Strong possibility of good growth in small cardamom
12-Nov-2024 08:54 AM
Strong possibility of good growth in small cardamom
The cardamom market appears poised for growth, but it is also facing challenges due to production shortfalls in major producing regions like India and Guatemala. Here's a breakdown of the key points:
Weak Crop in Major Producers: Both India and Guatemala are expected to have weak crops of small cardamom for the 2024-25 season. Guatemala, in particular, is facing a significant decrease in production—forecasted to be down by 44%. This is mainly due to a combination of factors, including insect infestations that have reduced productivity by 34%.
Impact on Global Supply: The drop in Guatemala’s production is especially noteworthy since it is one of the world's leading exporters of cardamom. A reduction of even 1,000 additional tonnes due to the ongoing insect problem would further constrain global supply, affecting pricing dynamics.
Demand Surge Before Ramadan: With Ramadan starting in February 2025, there is a strong possibility of increased demand for small cardamom, which is widely used in food, beverages, and other cultural preparations during the holy month. This seasonal demand boost could push prices higher, especially as the supply situation is already tight.
Price Dynamics: Due to the reduced availability of cardamom from Guatemala, prices for the spice have already risen, surpassing the cost of Indian cardamom in international markets. This price difference is likely to persist as demand picks up and supply remains constrained.
India’s Crop Outlook: Although India is also facing lower production, the outlook is still uncertain. Any further disruptions in Indian cardamom production could exacerbate the global supply crunch and further inflate prices.
Green Cardamom Production Decrease: In addition to small cardamom, the production of green cardamom (a broader category) in India has also decreased this year, which might have a knock-on effect on prices and availability.
Market Outlook:
Rising Prices: Given the reduced supply from both Guatemala and India, coupled with the approaching seasonal demand spike due to Ramadan, there is a strong likelihood of price increases in small cardamom in the near term.
Opportunities for Growth: The market for small cardamom appears promising, with the possibility of higher returns for producers and traders, but also higher volatility due to the fluctuating supply and demand factors.
For stakeholders in the cardamom market (producers, exporters, and traders), it would be prudent to monitor these trends closely, as the combination of reduced supply and seasonal demand could significantly impact prices in the months leading up to Ramadan 2025.