Cardamom on MCX settled up by 0.29% at 1327.1 on expectations of lower arrivals due to poor production caused by prolonged dry weather condition in the largest producing state Kerala. Weak rains during the current northeast monsoon also aided the bullish sentiment as it may impact picking during the current season. Arrivals are likely to decline further in the coming weeks as picking has entered the last phase. India exported 1,150 ton cardamom during Apr-Jun up 25% on year. 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. Technically market is under short covering as market has witnessed drop in open interest by -1.91% to settled at 616 while prices up 3.8 rupee, now Cardamom is getting support at 1318.6 and below same could see a test of 1310 level, And resistance is now likely to be seen at 1338.2, a move above could see prices testing 1349.2.
–Cardamom trading range for the day is 1310-1349.2.
–Cardamom prices gains on expectations of lower arrivals due to poor production caused by prolonged dry weather condition.
–India’s production is likely to fall by 30-40% in 2016-17 due to unfavourable weather conditions.
–Exports of cardamom during 2015-16 are pegged at 5,938 tonne as compared to 4,371 tonne during 2014-15.
–Cardamom prices in spot market gained by 7.20 rupees and settled at 1365.90 rupees.
Courtesy: Kedia Commodities