Kochi:Unseasonal rain has resulted in a fresh cardamom crop, raising expectations that annual production for fiscal 2009 will be 10-15% more than last fiscal’s 9,518 tonnes, according to K.K. Devasia, president of the Cardamom Growers’ Association.
Concerns of a poor crop in October-November because of a weak monsoon have subsided because of December rains in areas of Idukki district in Kerala. This, Devasia said, will translate into a good crop in January and February.
The rain has already resulted in higher arrivals at the weekly auctions, and have had the effect of average prices dropping to Rs450 a kg from Rs650 in October. During the last cardamom season between August 2007 and July 2008, the average price was around Rs320 a kg.
Over the past three weeks, arrival of stocks for the auctions has risen to around 40 tonnes against only 25-30 tonnes last month, Devasia said, adding that there was strong demand for the spice in both domestic and export markets. Another reason for the rise in auction arrivals has been a strict vigil on the state’s borders by the department of sales tax, a move that has helped control smuggling of stock to the neighbouring state of Tamil Nadu to evade tax, he said.
T.T. Jose, managing director of Mas Enterprises Pvt. Ltd, the agency that holds weekly auctions in Idukki, says, with the new crop coming in, farmers had decided to offload their stock, resulting in higher arrivals. However, some of the prices quoted were lower than what growers were willing to sell at, leading some to pull out their lots.
Pulling out stock, though, is detrimental, said Jose, since the government imposes a sales tax of 4% on the entire stock that is even brought to the auction. This, he said, has been a cause of concern for growers and auctioneers since they have to pay even if the stock is withdrawn.
Jose said that while the 4% sales tax on lots auctioned was justifiable, the state government’s move to impose the tax on lots withdrawn at the auctions was not. The auctioneers had approached the government to fix the issue, but the practice is continuing, he said, warning that this could lead to sales outside of the auction. Auctioneers and growers are planning to take up the tax issue with the government again, Jose said.