Since mid-February 2022, export prices for Guatemalan cardamom sized between 6-7 mm have ranged between USD12-13/kg FOB local ports, while at the beginning of the harvesting campaign in October 2021, the spice was offered at USD17-18/kg FOB. Such a price drop is caused by a series of solid bearish fundamental factors, affecting the profitability of all the cardamom supply chain participants in Guatemala.
Market players peg the ongoing cardamom harvest in Guatemala at 38,000 mt, 3,000 mt more than in 2020-21. In addition, the carryover stocks of the spice from the previous season totaled 3,000 mt.
The news from South Asia has facilitated the strength of this influential bearish factor. The world's second-largest cardamom producer, India, expects production to reach 28,000 mt in 2021-22, up 6,000 mt YoY.
At the same time, Tridge's representatives in Guatemala, Alejandro Morales, Horacio Cea, and Luis Diaz, mentioned that one of the central issues of the current crop is the low quality of cardamom, with the share of bold-green cardamom much lower than last year. The most substantial Guatemalan cardamom consumers, Saudi Arabia and the UAE prefer the high-quality product. Consequently, the demand for aromatic spice from the Middle East has plummeted significantly. Guatemala's cardamom exports totaled 11,602 mt in October-December 2021, down 20% compared to the same period last year.
Although the data regarding January's and February's shipments are not available yet, Tridge's representatives indicated sluggish demand in the export market. Both Saudi and the UAE possess sufficient stocks, with more cardamom shipments being sent from India. Apart from ample supplies, Middle East traders have opted for cardamom from India in recent months due to logistics reasons. The ongoing lack of containers in North America and a rise in shipment costs by 30% are disrupting on-time delivery from Guatemala. West Asian countries tend to purchase the lion's share of cardamom ahead of Ramadan. This year the holiday begins on April 1, 2022. As it takes 25-32 days for the cargo to travel from Guatemala to Saudi Arabia and the UAE, the ‘window’ for on-time cargo delivery from Guatemala has been narrow in the past two months.
The price situation is expected to change after finishing the second-cut harvesting. Market players are upbeat about the higher quality of the upcoming fresh crop, which will help boost demand and prices for cardamom. Besides, after Ramadan, the main buyers will have to replenish depleting stocks, resuming trading activity.