Guatemala Green Cardamom Production And Consumption December 2016 – January 2017

GUATEMALA CARDAMOM CROP PRODUCTION 2016 - 2017
CARDAMOM MARKET FOR OCTOBER - NOVEMBER - DECEMBER 2016
OUTLOOK FOR JANUARY - FEBRUARY 2017

GUATEMALA CARDAMOM CROP PRODUCTION 2016 – 2017
Current Crop Production for Year 2016 - 2017: 28,000 - 30,000 Metric Tons
Carry Forward Crop for the Year 2015 - 2016: 4,000 - 6,000 Metric Tons
Gross Availability Crop for Year 2016 - 2017: 32,000 - 36,000 Metric Tons
 

CARDAMOM MARKET SCENARIO FOR OCTOBER - NOVEMBER – DECEMBER 2016 

OCTOBER 2016
ECONOMICALLY CRUCIAL EVENTS:

A) VAT related issues are raised in Guatemala.
This has been observed every year since the last 4 years at the start of every cardamom crop season. As consequence, crop prices increase dramatically.

B) Transportation Strikes.
Trucking companies have been observed to conduct local transport strikes which consequently results to delay in crop delivery; subsequently, being a factor in crop price increase.

C) Market intervention by local middlemen and traders.
Local Traders and Middle Men entered purely for speculation.

D) Rumors. 

There was a widespread rumor about a critical decrease of available crops for the upcoming year. The rumor suggested a decrease of 12,000 – 18,000 MT from the last year crop 2015 - 2016 of around 32,000 - 35,000 MT resulting to a diminished gross availability of 20,000 – 22,000 MT availability of 2016 - 2017 crops available in the market.

NOVEMBER 2016
EXPORT SALES ACHIEVES TARGET RATE:

A) Crop Shortage Hype.
Large exportation offers started coming in after the economically-induced hype among the consuming countries. The hype created has been observed for the past 5 years despite the absence of an actual economic and agricultural report from the statistical Government authorities.

B) Increased Export Sales Prices
Sales Prices were increased by as much as 60-120% for the various grades of Cardamom, usually observed since last 5 years as soon as the running harvesting season is coming to an end eventually comes down at the bottom (observed in June / July / Aug 2016 means before the arrival of new crops. If as always rumored about the crop size as how come the Guatemala Cardamom exporters lower the prices every year’s current crop is coming to an end.

C) Last Year’s Carry Over Crops Sold at Higher Prices
The trade at lower price levels started during the earlier part of the third economic quarter (June-August) when prices were at rock bottom. Guatemala Cardamom Exporters managed to keep the prices at higher levels during April / May 2016 due to arrival of Ramadan and Hajj Seasons so that Saudi Arabia and other Middle Eastern countries can pay them premium. Once Middle Eastern countries buying spree was over in May 2016, they started decreasing the prices slowly and gradually from June till Mid September after receiving all their receivables for the goods shipped during April / May 2016. After creating another hype of shortage of forthcoming crop 2016 - 2017 Guatemala Cardamom Exporters successfully sold all their carryover stocks of crop 2015 - 2016 at higher prices in September / October 2016.

Qualities...............................Sold In July / Aug/ Sep.........Sold In Oct / Nov/ Dec

Jumbo Greens.........................USD 10.00..............................USD 16.00

Medium Greens.......................USD 9.00................................USD 14.00

Small Greens..........................USD 8.00................................USD 13.00

Jumbo Pale Greens.................USD 7.00................................USD 13.00

Medium Pale Greens...............USD 6.00................................USD 12.00

Small Medium Greens.............USD 4.50................................USD 10.00

Jumbo Yellow..........................USD 6.00................................USD 11.50

Medium Yellow........................USD 5.00................................USD 9.50

Mixed Yellow Quality...............USD 4.50................................USD 8.50 

While the price at which they were sold in Jun / Jul / Aug / Sep indicate a 60-120% increase from the prices at which they were originally bought.

D) Trapped Traders. 

During the hype, the majority of the local middlemen and international traders from consuming countries and trading hubs respectively; were forced to pay higher prices for last year’s crops without knowing the predicament they are in. 

E) Reluctance from Middle East Countries. 

Major consuming countries: Saudi Arabia and the rest of Middle East showed reluctance in renewing their import partnership with Guatemala Cardamom Exporters Cartel after the issue reached overseas. 

F) South East Largest Economy Unrest due to Demonetization announced in India.

South East Asia’s largest economy India suffered huge cash crunch as Indian local traders were not exceptional. Indian traders experienced a stuck up on the market due to this disturbance in cash flow. Furthermore, all the major trading centers in Mumbai, Delhi, and Kerala are facing extreme financial issues due to cash withdrawal limitations on cash transactions. 

G) Bangladesh, Nepal and Bhutan local trade affected due to Indian Currency Demonetization.

Bangladesh, Nepal, and Bhutan are also facing several financial difficulties because of this demonetization. It is still uncertain whether they would be able to get back the money they spent on buying Guatemalan Cardamom crops. They will have to wait for the governing body’s decision after the demonetization issues in India are resolved.

Guatemalan Cardamom Exporters’ Cartel Scheme 

The Guatemalan Cardamom Exporters bought crops when they are at their lowest prices during the third economic quarter of last year. They later sold these crops at higher prices – 60-120% higher from the price they originally bought the crops – during the last quarter of last year 2016. All these were achieved as an inevitable consequence of the aforementioned events. On an economic perspective, this practice shows extreme unprofessionalism creating havoc in the esteemed partnership of the producing and consuming countries.

Jumbo Pale Green - Crops were traded earlier in August at USD8.00 – 8.50 per kg and were sold in October - November 2016 at USD13.00 - 14.00 per kg; entailing at the least, a 70% increment in price. 

Large Pale Green - Crops were traded earlier in August at USD6.00 – 6.50 per kg and were sold in October - November 2016 at USD11.00 - 13.00 per kg; entailing at the least, a 90% increment in price. 

Medium Pale Green - Crops were traded earlier in August at USD5.00 – 5.50 per kg and were sold in October - November 2016 at USD9.50 - 10.50 per kg; entailing at the least, a 90% increment in price. 

Mixed Quality - Crops were traded earlier in August at USD4.00 – 5.00 per kg and were sold in October - November 2016 at USD9.00 - 10.00 per kg; entailing at the least, a 100% increment in price. 

Export Offers for Crop year 2016 – 2017 were withheld till 7^th Nov 2016 and suddenly resumed 11^th November 2016. 

Trade offers were withheld till 7th of November but suddenly resumed on 11th of November 2016.

Major Reasons why Exporters:

On 8^th Nov 2016 Demonetisation was announced of the South East Asia’s Largest Economy India.

Surprise win of Donald Trump on 9^th Nov 2016.

Which resulted in immediate devaluation and tumbling of major South American currencies and consuming market currencies such as Egypt, Libya, Iraq, Iran, Lebanon, Tunisia, Syria, Bangladesh, Pakistan and India.

Guatemala Cardamom exporters immediately started to offer huge quantities as they immediately and cunningly realized the aftermath of the demonetization and devaluation of world major currencies including consuming countries devaluation against USD. These transactions were conducted with large international trading companies based in Dubai, Singapore, Netherlands, and London. After fulfilling major consumers’ demand by the end of November, Cardamom Exporters began to sold in bulk quantities directly to the small and medium-scale importers. 

Check the below links for the authenticity of the above factors: 

1- Surprise Win Of Donald Trump Creates Pressure In Local Currencies, As A Consequence Of US Dollar Devaluation. Egypt / Libya / Iraq / Iran / Lebanon / Tunisia / Syria.

http://www.wsj.com/…/egypt-free-floats-its-currency-devalui…
https://www.theguardian.com/…/libya-fragile-government-face…
https://www.bloomberg.com/…/another-oil-producer-is-under-p…
http://blogs.wsj.com/…/the-daily-shot-make-sense-of-friday…/ 

2- Recession In The Middle East And Saudi Arabia Due To Declining Oil Prices. 

http://www.bbc.com/news/world-middle-east-37482690 

http://www.forbes.com/…/fresh-round-of-spending-cuts-spel…/… 

3- Demonetization Of Indian Currencies. 

http://www.japantimes.co.jp/…/economic-political-risks-in…/… 

4- Bangladesh Spice Businessmen In A Fix; Unable To Get Their Payables. 

http://indiatoday.intoday.in/…/ban-on-rs-500-…/1/810317.htm 

5- Demonetization Tumbles Spice Traders In Bhutan. 

http://timesofindia.indiatimes.com/business/india-business/demonetisation-impacts-indias-border-trade-with-bhutan/articleshow/55718532.cms

DECEMBER 2016
GUATEMALAN CARDAMOM EXPORTERS IN A FIX:

The Guatemalan Cardamom Exporters have successfully offloaded their huge stocks in November 2016 at high levels while creating huge hype and panic at the extreme prices:

In order to support their selling prices further, they have also increased their buying prices at farm gate levels. This entails that farmers should be holding their cargoes while the Guatemalan Cardamom Exporters receive their advance and balance payments against their cargoes and shipments respectively – the former, having been sold at higher prices.

Consequently, they are reluctant to reduce the prices. Currently they are waiting for the Gulf Food 2017 where they would be again offering higher prices to mentioning new rumors as also observed during last 5 years.

According to confirmed sources, some of the major exporters started selling surreptitiously to potential and financially strong international buyers based in Europe, Singapore, and the Middle East. This is accomplished with favorable prepayment terms for them to be able to manage their cash flows while avoiding price disclosure to their regular small buyers. Furthermore, according to the same sources, the cash incentive provided by Guatemala Cardamom Exporters to their illicit buyers is USD2.00 Per Kg from the prevailing prices.

Furthermore, major Cardamom Exporters are now suffering from financial difficulties after their USD100 Million worth of stocks are blocked in their local warehouses. The organization behind the Guatemalan exporters (famously known as Cardamom Exporters Cartel) are now looking for ways to liquidate their stocks by increasing their farm gate prices in hopes that their local middlemen would serve as buffers for the debilitating effects at farm gate levels at exporters’ warehouse which would be further resulting disruption in Guatemalan Cardamom exporters cash flow.

In view of this financial predicament, some medium-scale Cardamom exporters are now processing raw Cardamoms on a fixed cost basis for their buyers; without necessarily having to take risks on their parts. This means that, comparatively, medium-scale Cardamom Exporters have prices that are currently at least 10% less than the prices of the large-scale Cardamom Exporters.

The Cardamom Status Quo

2 Major Cardamom Exporters are holding approximately around 8,000 Metric Tons of the new 2016 - 2017 crops (4,000 Tons of Green Qualities, 3,000 Tons of Pale Greens and 1,000 Tons Yellow Qualities). The crops are now held at the farm gate levels or stored in warehouses waiting for export. The crops were allegedly bought at an average of USD7.00 Per Kg – USD8.00 Per Kg (sorting, packing, and grading costs included). Most of the Pale Green Qualities have been shipped to South East Asia and the Middle Eastern aggressive buyers. Yellow Qualities and MYQ have been shipped to Europe and the USA at premium prices. As of now, they have shipped around 5,000 MT since November – December 2016; of which, cargoes are expected to arrive sometime in January 2017 in their respective consuming markets. Right now, the Guatemalan Cardamom Exporters are holding the majority of Green Qualities with the lowest average for price levels as they have successfully sold Pale Greens and Yellow Qualities at higher a price that decreases the average price for the Green Crops. This potentially increases the exporters’ income on the Greens. In other words, with the low-price average for Greens, and the exporters being the ones holding the largest Cardamom stocks, they are planning to manipulate the entire Cardamom market in Gulf Food 2017 while trapping new entrants and mainly Saudi Arabia and Middle Eastern consumers. 

On the other hand, even Saudi Arabia, Dubai, Egypt, Jordan, Kuwait, Iraq, Pakistan, Bangladesh, Nepal and other small consuming markets are also holding huge stocks from last year ‘s crops (2015 – 2016), those cargoes are still being traded in the local market. Currently, all the consuming markets are under disparity of USD2.00 per Kg from the current offered.

Consuming local markets are facing huge payment / cash crises due to economic recessions

Market changing dynamics demoralizing the local traders speculation 

Other factors which have demoralized the local traders speculation practices in the local consuming markets are mainly changing market dynamics and consumer behaviors’ such as large scale consumers i.e.; Coffee and Grinding roasting companies, Spices Grinding Companies, Super Market Importers, Large Scale Bakers and Confectioneries based in consuming countries USA, Europe, Middle East and South East Asia are buying directly from the Guatemala Cardamom Exporters, hence demoralizing the speculation role and incentives for local trader, stockiest and middle men in their consuming markets. As major share of Cardamom consumption is being supplied directly by Guatemala Cardamom Exporters to large scale buyers and consumers.

For other Middle Eastern countries, we have also provided our views in the November 2016 issues. Here are the links for reference:

http://www.forbes.com/sites/dominicdudley/2016/09/06/fresh-round-of-spending-cuts-spell-trouble-for-saudi-economy/#264d037c60e9

https://www.bloomberg.com/news/articles/2016-09-26/saudi-arabia-cancels-bonus-payment-for-state-employees-spa-says

Cardamom Projection: Harvest Projections till March 2017

The first harvest began in October 2016 which lasted until the end of December 2016. The harvested crops during first harvest are approximately around 13,000 Tons. The second harvest will begin in January 2017 and will last until the last day of the second month of the year – February 2017. The second harvest is expected to yield a minimum 10,000 Metric Tons. In lieu of this, it is believed that the Cardamom Exporters would not be able to sustain the local selling pressure in Guatemala due to their exhausting cash flows and bank credit lines, demonetization in India, devaluation of consuming countries and most of all; the awareness of Guatemala Cardamom Exporters tactics observed by consumers in importing countries since last 5 years, which have subsequently caused a lot of financial difficulties amongst the affected buyers and their continuous financial losses during 5 years. The third harvest will begin in March 2017 and will last until the end of April 2017 which is expected to yield at the least, a minimum of 7,000 MT. 

The scheme of the Guatemalan Cardamom Exporters has been observed since the last 5 years. Consuming countries have been advised to play short term without trusting them. Even we have warned them during 2013 - 2014 - 2015 in our previous posts on face book and other platforms. The Cartel established was not economically stable; thus, the downfalls of these exporters have already been foreseen by analysts in the coming year ahead.

INDIA CARDAMOM CROP PRODUCTION / EXPORTS / PLANTATION / CONSUMPTION SURVEY FOR YEAR 2015 – 2016 – 2017 

The company has completed an extensive survey on the plantations of the ‘Cardamom Growing Zones’ during the last fortnight. A detailed discussion with experts who have conducted similar surveys in the past year was also conducted.

The gist of the survey was that the current crop yield significantly declined by at least 20-25%. The plants that have been particularly affected due to high temperatures are the ones that incurred more losses. The Cardamom growing belt has also reported lower rainfall than its corresponding period last year by 30%. Approximately 28,000 MT of Cardamom production was achieved from last year crop during 2015 - 2016. During 2015 – 2016 India produced approximately 28,000 Metric Tons of Cardamom and this year 2016 – 2017, the prospected yield is 20,000 – 21,000 MT; with the addition of the assumed carry forward stocks of around 4,000 MT, the total availability of Indian Cardamom would be approximately 24,000 – 25,000 MT. Whereas, the exports of Indian Cardamom from 2015- 2016 are estimated around 5,800 MT and the local consumption is estimated roughly around 14,000 - 15,000 MT. Approximately 2,000 -3,000 MT is imported legally into India and around the same quantity is smuggled into India through neighbouring countries' land routes from Nepal and Bangladesh, which is further mixed up with the Indian Cardamom and exported to Middle Eastern countries in premium as India Origin Cardamom. This year in 2017 India would achieve an export target sales of approximately around 4,000 MT due to low consumer demands.

India had huge carry forward stocks from the year 2015 - 2016 which covered the demands right until the month of September; despite the drought, no crop scarcity was recorded. Companies that managed to stock crops released them at good price margins by the end of the season last year. Though some areas reported a crop damage of 25% - 30% during 2016, the total area under cultivation itself has increased significantly. This is also reflected in the productions from new areas.

On the demand side, Exports continued to remain sluggish, faced with recessionary signals in the key markets of Saudi Arabia and other Middle Eastern countries. It has prospected that exports may struggle to reach 4,000 MT this year as compared to nearly 5,800 MT exported in the previous year. The domestic demand from the retail portion of the market also faces a diminution after the rapid increase in prices. The major festival season is now over and retailers have also begun cooling down from setting high prices. Last year’s crop is projected to cover production waiting for nearly three months. After researching thoroughly and analysis; availability of Cardamom in India would be as follows:

4,000 MT Carry Over of 2015 - 2016 Crop
21,000 MT Indian Cardamom Crop of 2016 – 2017
2,000 MT legal imports from Guatemala
2,000 MT illegal smuggled Cardamom from Nepal and Bangladesh.
Total Availability would be around 29,000 MT for year 2017
Expected exports during 2017 would be around 4,000 MT
Local consumption around MAXIMUM 15,000 - 16,000 MT

Estimated Consumption Practically seems difficult because these high prevailing prices and economic crises in India due to demonetization.

Still sufficient availability is foreseen without feeling any scarcity for the time being. While new crop 2018 estimates would also start coming in from India during June 2017 and from Guatemala during Aug / Sep 2017.

Hence, we feel that the rapid increase in prices during November 2016 or so by nearly $3 per kilo is speculative and not sustainable as it is neither backed by domestic nor export demand. This can be observed by the declining price trend in Indian Auction Centers in South India. Now Indian Cardamom prices have also started coming down since the later part of December 2016 in the auction centers which can be observed from the local auction prices. Arrivals have started gaining momentum in auction centers.

Below the price chart for several auction centers in Kerala – India from October 2016 up to 26th December 2016, while compiling of this report on 26^th December 2016.

Auctioneer: Cardamom Growers Federation

Auction Dates: Oct-07-2016 Up To Dec-23-2016

 
Auctioneer: Idukki Dist. Cardamom Producer Company Ltd
Auction Dates: Oct-17-2016 Up To Dec-26-2016

Auctioneer: MAS Enterprises, Vandanmettu
Auction Dates: Oct-08-2016 Up To Dec-24-2016

Auctioneer: State Trading Corporation
Auction Dates: Oct-07-2016 Up To Dec-23-2016

Auctioneer: Cardamom Planters’ Association, Santhanpara
Auction Dates: Oct-17-2016 Up To Dec-05-2016

Auctioneer: Green House Cardamom Mktg. India Pvt Ltd
Auction Dates: Oct-08-2016 Up To Dec-10-2016

If You Need Further Authenticity Of The Above Mentioned Facts, Kindly Review Our Previous Posts Mentioned Below For Years 2013 – 2014 -2015.

Same Cunning Tricks And Tactics Were There In 2013 - 2014 - 2015

Eventually Markets Collapsed When Guatemala Cardamom Exporters Hoarded Stocks Were Sold At Premiums.

Check Below Link Posted On 22-June-2014: 

http://guatemalacardamom.blogspot.com/2014/06/guatemala-green-cardamom-production.html 

The Author of this Report: Mr. James Mathew
Email us for daily updates: jamesmathewuk45@gmail.com
Whatsapp: +46765196830
Facebook: https://www.facebook.com/Guatemala-Cardamom-1437122399893909/