The outlook for cardamom in 2023 seems to be not so rosy, amid reports of farmers abandoning the crop in the main growing regions of Idukki on declining prices.
With rates plummeting to $9,65-10,26 per kg range, there is an accumulation of stocks in the consuming centers, leading to a tepid local demand. There has been a 25 percent drop in auction arrivals during the peak cropping months of October and November.
“We are getting reports of farmers removing cardamom to plant other crops. This is mainly in areas where cardamom was freshly planted from other crops when the prices sky-rocketed,” said SB Prabhakar, a planter in Idukki.
Further reduction in area
“We expect further reduction in area by next year as farmers who have taken land on lease are either returning the land or asking for a reduction of lease rent. The production in 2021-22 was 34,000 tonnes which is expected to come down by around 28,000 tonnes next year. There is a huge crisis, and this will eventually lead to further reduction in supply,” Prabhakar noted.
Export demand is also poor barring good qualities, as Guatemalan cardamom is being offered at very low prices. As prices have reached low levels, farmers have reduced investment or abandoned the farms. This year, farmers are experiencing a drop in both price and crop, he added.
With production costs hovering around $14,48 to $15,69 per kg, farmers are losing around $4,22 per kg. Prabhakar urged the government to introduce air freight subsidy to incentivise cardamom exports which will help ship more quantities.
PC Punnoose, CEO, CPMC Ltd, a leading auctioneer, described the situation as one of the worst in the last two decades.
The expectations of a price improvement in 2023 will depend on the liquidation of carryover stocks in the market in the lean months from January to June. The subdued demand in the export market after Ramadaan has also led to the flooding of capsules in the domestic market.
Difficulties in paying wages
C Sadasivasubramaniam, secretary of Kerala Cardamom Growers Union, said many estates are now finding difficulties in paying wages. Traders are reluctant to take fresh stock from farmers. The scarcity of rains in the beginning of the year and the heavy downpours in the monsoon season has led to a significant drop in production.
Sarath S Pillai, Director, Acumen Capital Market, the global market is poised to grow by $168.87 million during 2021-2025, at a CAGR of 3.06 per cent. The market is driven by the growing awareness about the health benefits of cardamom, its increased usage in developed countries.
Source: the Hindu Business Line
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