The second round of picking in the new crop of Cardamom has begun. We are in the peak season just now with about 650 tons of arrivals every week. The weather has turned warmer in the past few days though very humid. There is forecast for further rainfall in the coming days which is a good sign for the cardamom plantations.
The arrivals consist mainly of the smaller grades with only about 27-28% being of the bolder grades. The planters are also withholding the stocks of the bold grades considering the very low prices.
Internationally, all the major consuming centers reported above normal & high levels of inventory coupled with poor sales in the month of Ramadhan. There is inventory pile up in the international channel at prices higher than the current levels. Traders are looking to sell these stocks quickly in anticipation of the new Guatemalan crop in the coming month.
The domestic festival demand has started now. We are also seeing good buying interest from speculators, stockists besides the traders in the commodity exchange.
All these indicate that the markets believe that the prices are at the rock bottom levels and are poised for a turn around. With the Indian Rupee weakening against the dollar, Indian exports become cheaper. This would make Indian Exports more attractive and we could see exports surpassing the level of 4500 tons exported last year.
Demand from non-traditional industries continue to grow at a fast pace and we are seeing demand coming from new markets as consumers find the prices cheap and realize the difference in the quality.
We feel that the prices are now headed for a rebound after a consistent fall in the past few weeks. This will be a good opportunity for investors and traders to buy at the lower levels.
We advise buyers to cover their maximum requirements for the coming couple of months.