Fresh buying seen in MCX Cardamom; Support seen at 1330

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Cardamom on MCX settled up by 3.99% at 1358.3 amid uptick in physical demand for cardamom in the domestic spot market. India’s production is likely to fall by 30-40% in 2016-17 due to unfavourable weather conditions. Prolonged dry weather occurred in the Idukki district, which has severely affected yield of the crop, which was in the flowering stage at that point of time. In many cases, the plants have been partially or fully destroyed due to the dry weather, as many plantations in the region do not have irrigation facilities.

The Spices Board had reported in June that cardamom crop loss due to deficient rainfall and high temperature is likely to be up to 20-25% during the 2016-17 crop season. Damage to plants in Idukki due to drought-like conditions is 5-10%. Board data shows production of small cardamom during 2014-15 pegged around 18,000 tonne from 69.970 hectares. Exports of cardamom during 2015-16 are pegged at 5,938 tonne as compared to 4,371 tonne during 2014-15. Farmers did not want to sell fearing delayed receipt of sale proceeds while the buyers were not enthusiastic to buy for want of sufficient funds and that in turn led to the suspension of over 50 per cent of the auctions last week.

Small cardamom exports from India are likely to earn as much this fiscal as the last one despite a shortfall in volumes, as shippers are getting good price for the spice. Technically market is under fresh buying as market has witnessed gain in open interest by 5.23% to settled at 583 while prices up 52.1 rupee, now Cardamom is getting support at 1330 and below same could see a test of 1301.8 level, and resistance is now likely to be seen at 1372.4, a move above could see prices testing 1386.6.

Trading Ideas:
–Cardamom trading range for the day is 1301.8-1386.6.

–Cardamom prices gained amid uptick in physical demand for cardamom in the domestic spot market.

–India’s production is likely to fall by 30-40% in 2016-17 due to unfavourable weather conditions.

–Prolonged dry weather occurred in the Idukki district, which has severely affected yield of the crop.

–Cardamom prices in spot market gained by 23.10 rupees and settled at 1358.10 rupees.

Courtesy: Kedia Commodities

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