OLD NEWS
December, 2010
The cardamom market is being manipulated by speculators. False Indian reports that the Guatemalan cardamom crop was lost this season are circulating in the net, driving cardamom prices much higher than they should be. The total cardamom production in Guatemala from September 2010 until today (Dec. 23, 2010) is 15,500 MT of cardamom. This quantity represents about 60 to 65 percent of the total cardamom to be produced in the 2010/2011 crop season, as the season is expected to end in April 2011. Out of this quantity around 8,500 MT tons have been exported so far, the rest is being held by speculators locally. The total for this season´s Guatemala cardamom crop is expected around 24,000 tons compared to 18,000 tons last season. The largest crop size for Guatemala was reached 5 to 6 years ago with 32,000 tons, and the lowest for the past 10 years was 18,000 tons. The slow sale of the cardamom waiting for higher prices plus empty markets at destination are giving a false impression that the cardamom crop in Guatemala is less than expected.
November, 2010
This season´s cardamom is of much better quality, greener and heavier than last season. New plantings are already coming into production. The total production of cardamom in Guatemala since the beginning of the 2010/2011 crop in September until the end of October was 10,000 tons. The reports from the fields and harvest analysis show that Guatemala has harvested 40 percent of the total 2010/2011 crop. This numbers reinforce our calculations of 24,000 to 25,000 tons this season, compared to 17,500 last season. Local prices have reached their maximum and most exporters have stopped buying or are only buying enough to cover their commitments and will stop buying next week. There is one or two exporters that have large quantities in stock (more than 2,000 tons) and some intermediaries and speculators that may hold 1,000 to 2,000 tons more, that want prices to remain high in order to make a profit with their stocks. The exporters that are holding these stocks have a limited processing capacity and it will take them several months to process and export all this cardamom, unless they re-sell it locally, creating the short run illusion that the cardamom produced up to date is less than it really is. Large quantities of cardamom are either already on the way to their destination or sold and in the process of being exported. Cardex alone will have exported by mid-November 2000 tons. Prices are expected to fall once this cardamom reaches its destination and the importers start competing with each other for sales. This price fall can´t be to large because all of these markets are completely empty of stocks and any large fall will face the resistance of a good demand and prices have already fallen substantially from their 25 year record prices of last season.
October, 2010
The cardamom crop season 2010/2011 is expected to start on the second half of September. Some earlier harvest may yield a very light, immature product, but the pressure on the producers to take advantage of the high prices while they last, may force them to try to start early. On the other hand there are no stocks from the previous season in Guatemala, so the exporters and intermediaries will want to bring prices down at the beginning of the season to buy at a cheaper price; therefore they will not be interested on buying the light weight, low density, low quality product of late August early September.
According from the information obtained from The Cardamom Producers Association the size of the 2010/2011 crop is expected to be bigger than the previous season. Cardamom production in Guatemala has been going down consistently for the past 5 seasons due to the farmers having no incentives on replanting as the cardamom revenues (prices x production) were to low compared to other substitute crops like coffee. Two to three seasons ago when cardamom prices went up, cardamom produces started planting again. These new plantings take three years to start producing in full. This season will be the third year for a lot of new plantations, so we can expect the total quantity of cardamom produced in the country to go up substantially. The increase in quantity produced will be more noticeable this season due to the fact that the previous season the production of most of our crops was lower because of the “El Niño” weather disturbance that affected our country between October 2009 and May 2010. The “El Niño” caused drought, or less than normal rains throughout the country during that time. Beginning June 2010 the opposite effect called “La Niña” will bring more rain than normal to the area. Cardamom is not affected by excess rain, on the other hand it favors production. Excess rain could affect the infrastructure, like bridges and roads, and make it more difficult to harvest. On the other hand the prediction is for more hurricanes this season. If one of these hurricanes hits the area, then it could damage the cardamom.