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

Discontent mounts in Idukki as cardamom market crashes

Last Updated : 24 June 2011 at 18:10 IST
IDUKKI, KERALA(Commodity Online): Discontent among cardamom cultivators in Idukki district in Kerala is reaching its zenith as markets crashed for this globally traded commodity in recent months. The Spices Park facilities owned by India’s Spices Board in Idukki are regularly witnessing farmer protests, processions and traffic disruption.

Farmers have alleged that cardamom auction prices are being quoted low this year and Spices Board is not taking any initiatives to revive prices.

They have alleged irregularities in e-auctions--an electronic auction facility by which cardamom is being sold by the farmers to traders.

But all these allegations were denied by a Spices Board official in a recent news paper report.

On Thursday, cardamom arrivals in the auction centre at Idukki totalled 34660 kilograms which quoted a maximum price of Rs.971.50 and an average price of Rs.768.02. A year back, the arrival figures stood at 14854 kilograms of which 14592 kilograms was sold, entailing a maximum price of Rs.1700 and an average price of Rs.1493.07.

The Board has denied cardamom prices have declined sharply and termed the movements in prices as usual fluctuations.

According to Charles J. Kithu, Director Spices Board, an uptrend in the prices of cardamom is visible following Thursday’s trend. Charles added that all warehouse activities like clearing and sorting of cardamom have been proceeding without a halt in Idukki.

Regarding the issuance of loans against warehouse receipts, he informed that certain internal problems with the bank playing as a deterrent which has been addressed lately.

A meeting of stake holders has been convened for next week in the Chief Minister’s chamber in Trivandrum.

But what do the farmers want the government to do? When this question was posed to M.K. Scaria, President Cardamom Growers Association, a farmer community in Idukki, he had the following suggestions:

--The State government should submit project proposal and get a ‘Price Stabilisation Fund’ sanctioned for cardamom from the Centre. This should be Rs.250 crore fund. The Swaminathan Commission had proposed a fund as a part of the 2006 Idukki package for cardamom farmers.

--The government can also source cardamom from farmers and distribute it on a subsidised basis on festive occasions through the PDS (Public Distribution System). This can be implemented on a pan India basis.

“A similar plan was implemented in 2010 in Tamil Nadu and was one of the reasons in driving cardamom prices up last year.”, he concluded.

Regimon Njallani, a cardamom farmer in Idukki said, “if the present trend continues and the market fails to revive, cardamom cultivation will become unviable and it may be wiped out of the market of Idukki...the grading, processing auctioning and warehouse receipts facilities are denied for farmers.”

Cardamom is a major item in the export basket of India; and in Kerala alone, about 30,000 farmers are engaged in its cultivation.

On the MCX, cardamom July futures this week opened at Rs.819.90 and was seen trading at Rs.870 on Friday evening.

As published in: http://www.commodityonline.com/news/Discontent-mounts-in-Idukki-as-cardamom-market-crashes-40279-3-1.html

Spices Board- IISR undertakes gene mapping of cardamom

Time of publication: 21 June 2011 at 14:30 IST
KOCHI (Commodity Online): The Spices Board is currently carrying out gene mapping of cardamom with the IISR (Indian Institute of Spices Research), said Director Research of Spices Board, J. Thomas.

“It is a DNA finger printing of cardamom accessions (genetic variants).” he explained.

The Board has a gene pool in cardamom—germplasm—probably one of the largest in the world. Under the programme, morphological yield parameters are measured and monitored. This helps the scientists to identify markers for specific parameters which would be helpful in breeding and other activities.

It is learned that Spices Board is having 900 accessions of cardamom. But there would be duplicates in these accessions. Under the study, DNA markers (signs indicative of character traits) are used to identify and remove duplicates and develop core collections. When breeding is carried out, desirable traits are crossed with minimal time being spent on developing cardamom with new characters. This would otherwise entail 10 to 15 years, i.e. if natural methods of breeding are followed.

Another project is an Integrated Nutrient Management Programme carried out in collaboration with seven institutions including Rubber Board, Coffee Board, Kerala Forest Research Centre etc. Through the project, the quantity of chemical fertilisers is targeted to be brought down by using biological agents. A new extraction procedure for neem cake has also been discovered that has brought down chemical content in pesticides by 20% when it came to the case of chilli and pepper.

Also, Spices Board is currently having collaborative research activities with RRL (Regional Research Laboratoy), DBT (Department of Bio Technology), DST (Department of Science and Technology), IIT (Indian Institute of Technology), IISc (Indian Institute of Science) and CFTRI(Central Food Technology Research Institute).

It is having a climate change study carried out in collaboration with ISRO (Indian Space Research Organisation). The activity involves measuring the impact of climate change on crops and pests with weather parameters being studied by ISRO and ground level things coordinated by Spices Board.

Thomas admitted that retaining researchers is an issue for Spices Board. Given that spices are grown in remote areas, where infrastructure facilities like schools, hospitals etc. are lacking, researchers are currently provided special packages, so that attrition reigned in.

He added that given the complexity of spices value-chain, research activities require a holistic approach.

As published in: http://www.commodityonline.com/news/Spices-BoardIISR-undertakes-gene-mapping-of-cardamom-40143-3-1.html