Support seen at 1411.8 for MCX Cardamom

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Cardamom on MCX settled up by 2.98% at 1431.4 supported by current year lower production expectation. Domestic buyers reported active in the spot market. They mainly bought good colour 7.5 mm and 8 mm bold capsules in the spot market. At Kochi market arrivals were reported at 59667 kgs, higher by 50698 kgs from previous day’s arrivals. 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. 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.

Decline in the north-east monsoon which is expected in the coming days would result in severe water shortage in the growing areas. Technically market is under fresh buying as market has witnessed gain in open interest by 7.83% to settled at 1129 while prices up 41.4 rupee, now Cardamom is getting support at 1411.8 and below same could see a test of 1392.1 level, And resistance is now likely to be seen at 1447.6, a move above could see prices testing 1463.7.

Trading Ideas:
–Cardamom trading range for the day is 1392.1-1463.7.

–Cardamom prices gained mainly supported by current year lower production expectation.

–Domestic buyers reported active in the spot market and mainly bought good colour 7.5 mm and 8 mm bold capsules.

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

–Cardamom prices in spot market gained by 97.20 rupees and settled at 1363.60 rupees

Courtesy: Kedia Commodities

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