Cardamom firms as Kerala monsoon stirs crop fears and exports surge

Cardamom prices are firming as Indian auction arrivals thin and the onset of the southwest monsoon over Kerala revives concerns about the next crop. With exports more than doubling year-on-year and Guatemalan offers staying expensive, traders increasingly expect a firm to higher price path into early June. The recent recovery in Indian auction prices, despite lighter buying, underscores how quickly sentiment has swung away from earlier bearishness. Market focus is now squarely on weather in Kerala and the potential for a roughly 20% smaller crop, just as export demand accelerates. Domestic wholesale values in Delhi have eased only marginally, while current export offers from New Delhi remain elevated in euro terms. Against a backdrop of emerging monsoon showers and below-normal rainfall risk, supply-side anxiety is likely to keep buyers active on dips.

Prices & Auctions

Arrivals at the latest auction run by the Kerala Cardamom Processing and Marketing Company (CPMC) have fallen sharply to about 44,980 kg, from 64,066 kg at the 18 May sale. This tightening in physical availability lifted the average auction price to around USD 27.89/kg, up from approximately USD 25.52/kg previously. Converting at ~EUR 1 = USD 1.08, this implies an average auction level rising from roughly EUR 23.65/kg to about EUR 25.80/kg.

In Delhi’s wholesale spice market, 7.5 mm small cardamom recently eased by about USD 0.52 to USD 26.65–27.69/kg, equivalent to approximately EUR 24.65–25.60/kg. The slight softening reflects some resistance from domestic buyers at higher levels rather than any fundamental shift in supply. Meanwhile, New Delhi FOB offers for whole green cardamom remain elevated: non-organic 7.5 mm is indicated around EUR 23.05/kg, 7–7.2 mm at EUR 21.70/kg and 6.5–6.8 mm at EUR 20.80/kg, with 8 mm premium grade near EUR 24.06/kg as of 23 May 2026.

Supply & Demand Drivers

The core market concern is the new Indian crop. Rainfall in Kerala has been comparatively scarce in recent weeks, and the imminent arrival of the southwest monsoon raises fears that yields could be negatively affected, with traders already discussing a potential 20% output shortfall. Early monsoon-related showers can benefit vegetative growth, but if total seasonal rainfall ends up below normal, pod setting and fill may suffer, tightening supply further into 2026/27.

On the demand side, India’s export performance is exceptionally strong. Shipments in the first ten months of the 2024–25 financial year reached 12,281 tonnes worth INR 30.20 billion, versus 5,294 tonnes and INR 11.62 billion a year earlier. That represents roughly a 132% jump in volume and a 160% surge in export value, signalling robust offtake from key markets. Elevated Guatemalan cardamom prices add an additional floor under Indian quotes by limiting substitution possibilities for international buyers.

Geopolitical tensions, notably between the US and Iran, are tempering demand from some exporters focused on West Asia. However, this drag has so far not been sufficient to offset the broad-based strength in global buying interest. With arrivals at Kerala auctions tapering and international demand resilient, the underlying balance is tilting towards tighter availability for the remainder of the marketing year.

Fundamentals & Weather Outlook

Recent e-auction data from Kerala indicate that average grower prices have been hovering in the mid‑INR 2,400–2,600/kg range in late May, consistent with the firming trend reported in physical markets. Volumes remain moderate, with several auctions showing 35,000–60,000 kg of arrivals, supporting the narrative of thinning supply into the pre-monsoon window. Market talk of a roughly one‑fifth crop reduction is therefore being taken seriously, as even a modest weather shock could quickly translate into a structurally tighter balance sheet.

Meteorological updates point to the southwest monsoon reaching Kerala between late May and early June, but with an increased probability of below‑normal seasonal rainfall, partly linked to El Niño risk. Light to moderate rains with isolated heavier showers are expected over Kerala in the coming days, improving soil moisture but also confirming increased weather volatility. For cardamom, the key risk is not the onset itself but the possibility of erratic or deficient rainfall later in the season, which could cap production just as exports remain buoyant.

Market & Trading Outlook

Traders in the physical market increasingly expect recent bearish sentiment to fade as the combination of thinning arrivals, crop uncertainty and strong exports dominates price formation. With Guatemalan origin remaining comparatively expensive, importers have limited room to switch away from Indian material without accepting higher replacement costs. Overall, the bias for small cardamom in India over the next few weeks is for firm to slightly higher prices, especially for well‑sorted 7–8 mm grades.

• Importers / industrial users: Consider covering near‑term requirements on current dips, particularly for 7–7.5 mm and 7.5–8 mm grades, given rising monsoon‑related crop risks and firm export demand.
• Exporters: Maintain a cautiously bullish stance but avoid over‑committing long‑dated contracts without crop visibility; use current firmness to secure margins on nearby shipments while monitoring US–Iran tension and freight costs.
• Producers / local sellers: With auctions already reflecting higher averages on reduced arrivals, gradual selling into strength appears prudent, retaining some volume in case monsoon performance disappoints and prices extend higher.

Short-Term Price Direction (3-Day View)

• Kerala e-auctions: Bias mildly higher in EUR/kg terms as arrivals stay constrained and buyers position ahead of clearer monsoon signals.
• Delhi wholesale market: Prices for 7.5 mm small cardamom likely to stabilise or edge up after recent minor easing, tracking stronger auction benchmarks.
• New Delhi export offers (FOB): Expect a firm to slightly higher tone for non‑organic 7–8 mm grades over the next three sessions, with organic grades steady to firmer in sympathy.