Guatemala Cardamom: Much ado about nothing

Last Updated : 06 March 2013 at 12:50 IST

The picture looks a bit hazy.

However, reliable sources have confirmed that officials from Cardex, a Guatemalan cardamom business, were at the auction centre in Puttady Spices Park yesterday in Kerala, South India. Once the Cardaex officials were identified--the farmers seemed to have got advance information in this regard—they were sent back from the auction centre. The auction stood frozen for half-an-hour.

The farmers accused that the Guatemalan group was there to promote Guatemalan cardamom. Now, even if that turns out to be true, what is wrong with this in an era of globalization; where we refer the term markets in an international sense rather than a local sense.

Sources reported that the Cardex officials—the Managing Director of the Group, Cardex's Bombay head and Dubai head—were there at the Puttady Spices Park to attend the cardamom auction (who wanted to have a first-hand experience of it as there are no auctions in Guatemala; a guess).

They have left Kerala on farmer pressure, but looks like have put up for the time being in Tamil Nadu.

“We seem to say Adithi Devo Bhava and do the opposite.” said a Spices Board Official who was asked about the issue.

“It is not true that the cardamom from Guatemala has been mixed with the Indian cardamom and put for auctions.” said another stakeholder who rubbished the argument doing rounds.

The stakeholder, in fact said that the Cardex officials were there to see if they could actually prop the prices up.

This could not be independently verified and prima facie does not stand any test of logic. If they were there to see if they could inflate the prices, what incentive does it provide for? After all, “It is not true that the cardamom from Guatemala has been mixed with the Indian cardamom and put for auctions.”

So what is the issue? Nothing!

“See, the Spices Park is also a tourist destination. Who could say if they were actually there or not and on what basis?” a Spices Board official asked. “Also, one should not forget the fact that Indians are involved in cardamom cultivation in Guatemala.” the official revealed.

Meanwhile Rejimon Njallani, an activist-farmer said that the whole issue exists to bring the prices down.

The Spices Board on Monday warned about “misleading reports about Guatemala cardamom imports to India causing a fall in prices”. 

As published here: http://www.commodityonline.com/news/guatemala-cardamom-much-ado-about-nothing-53285-3-53286.html

India Cardamom: Volatile sessions expected as farmers demand decontrol

Last Updated : 11 October 2012 at 09:00 IST

India cardamom is expected to trade volatile sessions in the coming days as prospects of farmer unrest looms demanding a complete decontrol of commodity.

As per the government rules, the Spices Board has been given exclusive mandate for cardamom and only licensed traders could carry out trade in the commodity. Prior to the time it got stalled, cardamom trade had been carried out through auctions controlled by the Spices Board which also set the benchmark price in spot markets.

The Board has provided license to 8 auctioneers. Six of them will conduct auctions in six days. The rest of two, who have notified least quantity of cardamom would jointly conduct auction in a single day; thus the eight players clock 7 days a week of cardamom auction process.

The said auctioneers are supposed to have pooling centres across the district of Idukki. Two days prior to the auction, farmers begin to take cardamom to auctioneer-operated pooling centers. The cardamom thus pooled are amassed in bags and assigned lot numbers. The corresponding lot number is given away to farmers for later identification.

A sample of 1 kilogram from lots is taken to the auction centre at Bodinayakanur and Puttady where the samples are examined and prices are arrived at. From that point on the auction begins. The farmers are entitled to their share of respective auction money in ten days starting the date of auction. The one who bids and wins the auction should pay the auction money to the auctioneer in a matter of seven days.

But this system got stalled as the Board increased tick price of cardamom from 50 paise to 5 rupees.

The increasing of tick price did not go down well with the traders who boycotted the auctioning process and demanded the tick price be maintained 50 paise. As a result, cardamom auctions got suspended in Idukki's Puttady and Bodinayakanur (in Tamil Nadu) since September 24.

It has to be noted that the rules do not forbid farmers from carrying out sales of cardamom in open markets to licensed traders.

Meanwhile, trader community has approached the Madurai bench of Madras High Court in Tamil Nadu to settle the auction issue. Also, a few traders in guise of farmers are learned to have approached the Kerala High Court with the same cause, as per a farmer.

A Spices Board official informed Commodity Online that Kerala High Court may take up the case on Thursday regarding auctions issue.

“Things may take time to settle. The High Court may demand the Kerala Govt to be a party in the case and is expected to ask the stakeholders to sit together and talk so as to reach an amicable solution. The Madurai Bench of Madras High Court meanwhile is deemed to refer the case to Kerala High Court given the fact that two courts may not pass the judgements on the same case.” he said.

The official confirmed that some traders in guise of farmers have presented the case before the High Court.

Farmer unrest in the offing?

A farmer meanwhile has said that with the auctions suspended and trade being carried out with licensed traders, the growers have started getting better price for their produce and grower community sentiment irrespective of political party affiliations is increasingly inclined to the discontinuing of auctions.

Hence a court judgement favouring auction may prove to be counter productive and even if the auction is resumed may witness lack of farmer participation as far as the glimpse allows.

The farmers may stop providing cardamom to auctioneers and may give it away directly to traders. The auction system thus may become obsolete, eventually.

“Since the time auctions got discontinued, farmers have obtained Rs.125-175 in price appreciation in cardamom.” the farmer noted.

In fact, the same activist-farmer said that the farmer community is ready to launch protests demanding decontrol of cardamom sector.

It seems a volatile season is in store for Idukki's cardamom sector.

As published in: http://www.commodityonline.com/news/india-cardamom-volatile-sessions-expected-as-farmers-demand-decontrol-50812-3-50813.html

India Cardamom prices bullish in spot, bearish in futures

Last Updated : 10 October 2012 at 09:50 IST

IDUKKI (Commodity Online): India cardamom prices appeared to be bullish in spot markets and bearish in futures on Tuesday.

Spot cardamom at Idukki's Nedungandom witnessed sales at the rate of 800/kg for high quality variety and Rs.750/Kg for average quality variety.

The overall trend appears to be bullish with no rains in the growing area. While there has been no news on export demand, festive season sales—Deepavali demand-- has picked up.

“Of particular mention should be the enquiry from Kolkata.” said a trader.

On Monday, Nedungandam witnessed cardamom sales at the rate of Rs.800/Kg in local open markets. Overall trend appeared to be bullish.

Tuesday futures

MCX Cardamom November contract opened at Rs.935, touched a high of Rs.960 and closed at Rs.925.90 before succumbing to a low of Rs.920.

“Cardamom traded in negative territory today and on MCX, November contract made an intraday low of Rs.920. More selling pressure may arise in coming sessions considering global production scenario, while some export orders are expected in upcoming festive season. Good support expected at Rs.920 and resistances at Rs.945 and Rs.980” our in-house analysts said.

India trends

Meanwhile, stalemate continues in cardamom trading areas in Idukki for the second week as the auctions remain suspended. Growers and traders are looking forward to judicial assistance to curtail the stalled situation. As per unconfirmed media reports, 90% growers are referred to be happy with a minimum bidding rate of Re 1 as recommended by the Spices Board constituted Empowered Committee.

While reports suggest that growers have approached the Kerala High Court, traders are approaching the Madras High Court to clear the air.

Global trends
Also, new crop season has started in Guatemala and a bumper cardamom crop is expected there.

Total quantity to be produced is expected to reach 32 to 33 thousand tons, plus a carryover stock of at least 1,000 tons . Last season, Guatemala exported 29,000 tons of cardamom and around 1,000 tons were left in Guatemala in the hands of speculators.

If this carry over stock is added to Guatemalan production for this season, we can expect around 33 to 34 thousand tons from Guatemala this season.

Some areas in cultivation have been infested since a couple of years back by Thrips. A small insect that causes malformations on the cardamom pod.

Fortunately until today most of the cardamom producing areas are free from the infestation. In any case one can expect a damage in between 7 to 10 percent of the crop, compared to 3 to 5 percent last season. This infestation will affect mainly the quality of the Guatemalan cardamom this season.

As published in: http://www.commodityonline.com/news/india-cardamom-prices-bullish-in-spot-bearish-in-futures-50787-3-50788.html

Kochi had no sellers for Garbled Pepper at 432/kg on spot despite buyers

Last Updated : 02 October 2012 at 10:55 IST

KOCHI (Commodity Online): Kochi witnessed sales to the tune of 30 tons of ungarbled pepper at the rate of Rs.411/kg on Monday. There were buyers for garbled variety at the rate of 432/kg, but no sellers.

As per reports, arrivals from the primary markets have been robust. Brazilian production may get delayed this time around.

Pepper October contract on the NCDEX has been trading in a range without much of volume in last few trading sessions. Technically it is having an immediate support and resistance at 43100 and 43800 respectively. Increased arrivals in spot market may take the commodity to the southern direction in coming sessions. Break out of the level of 43100 can be considered as a good entry level on the selling side.

Cardamom

Cardamom prices have risen by Rs 50 to Rs 100 per kg to Rs 750 per kg as auctions at Bodinayakannur and Vandanmedu have remained suspended since September 24. The growers and even some Spices Board officials are keen to stop the auction process given various factors.

“There is stiff lobbying amongst people who participate in auctions and they do not allow prices to go beyond a point.” said a market player.

Meanwhile, dry weather conditions have impacted cardamom plantations in Idukki. Growers expect a drop of 40% in production this season against a normal production of 12,000 to 13,000 tons annually. If auction remains suspended prices are likely to rise further, sources said.

Prices to hit the roof if climate hostile, Guatemala output low

If the climate continues to maintain a tough patch, it is highly likely that cardamom prices would hit the roof. But it all depends on the Guatemala cardamom production. If Guatemala cardamom production too is low, then one will not have enough of cardamom to sell in the markets, meaning prices would skyrocket, sources said.

Newspaper reports indicate cardamom plantations in Guatemala have not recovered from the damages that have been suffered.

Now, with festive demand in the offing and export demand pending it can be safely assumed that India cardamom does hold a bright future.

Currently the carryover stocks and rupee appreciation is keeping cardamom tethered to a bearish trend.

Cardamom has been maintaining positive sentiment in recent days as export demand is expected in the ensuing weeks, ahead of coming festivities. Cardamom October contract is having a good support at 960. So buying around 985 with stop loss of 960 is a good trading strategy for coming session.

Immediate outlook however is bearish.

Natural Rubber

Natural Rubber has seen trading at the rate of Rs.195/kg in the Kottayam markets. MRF Tyres has been an active buyer except for the last week. “Their stocks have been low and although there are no exports occurring given the relatively weak rupee, imports are happening.” The farmers are also not keen to come out with stocks, a trader said. The world market is a buyer's market now and Thailand has come up with cap on exports to arrest drop in prices.

The overall market trend is bullish. Natural rubber on the TOCOM in Japan also witnessed an uptrend with gains to the tune of 5 Yen yesterday.

Natural rubber is having good support levels at 19100 and 18700 and an immediate resistance at 19600. It may start recovery from the levels near 19100 as the overall trend for medium term remains positive. Outlook is bullish.

As published in: http://www.commodityonline.com/news/kochi-had-no-sellers-for-garbled-pepper-at-432kg-on-spot-despite-buyers-50642-3-50643.html

What will happen to India Cardamom if there is no auction?

Last Updated : 27 September 2012 at 16:20 IST

KOCHI (Commodity Online): When you wake up one fine morning to the aroma of a cardamom flavoured tea, the last thing that would cross your mind would be that of cardamom auction being carried out in Idukki; or for that matter, the absence of the same, if the ongoing strike in auction centres by traders there is taken into account.

Now, you would be surprised to hear that the same is the case with Spices Board which controls the auction and with farmers, who are supposed to be the beneficiaries of the auction mechanism.

And the auction is in no way determining the benchmark prices of cardamom on the MCX. More on this at the end as some background explanation is warranted.

“Way back in 1987 around 4300 tons of cardamom had been produced and a majority of the same was exported. Then farmers used to get remunerative prices. Years have passed by since the auctioning mechanism has been applied to cardamom. Close to 50 participants take part in the auction. The outsiders who come here to take part in auction are threatened away. Obviously, price discovery is not occuring.” said Rejimon Njallani, a cardamom farmer and activist.

“Open market is the best option.” he said.

Even a Spices Board official said off-the-record that the Board is willing to do away with auction.

But the auctioneer community seems to be least keen on giving up the auction.

“Being a farmer who owns 500 acres of cardamom plantation, auctioning is the best way to discover price of a commodity; not only in case of cardamom, but any other commodity.” said a farmer-cum-auctioneer. His enterprise is licensed to conduct auctions in cardamom.

He is of the opinion that farmers, owing to carry-over stocks are not getting high prices for cardamom. “This misleads the farmer community to identify auctioning process as the culprit.” he added.

Cardamom auction process

Cardamom auction is controlled by the Spices Board.

The Board has provided license to 8 auctioneers. Six of them will conduct auctions in six days. The rest of two, who have notified least quantity of cardamom would jointly conduct auction in a single day; thus the eight players clock 7 days a week of cardamom auction process.

Eight auctioneers are supposed to have pooling centres across the district. Two days prior to the auction, farmers begin to take cardamom to auctioneer-operated pooling centers. The cardamom thus pooled are amassed in bags and assigned lot numbers. The corresponding lot number is given away to farmers for later identification.

A sample of 1 kilogram from lots is taken to the auction centre at Bodinaikkannoor and Puttady where the samples are examined and prices are arrived at. From that point on the auction begins. The farmers are entitled to their share of respective auction money in ten days starting the date of auction. The one who bids and wins the auction should pay the auction money to the auctioneer in a matter of seven days.

MCX cardamom and specification mismatch

On the MCX, however, the specifications for cardamom is different when compared to the specifications of cardamom auctioned at Idukki.

“On the last day of the auction, cardamom prices were quoted in the range of Rs.640 even as Rs.946 was the price on MCX.” said Hareesh, Research Head, Geojit, Kochi.

“There is a specification mismatch between the cardamom on the MCX and that which comes to auction. The latter witnesses 5-6 mm cardamom for transaction. The former—on the MCX-- 7mm cardamom is traded.”

So, how relevant is the case of cardamom auctioning? 

As published in: http://www.commodityonline.com/news/what-will-happen-to-india-cardamom-if-there-is-no-auction-50558-3-50559.html