With local cardamom prices hovering around ₹ 3,200 per kg last month, India could not beat competition from Guatemala, the largest producer of spices, in the Gulf countries. Guatemalan cardamom had more takers at $ 42 per kg, about $ 10 less than Indian rates.
“But now Guatemala seems to have run out of stock and the fear of Covid-19 has had an impact on prices. There are offers for Indian cardamom at $ 46 per kg, ” said SPGR Nityanandan, an exporter.
Unless local prices cool down with an increase in supply, exporters will likely find it difficult to take advantage of lower prices in the Gulf countries. “In addition, there is a shortage of good quality cardamom on the market, particularly the 7mm fat variety,” said Nityanandan.
Shipments from India have been going to Kuwait, Dubai and Bahrain following Saudi Arabia’s ban on Indian cardamom due to pesticide residues for over a year now. As Saudi Arabia purchased a large share of Indian cardamom, its absence from the list of export destinations led to a sharp drop in cardamom shipments from India.
With the demand for Ramadan, there is a greater demand from the countries of West Asia.
Indian cardamom exports fell 72% year-on-year to 405 tonnes during the six-month period ending in September 2019.
Cardamom production in 2019 was around 12,000 tonnes, almost the same as the previous year. The stock of plantations coming up for auction is almost finished, according to local traders.
“Producers who hold stocks in anticipation of price increases may need to gradually release them, as exporters have kept away from purchases,” said KS Mathew, producer of cardamom.
This year, part of the stock is left to producers due to the weakness of exports and the drop in domestic consumption.
Mathew said falling prices below ₹ 3,000 per kg would boost export demand. “Good summer rains in March and April will increase the prospects for a bumper harvest in the next harvest and lower prices,” he said.