Fresh buying seen in MCX Cardamom; Support seen at 1138.1

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Cardamom on MCX settled up by 4% at 1168.3 amid rising domestic as well as export demand in the spot market. Besides, tight supplies from producing regions also added support to cardamom prices’ uptrend. This increase in prices is mainly attributed to the long dry spell in cardamom growing areas of South India, which is expected to impact cardamom production in the 2016-17 season. Good domestic demand continued to persist at a time when the arrivals were showing a declining trend.

Whereas, harvesting in half of the main growing areas is expected to commence from August-end while picking in the rest of the areas would begin from mid-September. As a result, picking is likely to be limited to 3 to 4 rounds given the present weather conditions as against the normal six rounds. Arrivals stood at 10.5 tonnes and the almost the entire quantity was sold out.The extended dry spell with high temperatures that prevailed from December 2015 to the first fortnight of May 2016 affected the flower setting, thereby delaying the harvest.

According to trade sources, dry weather has affected about 10-15 per cent of cardamom plants and an estimated a loss of 20-25 per cent in production in Kerala’s Idukki district, which produces 80 per cent of the small cardamom in the country. Thus, cardamom output is pegged at about 17,000-18,000 tonnes next year compared to 25,000 tonnes last year. Technically market is under fresh buying as market has witnessed gain in open interest by 8.02% to settled at 1253 while prices up 44.9 rupee, now Cardamom is getting support at 1138.1 and below same could see a test of 1107.9 level, and resistance is now likely to be seen at 1183.4, a move above could see prices testing 1198.5.

Trading Ideas:

–Cardamom trading range for the day is 1107.9-1198.5.
–Cardamom prices gained amid rising domestic as well as export demand in the spot market.
–Besides, tight supplies from producing regions also added support to cardamom prices’ uptrend.
–Good domestic demand continued to persist at a time when the arrivals were showing a declining trend.
–Cardamom prices in spot market dropped by 13.50 rupees and settled at 1031.30 rupees.

Courtesy: Kedia Commodities

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