Early Season Challenges and Speculative Impact
The arrival of the new large cardamom crop has surpassed the expectations of farmers, yet yields have been lower, especially in Nepal, resulting in early seasonal price spikes due to speculative buying. This led to difficulties for stockholders, who began panic selling last month. After a decline from the peak price by approximately $1,20 per kg, the market value has subsequently rebounded by the same amount. Presently, an additional increase of roughly $1,20 is anticipated in the near term.
Following a notable price reduction in large cardamom, major buyers have quickly bought up the remaining stock from Nepal, reducing export purchases. This has elevated currency prices in Nepal from INR 74,000 to INR 82,000, now equating to $888 to $984 respectively, thereby pushing up local market prices to approximately $15,84 to $15,96 per kg after a recent surge of $0,84 to $0,90. It’s important to recognize the significant decline in the large cardamom crops in areas such as Siliguri, Gangtok, and Bhutan, with notable losses also reported in Nepal, a major production hub.
Market Revival and Increased Demand
The market witnessed a downturn with prices falling to as low as $14,52 in Gwalior, with stockists unable to sell for even $14,40 per kg. However, a constrained supply coupled with robust demand from Nepal has lifted prices back to around $15,48 per kg. The market had previously been disrupted by speculative trading, leading to significant stock reductions and complex delivery issues for speculators, who hold 80% of the stock.
As deliveries conclude, market prices have started to increase again since March, boosted by heightened consumption during Ramadan and rising demand from Qatar and other countries. This has prompted exporters and major stockists to increase their inventory. Currently, there is no significant risk associated with large cardamom, with expected profits of approximately $1,20 to $1,80 in the foreseeable future. A more substantial price increase is predicted after April.
Despite initial fluctuations due to speculative trading and reduced yields, the large cardamom market is experiencing a resurgence, driven by increasing international demand and seasonal consumption trends.