Cardamom futures surged on MCX on expectation of rising demand at the spot market ahead of festival season in the north Indian states. Further, insufficient supplies on restricted physical arrivals from the major cardamom producing regions too fuelled the uptrend.
Cardamom (Nov) on MCX trading up almost 3% at 1214 because of tight stocks and good demand for festive and marriage seasons. Though arrivals of cardamom have picked up in the auctions centres but fears of weak output checked the prices to fall. Arrivals have started picking up in the producing centres but are lower than last year due to poor production caused by prolonged dry weather in Kerala, the largest producing state. Total arrivals during the season from August 01 up to October 1, 2016 were at 4,141 tonnes and sales were at 3,819 tonnes
India exported 1,150 ton cardamom during Apr-Jun up 25% on year. Small cardamom exports from India are likely to earn as much this fiscal as the last one despite a shortfall in volumes, as shippers are getting good price for the spice. In 2015-16, India had exported a record 5,500 tonnes of small cardamom valued at Rs 450 crore following a bumper crop.
This time, however, the production is expected to be nearly half due to a long drought before monsoon. The considerable drop in rainfall during the month of August-September has negatively impacted the cardamom production. As per estimate, there is a drop of above 30 per cent rainfall during the two months in the Cardamom Hill Reserve (CHR) areas. Export shipments in 2016-17 are expected to drop due to expectations of less availability on higher domestic consumption and higher prices. Domestic consumption is expected to be about 12,000-15,000 tonnes.
Technical Aspect
Technically market is under fresh buying as market has witnessed gain in open interest by 17%. Support at 1130.00---1080.00 and Resistance at 1200
Three consecutive closes+ weekly close above 1200 will take it to 1420—1480 and then to 1600+ mark in days to come.
Any sharp fall will be buying opportunity in Cardamon with stop loss below 1080 on closing basis.
