The Promising Start of Large Cardamom
The initial arrival of this season’s large cardamom crop has ignited optimism within major producing regions, thanks to opening prices that exceed those of the previous year. Nevertheless, adverse weather remains a looming concern. Despite this, signs of recovery in the large cardamom market are beginning to emerge, and with continued sales support, a bullish phase may be on the horizon.
In limited quantities, the first crop of large cardamom is now making its presence felt across primary-producing states. Reports suggest that opening prices for this season range between $11,60 – 11,75 per kg, marking a substantial increase from the approximately $6,65 per kg seen just a year ago. Typically, this crop becomes available towards the end of August or in the first half of September.
Unfortunately, the growing conditions in major producing states this year were far from ideal. Unusually high temperatures and insect infestations took a toll on the crops. Moreover, these states experienced a significant rainfall deficit, with about 40 – 45% less rainfall during the current monsoon season. These combined challenges cast a shadow over the first crop of large cardamom, with anticipated losses of up to 70%. Additionally, certain areas saw heavy rainfall and flooding, further jeopardising the crop. The outlook for the second crop remains uncertain.
Market Response and Ongoing Challenges
The uptick in large cardamom prices in the local market can be attributed to increased purchases by stockists. Prices have rebounded by $5.45 – $5.90 per kg after an earlier decline from $13.90 – $15.00. Reports of crop damage in Bhutan and Sikkim suggest that the domestic market may only see an influx of large cardamom after the second harvest, coinciding with the upcoming Diwali festival. It’s important to note that the second crop, the primary harvest, also fell approximately 35 – 40% below the norm in the previous season, disrupting regular large cardamom auctions. Meanwhile, Nepal, a significant source of large cardamom imports, is grappling with dwindling stocks, and current import prices hover around $16.40 per kg.
During the first two months of the 2023-24 fiscal year, specifically in April and May, large cardamom exports experienced a 52% decline in quantity, totaling just 184.84 tonnes, along with a corresponding 56% drop in revenue, amounting to a mere $0.187 million USD. In comparison, the same period in the previous year saw exports of 385.85 tonnes of large cardamom worth $0.424 million USD.
A Glimpse into the Future
Despite the challenges posed by adverse weather and reduced yields, a glimmer of hope remains for the large cardamom market. Continued sales support in the coming days may pave the way for a bullish resurgence. Large cardamom, renowned for its price volatility, is no stranger to market fluctuations, and recent price increases suggest the potential for a more prosperous future.
Anticipations are pinned on the second harvest coinciding with Diwali, which could offer some relief to the market, even though formidable challenges may persist. Importantly, the market’s stability in the upcoming months hinges on a delicate balance between supply and demand, further complicated by unpredictable climate patterns affecting production in various regions.
In the face of adversity and declining yields, the large cardamom market remains on the cusp of a potential resurgence, offering a glimmer of hope for a brighter future.