MCX Cardamom Jumps For Second Day On Short Covering

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MCX cardamom gained for second day on short covering at lower levels. The benchmark April cardamom ended the day at Rs 984.20, up Rs 22.20 or 2.31% from last close. The auction markets were closed last two day on all India strike organized by trade unions.

The Cardamom futures plunged Rs 152 or 14% from January high to the low of Rs 947 per 1 kg as on 20th February 2013, triggered by heavy selling on higher arrivals and weak demand. Besides, availability of stocks from last year crop, the reports of gutka ban by the Odisha government trigged selling at higher side. India’s crop is projected lower over last year and short fall in the local arrivals is expected in mid December -January period. Local crop is likely to drop by 20-25% from the last year’s crop due to bad weather in the major belts. Cardamom is expected to bounce back in medium term, when arrivals slumps in auctions and on pick up in export orders. Guatemala’s crop with carryover stocks estimated at around 34 thousand tonnes and some infestation will affect mainly the quality of the Guatemala cardamom this season. Guatemala produced a record of 10,000 tons of cardamom in the month of October 2012. Never before in the history of cardamom, had Guatemala produced so much cardamom in one month. This is 40 % of the total production of Guatemala three years back. Guatemala cardamom harvesting runs through October till June next year.

MCX cardamom were in downtrend with prices falling below Rs 1,000 mark, the counter touched the low of Rs 947 per 1 kg as on 20th February 2013. The counter bounced back from the low and extended the gains for two days with prices jumping Rs 47 per quintal to the high Rs 989 per 1 kg. The benchmark April cardamom ended the day at Rs 984.20, up Rs 22.20 or 2.31% from last close and the open interest dipped 469 tonnes to 3,732 tonnes, indicating short covering.

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