Support seen at 1267.2 for MCX Cardamom

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Cardamom on MCX settled down by -3.88% at 1289.4 amid a fall in physical demand in the domestic spot market. Prices gained recently after the update that 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. With licensed auction agencies deciding to stop cardamom auction at the Spices Park at Puttady here and at Bodinaikankudi, Tamil Nadu, dark days stare in the face of the High Ranges of the State. Most of the cardamom plantations have already stopped work. The Union Ministry has directed the officials of the Spices Board to take action against the issue of pooling and mixing of Gautemalan cardamom with the Indian cardamom.

The dry spell, prevailing in the growing regions of Idukki district, where 75 per cent of the cardamom is grown, is signalling of a further drop in the crop. Technically market is under long liquidation as market has witnessed drop in open interest by -6.91% to settled at 539 while prices down -52.1 rupee, now Cardamom is getting support at 1267.2 and below same could see a test of 1245 level, And resistance is now likely to be seen at 1332.3, a move above could see prices testing 1375.2.

Trading Ideas:
–Cardamom trading range for the day is 1245-1375.2.

–Cardamom continued its weak trend amid a fall in physical demand in the domestic spot market.

–Prices gained recently after the update that India’s production is likely to fall by 30-40% in 2016-17 due to unfavourable weather conditions.

–The Union Ministry has directed Spices Board to take action against the issue of pooling and mixing of Gautemalan cardamom with the Indian cardamom.

–Cardamom prices in spot market dropped by 6.40 rupees and settled at 1339.40 rupees.

Courtesy: Kedia Commodities

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