MCX Cardamom market under long liquidation

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Cardamom on MCX settled down -2.15% at 1352.5 on profit booking after prices gained recently amid poor production caused by prolonged dry weather condition in Kerala. Tension gripped Bodi cardamom auction centre as traders boycotted the auction demanding action against a Kerala-based private auction centre that refused to settle dues for the cardamom auctioned in it. With no auction, a large quantum of cardamom, registered by farmers for sale at Bodi Auction Centre, got stagnated.

Work at the cardamom auction centre was completely paralysed owing to the boycott. A total of 68,273.6 kg of cardamom got stagnated in Bodi, said sources in the auction centre. The cardamom growers and traders demanded that the Spices Board should direct the private auction centre to remit the amount immediately. At Kochi market estimated market supply was at 36308 kgs, lower by 23359 kgs as against previous day. Cardamom output too has been affected by drought. Consequently, the average price has peaked to a record of Rs 1300 per kg.

The growers fear the arrivals will dry up in a few months as the output could be around 15,000 tonnes, half of what was produced last year. 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. Technically market is under long liquidation as market has witnessed drop in open interest by -17.97% to settled at 776 while prices down -29.7 rupee, now Cardamom is getting support at 1331.7 and below same could see a test of 1310.8 level, And resistance is now likely to be seen at 1381.8, a move above could see prices testing 1411.

Trading Ideas:
–Cardamom trading range for the day is 1310.8-1411.

–Cardamom prices dropped on profit booking after pirces gained recently amid poor production caused by prolonged dry weather condition.

–The cardamom growers and traders demanded that Spices Board should direct the private auction centre to remit the amount immediately.

–At Kochi market estimated market supply was at 36308 kgs, lower by 23359 kgs as against previous day.

–Cardamom prices in spot market dropped by 19.90 rupees and settled at 1339.20 rupees.

Courtesy: Kedia Commodities

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