Cardamom on MCX settled up 0.27% at 891.9 on restricted supplies from producing regions. Further, expectation of delayed harvest in the producing belts also added support to cardamom prices’ uptrend. Arrivals are likely to peak only after July as against the normal period of June, due to drought-like conditions in the first quarter of 2016. India is the second largest producer of cardamom in the world after Guatemala and the biggest consumer of the spice.
Guatemala leads with 60-66% of the world production, but has seen production come down in the past few years due to natural disasters like flood. Harvesting will be delayed due to the weather factor; there will be good supply in the market during August-October. The damage due to intense drought is limited, as plants have not been damaged much, but the yield is likely to go down substantially. Cardamom plants are very sensitive to rains with productivity directly related to the volume of rains and number of raining days.
Arrivals were at moderately higher levels but the upcountry buyers have slowed down. At the same time, the quality of the material arriving at the markets was inferior and that has aided the price decline. According to him, upcountry buyers were not active in the market. However, exporters were said to have bought an estimated 50 tonnes of cardamom last week. Technically market is under fresh buying as market has witnessed gain in open interest by 4.51% to settled at 974 while prices up 2.4 rupee, now Cardamom is getting support at 886 and below same could see a test of 880 level, and resistance is now likely to be seen at 900, a move above could see prices testing 908.
–Cardamom trading range for the day is 880-908.
–Cardamom prices ended with gains on restricted supplies from producing regions.
–Arrivals are likely to peak only after July as against the normal period of June, due to drought-like conditions in the first quarter of 2016.
–The damage due to intense drought is limited, as plants have not been damaged much, but the yield is likely to go down substantially.
–Cardamom prices in spot market gained by 7.10 rupees and settled at 862.10 rupees.
Courtesy: Kedia Commodities