NEWS
Cardamom prices came down since the beginning of January. For the first three month of the season (October to December) the speculators bid on higher prices based on false information that Guatemalan cardamom crop was going to be less quantity than last season. By the beginning of January it was impossible to hide that the total crop production of this season is going to be much higher than last season by about 6,000 to 7,000 tons more. When speculators found out about it started selling their stocks rapidly, this was aggravated by the fact that much cheaper cardamom started arriving at port of destination and selling at very low prices. These two things combined created a competition in the consumer countries to sell fast for fear of prices going down, and they themselves helped to create the effect that they were most afraid of. When the group of local exporters that were not speculating and did not have stocks realized that prices were going down, they started offering lower prices for the first time since October. Meanwhile there were no buyers in the local market for the cardamom that was coming from the fields as all the exporters were afraid of a price fall, so local prices started to go down rapidly. All this together created a spiral of prices going down during the month of January 2011. Local prices in Guatemala went down from 7,800 Quetzales (our local currency) per quintal (one hundred pound bag) to 4,100 Quetzales by the end of January. When local exporters saw the opportunity to buy at ridiculously low prices at the beginning of this week, they went into the market to buy and created a rebound on the local prices. Prices have gone up this week from Q 4,100 to Q 4,800 but very little came out because farmers had stopped harvesting because there were no buyers for their cardamom for the whole month of January. So we expect market to reach a relatively low period stability next week when local prices may reach somewhere between Q 5,000 and Q 5,500 per quintal. This may not last more than a short period of a month, or it may be that prices may keep going down but at a much slower rate than before. One thing is for sure, if total production of Guatemala this season will be 24,000 to 25,000 thousand tons compared to 18,000 last season, we will see before the next crop starts much lower prices, and most likely even lower than when this crop season started in September/October.