Bird’s Eye View for the Guatemala Green Cardamom Production Crop Year 2013 – 2014
Guatemala Green Cardamom crop production / harvesting began last year from October 2013. Initially Guatemalan Green Cardamom crop production was estimated around 35,000 Metric Tons by local farmers, producers and exporters of Guatemala Cardamom.
October 2013
Havoc of bumper crop was created by Guatemala Green Cardamom exporters from Origin, resulting an extreme downward pressure on Cardamom prices at farm gate levels.
While the prices were sliding, suddenly taxation departments in Guatemala raided several exporters’ offices for various reasons mentioning over invoicing and under invoicing issues.
November 2013
Taxation Raids in November 2013 resulted sudden stoppage of buying from Cardamom exporters at farm gate levels and no offers were seen from Guatemala Cardamom exporters and processors for one month time (November 2013). As exporters were busy managing their accounts with the taxation authorities. No offers for a month time were seen from the origin; resulted in sudden panic buying in major consuming countries and trading hubs (from their local markets). All the stocks from the 2012 – 2013 Crop were exhausted by consuming countries, middle men and the stockists.
December 2013
During December 2013, several protests were held by local Cardamom farmers and producers were held in Guatemala due to excessive low prices at farm gate levels for their produce and no buying activity from the cardamom exporters.
Check this link from Guatemala News Papers:
Guatemala Green Cardamom exporters initiated their buying spree at farm gate levels by middle of December 2013 when the farmers were in extreme need of cash for their Christmas Celebrations. Exporters bought Cardamom from the farmers at throw away prices of USD 18 Cents / Lbs (USD 40 Cents a Kilo) USD400.00 Per Metric Ton and started hoarding them in their warehouses and initiated their export sales to cover up with the required cash flows. Around more 65% of the harvested crop was covered by the exporters at the lowest possible prices.
Check the below link for what Guatemala paid Cardamom farmers – USD40 Cents a KILOGRAMME
http://foxtownmedia.com/blog/2013/10/12/how-are-the-crops/
Happy New Exporter’s Year 2014 – January 2014
Along with the beginning of New Year 2014, a new plan was also carried out by the exporters at Origin to maximize the returns on their hoarded Cardamom underlying in their warehouses as UNSOLD.
Plan known as THRIPS was launched, to maximize the exporter’s return. After managing their cash flows an “Announcement of THRIPS” was carried out by exporters at origin for their UNSOLD materials. Hence, creating an artificial upsurge in the prices of Cardamom – almost 50% from the prevailing offered prices in early December 2013.
P.S: Whereas, THRIPS is a common disease in the Cardamom Plant and usually always persists in the cardamom fields since the day Cardamom was cultivated on Guatemala Lands. It has nothing to do with the crop size.
February 2014
Consumers and traders were also not well covered at low levels anticipating further declines at Origin due to bumper crop expectations. Merchandise shipped during December 2013 and January 2014 were not even arrived at destinations and the prices suddenly jumped up around 50% from the prevailing offered prices in December 2013.
Furthermore prices were increased at origin by the Cardamom exporters in February 2014 due to panic buying from major trading hubs. Extensive buying from Importers and Stockists of Cardamom at destination and trading centers during February 2014 resulted in price spikes at origin. Extreme volatility in Cardamom prices have always encouraged players for over trading at all ends especially consuming countries and trading hubs.
Cardamom THRIPS was the most discussed topic by “THE REAL THRIPS” at GULF FOOD 2014, preparing importers / buyers to pay 100% Premium on the UNSOLD Material underlying in Guatemala Warehouses.
March 2014
During March 2014, after off-loading / en cashing their heavy inventories with hefty profits, renouncement was carried out by Guatemala Cardamom exporters for the crop size of around 32,000 Metric Tons Cardamom harvested during the crop year 2013 – 2014. Mentioning all SOLD and mostly shipped out of Guatemala.
April 2014
Later in April 2014, a new announcement was carried out from Guatemala Cardamom Exporters:
“An expected El Nino in South East Asia during coming Months”
The remaining leftover stocks were sold with 100% premium from the earlier offered prices in December 2013 to the consuming countries and trading hubs.
May 2014
The markets remained firm during the May 2014 till the departure of Guatemalan Cardamom from the shipper’s warehouse till it reaches finally at consignee’s warehouse.
June 2014 – SOLELY SPECULATION
During June 2014, excessive buying from consuming countries, trading hubs and middle man are now resulting in over flow signals of Cardamom from their warehouses. Even middle man at very small scale also bought cardamom (only speculation) from their local trading centers in their respective countries; in the anticipation of further upward movement in prices as predicted by the their local importers / brokers / indentors;
Quoting “No More Cardamom in Guatemala”.
CURRENT SCENARIO: MARKETS REVERSING TREND
Underlying Stocks at Destinations can be observed by the Guatemala Customs Statistics.
Underlying Stocks at Major Trading Hubs including DUBAI, SINGAPORE, HAMBURG AND ROTTERDAM.
DUBAI:
Traders in Dubai are hoarding hefty quantities in their warehouses for Green, Pale Greens and some yellows. Dubai traders were anticipating good demand for the Holy Month of Ramadan but unfortunately no demand emerged from the end consumers.
Whereas, Demand is always there because Consumption is always there.
But the required need for the consumption was completely fulfilled with the stocks lying with the local importers and Stockists in Middle Eastern Countries. Oman, Bahrain, Kuwait, Qatar, Iran, Iraq, Egypt, Sudan, Tunisia, Syria and Afghanistan are the major end buyers in Dubai market. But, unfortunately the local importers at these destinations were also the victims of Guatemala Cardamom exporters and bought huge quantities directly from the Origin.
Thus, resulting slack buying activity / demand at the reselling points.
Even local stockists in Dubai didn’t have the chance for their exit. In fact importers are stuck up with their huge underlying inventories in their warehouses.
(MLG – GRADE) After being held strongly at the levels of AED38.00 / kg – AED40.00 / kg started sliding when the traders realized the reality. Current Offers for the most commonly traded Grade (MLG – Medium Light Green) in Dubai Trading Hub can be found in the range of AED32.50 / kg – AED34.00 / kg (Depending on the needs of the trader).
1 USD = AED 3.673
SINGAPORE:
Bangladesh, Pakistan and Nepal are the end destination for Singaporean traders. The situation in these consuming countries is also almost same like other consuming countries. Local importers / stockists have sufficient ready stocks for their immediate and forthcoming needs till the arrival of new crop. Local prevailing prices at these destinations are also currently under-cost in comparison to the prices being offered from Guatemala.
Current Offers for the Most commonly traded Grade (RS 1) in Singapore Trading Hub can be found in the range of USD8.50 – USD9.00 CNF Bangladesh and Pakistan. Earlier Singaporean traders were quoting USD9.50 – USD10.00 for the RS 1 Quality.
Whereas, at end destination RS1 and similar grades can be acquired at the parity of USD8.00 – USD8.50 (Again Depending on the needs of the local importers).
* Excluding Local Taxes
EUROPE:
European countries are buying Mixed Yellow Qualities (MYQ) mainly for their grinding purposes. Whereas, European Traders were the least victims of Guatemala Cardamom exporters knowing them and their tactics very well. Understanding, that their required grades (MYQs) are always easily available throughout the year.
INDIA:
Check these latest links about the reality of Indian Cardamom markets, their crop and weather updates.
Beside above weakening Indian Rupee is also pressuring export prices for Indian Cardamom.
Monsoon Arrivals in India:
Monsoon Seasons have begun in India with heavy showers observed during last days resulting further pressure on local cardamom prices in India. Cardamom is mostly cultivated in South India KERALA and KARNATKA. Normal Monsoon is being observed in South India.
Further updates can be found on the links mentioned above for the reader’s ready reference.
Above weather report forecasted on 22nd June 2014 states clearly good rainfall in Kerala.
http://www.thehindubusinessline.com/todays-paper/tp-news/marginal-improvement-in-rainfall-over-last-week/article6135178.ece
Above weather report published on 20th June 2014 mentions clearly adequate rainfalls in Kernataka.
Conclusion:
We feel extreme selling pressure would be observed by the stockists and importers with their left over stocks before the harvesting of the forth coming crop. According to the current estimates from several sources the new crop would be at least same as Crop Year 2013 – 2014 i.e: 20,000 Metric Tons or merely less.
EL Nino has not yet started. Monsoon rains have already started with the beginning of June in India with heavy showers observed in major growing areas (South India) during last days. All mentioned clearly above with links.
India is also bracing itself for at least the same size crop as of last year or merely less with carry forward stocks of the last year Indian Cardamom Production / Harvest of year 2013.
Check the below link:
Advice to Buyers: Be Realistic, Don’t Be Optimistic. Buy as per need.
The Author of this Report Mr. James Mathew
Or Email us for daily updates: jamesmathewuk45@gmail.com
Guatemala Cardamom Production 