InvestorQ : Why is there a need to hedge the risk of cardamom in the Indian markets?
Pavithra Prabhakaran made post

Why is there a need to hedge the risk of cardamom in the Indian markets?

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vidhya Laxmi answered.
3 years ago
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Hedging assumes special significance in the case cardamom as the prices tend to be extremely volatile due to just two suppliers of the product viz. India and Guatemala. The Indian crop is still largely dependent on natural factors like rainfall, moisture, soil etc. Guatemala has the reputation for being an unstable polity as was evident from 40 years of civil war. Thus both the key producers of cardamom in the world are vulnerable to creating supply shocks in the cardamom market.

Cardamom futures give an opportunity for the entire value chain including planters, growers, aggregators, wholesalers and financiers to hedge their risk effectively. That possibly explains immense popularity of the Cardamom futures contract!

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