The onset of Gulfood 2024 in Dubai has reignited optimism among Indian cardamom exporters as they set their sights on gaining a competitive edge in Gulf markets for the upcoming Ramadan season. This move comes as Indian shippers anticipate a challenging battle against Guatemalan producers, driven by pricing differentials.
Competing with Guatemala In the Middle Of the Export Challenges and the Red Sea Crisis
Despite the prediction of tough competition from Guatemala, Indian cardamom exporters are buoyed by the lower pricing of Indian cardamom in the current season. The price difference compared to Guatemalan produce is a potential catalyst for increased sales, especially considering that higher prices led to a loss of business for Indian cardamom last year.
While exporters gear up for increased sales, the worsening Red Sea crisis poses a challenge. Exporters face hurdles in sending cargo to Gulf countries other than Dubai. This is leading to transit delays of almost two weeks and higher costs due to ship diversions. The emerging situation has not only affected the timely realization of funds from abroad but has also disrupted the cash flow in the domestic market.
Cardamom exporters at Gulfood 2024 report that buyers are grappling with complex decisions. While many find Indian prices favourable this season, the dilemma arises due to new crop arrivals and existing stocks of Guatemalan cardamom bought at lower prices when Indian crop prices were higher. The proximity of Ramadan sales further complicates decision-making, creating a chaotic environment for both exporters and buyers.
Unpredictable Indian Cardamom Market
The unpredictability of Indian cardamom prices intensifies buyers’ concerns. The debate revolves around whether prices will rise or remain steady soon. There’s also uncertainty about booking cargo immediately or waiting for potential price drops when new arrivals come in. This market volatility demands a cautious approach from both exporters and buyers.
The General Manager of KCPMC Ltd notes that the domestic market is grappling with instability, marked by lower demand and subdued export buying since January. The early Ramadan this year has allowed Gulf nations to cover their requirements. And a positive market trend is expected only when export buying gains momentum. Upcountry markets in North Indian cities are slow, further exacerbated by disruptions in truck movement due to the ongoing farmers’ strike in Haryana.
As Indian cardamom exporters witness opportunities at Gulfood 2024, the road ahead involves overcoming challenges posed by the Red Sea crisis, market complexities, and domestic disruptions. The industry’s success in the Gulf markets, particularly during Ramadan, hinges on strategic pricing. It also depends on market adaptability and collaborative efforts to address the evolving trends of the global cardamom trade.
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