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Hrithik wrangle may scar India's cardamom bottom line 

M Sarita Varma  
Thiruvananthapuram: Consignments of Guatemala cardamom coming to India through the Nepal route may abruptly end the Indian cardamom farmer's unusual picnic this year. Kerala traders, who expected the price high to stretch to last year's Rs 700 per kilo, were taken aback by reports of cheaper lots awaited by Mumbai and Delhi buyers from the Indo-Nepal border.

Unlike the 1998 spurt of grey trade in cardamom, this time the border-crossing of Guatemala cardamom has ``official blessings'' also, trading sources told The Financial Expresse checkpost men have reportedly been instructed to turn a blind eye to such activities, considering the recent fragile ties between India and Nepal. The diplomatic immunity to smuggling, in the wake of the alleged Hrithik Roshan remark, is likely to put a lid on the price high enjoyed by cardamom farmers this year.

The AG-EB variety, offered by the Kerala traders for Rs 635 per kilo, is arriving in North Indian markets from Nepal, reportedly quoting Rs 545 per kilo. The latter price is what the Kerala traders sell the third quality variety (AG-S) for. Kerala traders were also sceptic of the quality claims of the Guatemalan product. It is the pan masala trade in North India that is said to be subscribing handsomely to the Guatemala cardamom.

Meanwhile, a section of the cardamom business is of the opinion that December's price-spiralling was something of a windfall. An artificial price high can not sustain the cardamom trade, according to Mr NT Zacharia, president, Kerala Cardamom Growers' Association. ``Unlike rice or wheat, cardamom is highly price-elastic. Stretching the price beyond the market-equilibrium was unrealistic. Even Rs 400 per kilo is considered fairly good price realisation.''

Earlier this month there had been song and cheer in Kerala cardomom plantations when exporters to Gulf countries, pulled out of their purchase contracts with Guatemala, and sought supplies from India. The Guatemala cardamom production, at 13,000 tonne, had been much better than its mediocre harvest of last year. However, the Latin American country took over a month to get the crop processed, missing even the Ramzan season supply deadline to West Asian countries.

Cardamom prices in auction centres in south India had soared as a result of the unexpected Gulf demand. Saudi Arabia alone had claimed 700 tonne in early December. Overnight, prices in Kumali auctions had gone up by Rs 50 per kilo.

Since the international prices had been reigning high last fortnight, a covert move from Guatemala traders was not immediately expected. On the contrary, in anticipation of further price rise, small-scale stockists and farmers are estimated to have held back about 2,000 tonne from auction centres.

But for the easing of guard in the Indo-Nepal borders, the price-high would have stayed till mid-January, said Mr V Antony, a leading planter in Idukky district, which tops in cardamom production. The delay in cardamom processing last month, had cramped the style of Guatemala trade a good deal.

Whether Hrithik Roshan made an anti-Nepal remark or not, it is the Indian cardamom business that has been punished, he added.

During the 1997-1998 cardomom glut, Guatemala had reportedly flushed about 3,000 tonne of the crop to India via Nepal. Last year, there was not much of a threat to the domestic market because of a partial crop failure in the Latin American country. This year since the harvest was not as good as the 1997-98's 17,000 tonne, the impact is likely to be less damaging. Guatemala can afford to manipulate the international price since their cost of production is low compared to that of India. While there is a heavy input burden in growing cardamom in India, it flourishes in large areas of virgin land in Guatemala without any manures or pesticides. The country has no option but to infringe into India's enormous consumption-base since the demand for cardamom is marginal in its own domestic market.

Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.

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