid said, “Cardamom prices are expected to trade weak in coming weeks. If prices slip below Rs 1,000 per kg, a further weakness towards Rs 920 and then till Rs 825 could be seen.”