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E. Demand and Supply Pattern

E. Demand and Supply Pattern

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To identify the appropriate model the data have to be first explored.

Exploring the data: The time series data on cardamom for area, production, and prices were plotted to identify their specific characteristics to select

an appropriate model. The characteristics observed in the time series data

for cardamom can be listed as follows:

1. There is an overall positive trend (i.e., the trend cycle accounted for

nearly 80%).

2. Nonseasonal in nature, that is, not consistently high or low and the

repetitive annual pattern.

3. The time series is nonsatisfactory in both mean and variance.

To forecast the demand and quantity exported Box‐Jenkins model has

been used with log transformed data.

The model

Holt’s (1957) exponential smoothing model uses a smoothed estimate of

the trend as well as the level to produce forecasts. The forecasting equation is:

Y ðmÞ ẳ St ỵ mTt


The current smoothed level is added to the linearly extended current

smoothed trend as the forecast into the indefinite future.

St ẳ aYt ỵ 1 a=ie1 aịịSt1 ỵ Tt1 ị


Tt ẳ gSt St1 ị ỵ 1 gịTt1


where m ẳ forecast lead time, Yt ẳ observed value at time t, St ¼ smoothed

level at end of time t, Tt ¼ smoothed trend at end of time t, g ¼ smoothing

parameter for trend, and a ¼ smoothing parameter for level of series.

Equation (5) shows how the updated value of the smoothed level is

computed as the weighted average of new data (first term) and the best

estimate of the new level based on old data (second term). In much the

same way Eq. (6) combines old and new estimates of the one period change

of the level, thus defining the current linear (local) trend.


Before embarking on the presentation of figures for likely future developments, it needs to be stressed again, that the present forecast is not an accurate

exercise based on systematically collected elaborate data. However, the

forecast based on historic data helps us to understand the overall direction

in which the supply (area and production) will move and price fluctuates.



Forecast is produced with upper and lower confidence limits. The upper

confidence limit is calculated for 97.5% and the lower for 2.5%, that is, the

actual should fall inside the confidence band 95% of the time.


The major markets for Indian cardamom are Saudi Arabia, Kuwait, Jordan,

United Arab Emirates, Qatar, erstwhile USSR, and Western Europe. Other

important importers include West Germany, Pakistan, United Kingdom,

Japan, and Iran. The highest consumption of cardamom takes place in the

Middle East where it is used in the preparation of their traditional drink

‘‘gahwa.’’ According to United Nations Commission on Trade and Development in Agriculture, this market accounts for 80 per cent of the total world

consumption. In Europe and Scandinavian countries, cardamom is used to

flavor bread and pastries. Cardamom is imported in raw and ground forms for

use in food manufacturing and special blends. Among the producing countries,

India consumes the largest quantity of cardamom in the world.

There was a sharp increase in world demand in the late 1970s, which has

remained more or less stagnant during recent years because of declining

purchasing power in the Middle East on account of the slump in the oil

boom. Although the market has shifted to a preference for lower quality

cardamom supplied by Guatemala, the total quantity imported has remained

almost unchanged. With the main deciding factors on consumption, namely

population, age and income, on the increase, demand for cardamom in

countries like Japan has gone up. Unlike in the past, new uses for cardamom

in the food and industrial sectors trigger the accelerated demand in international market. And this is growing almost at the rate of global population

growth. The world demand was estimated at about 9000 t in 1985–1986,

excluding India’s domestic consumption. Keeping this as the base line, the

demand potential is projected on the basis of an average growth of 2% per

annum, which is proportionate to the growth rate of population. Accordingly,

demand for 2000–2001 was estimated at 12,000 t. According to Spices

Board (1990), with an estimated annual per capita consumption of 8.5 kg,

total requirement in India was estimated at 8700 t in 2000 which is projected to

escalate to 10,800 t by 2010 AD. As far as India is concerned, the demand for

cardamom is increasing more than the population growth. Trends in domestic

consumption indicate a sharp increase. As against 1500 t in 1985–1986,

domestic consumption has gone up to more than 6850 t in 1997–1998. If the

current trend had continued, world demand (including India’s) was expected

to touch 15,000 t by the turn of the century. When actual data is not available,

deducting the quantity exported from total production gives an approximate



consumption in the domestic market. The growth equation fitted for the

consumption trend in India is:

In Dt ¼ 6:7110 þ 0:0725T

R2 ¼ 0:815

Accordingly, the estimated growth rate is 7.3% per annum. This growth

rate in demand is much more than the growth rates in production. Under the

circumstances, it is unlikely that India can regain her earlier position as the

world’s largest producer and exporter because an increasing percentage of

production goes for domestic consumption leaving very little for export.

Although there is a shift in the consumption pattern in the Middle East

countries from high‐quality Indian cardamom to cheaper Guatemalan cardamom, there is no reduction in quantity imported. Further, new markets are

emerging for cardamom worldwide. While the household consumption sector

remains intact, rather increasing along with population increase, the recent

developments in the industrial use of cardamom (food and nonfood sectors)

are also expected to push up global demand for the commodity. By 2005 end,

global demand is projected to be 20,000 mt.




Projections on Indian cardamom, for which a model was developed, for

area and production are diagrammatically represented by Figs. 4 and 5.

These figures present both the historic and fitted values along with values

forecast beyond 1997. Both area and production are expected to grow slowly

in the immediate future. The growth in production is expected to be more

pronounced than the growth in area, indicating the improvement in yield per

unit area. As per the cyclical movements discussed earlier, after the peak

achieved in 1995–1996, the 3‐year period of decline is already over, and it is

the turn of increasing trend to reach the next peak in the cycle. As per

forecast value, in the early part of the twenty‐first century (2000–2001) the

expected production level will be between 8000 and 10,000 t; and the area

expansion is expected to touch 90,000 ha during the same period. The

improvement in internal and international price will catalyze the supply

position to jump in the usual fashion discussed earlier.

The forecast and actual price movement from 1990 onwards is given in

Fig. 6. Since the forecast production is insuYcient to create suYcient export

surplus, and the reports of declining production in Guatemala is already

reflected in the form of less supply to the world market by that country

during 1998–1999 crop year, the repercussions will be favorable to Indian

cardamom producers in the form of increased price. The prevailing higher

market price is expected to continue in the near future and there is also a



Figure 4 Trend in area under cardamom in India.

Figure 5 Production trend and forest for cardamom in India.

Figure 6

Trend in domestic price of cardamom in India.



possibility for the price to rise to cross the Rs 1000 kgÀ1 (US$23 approximately)

mark before declining as per the usual cyclical fluctuations. Availability of

less exportable surplus will have direct eVect on the export. The forecast

standard scenario indicates that the trend prevailing during the last 5 years

will continue for the coming 5 years, meaning the export will remain below

the 300 t mark. However, the actual estimated export is expected to lie

between the upper confidence limit of 97.5% and the actual forecast.


Following are the main findings of this chapter.

1. Supply of cardamom is increasing at a fast rate to meet the increasing

world demand. Much of the increased supply is from Guatemala. India,

while consuming more than half of the total world production, contributes

hardly 2% to the world market.

2. While the increase in production during the 1980s was mainly due to the

increase in area, during the 1990s the increase in production is due to

improvement in productivity. However, the yield gap that exists between

the potential productivity level and average achieved level of productivity in the country indicates the possibility of improving yield level


3. On the export front, India has lost most of its traditional markets to

Guatemala because of the price advantage in the case of the latter.

Guatemala derives its price competitiveness mainly from low production

cost and high productivity per unit area.

4. In the changed scenario, Japan is the steady and reliable market for

Indian cardamom. Due to the decline in oil boom and consequent fall

in purchasing power of the Gulf market, its preference has changed from

quality of the Indian cardamom variety to the price advantage of the

Guatemalan cardamom variety.

5. There is a definite pattern of cyclical fluctuation in prices mainly due to

the producers’ response to price by new as well as replanting, which will

start yielding after a certain time lag. Thus, the cyclical fluctuations in

prices have an implicit bearing on the condition of supply through farmers’ response. The forecast future indicates that there will be a steady

increase in supply (production and yield) and the price scenario is

expected to either move up from the present level or remain the same as

of now. The future scenario, however, can drastically change as a result of

innovative product development, diversification of some entirely new application if discovered for cardamom or its products. Imaginative product

development programes have to be initiated to boost consumption pattern.



Attractive formulations backed up by catchy advertisements can do

wonders in this field.



Spices and herbs used in food seasoning often have a mild, broad spectrum of antimicrobial activity. Many crude drugs are used medicinally

because of their volatile oil content or other chemical constituents which

possess biological activities. Cardamom is very popular as a spice and food

additive because of its delicious flavor. The constituents of its volatile oil are

responsible for the flavor and fragrance. It also possesses carminative,

stomachic, and antimicrobial actions. These biological activities bring

about many advantages to the seasoned and prepared foods. Apart from

this, cardamom finds application in the indigenous systems of medicine.


In the ancient Indian systems of medicine Ayurveda and Siddha, cardamom finds application as a component of several therapeutic formulations.

Charakasamhita, the ancient Indian medical text, describes the use of cardamom as an antiodote to food poisoning. This forms a constituent of Brahmi

rasayana which is used as a treatment for inflammations. Cardamom is also

used as a component of many balms, ointments, and therapeutic oils used to

treat cramps, rheumatic pain, inflammations, and so on. In Ayurvedic texts,

the properties of cardamom seeds are described as aromatic, acrid, sweet,

cooling, stimulant, carminative, diuretic, cardiotonic, and expectorant. Cardamom is used as an ingredient in preparations used for the treatment of

asthma, bronchitis, hemorrhoids, renal and vesicle calculi, cardiac disorders,

anorexia, dyspepsia, gastropathy, debility, and vitiated conditions of vata

(arithmetic pain in knees and joints). But, no pharmacological investigations

were carried out to validate the above properties. An aqueous extract of

seeds is given to nursing mothers to treat ringworm infection of the children

(Aloskar et al., 1992). Roasted seeds are boiled with betel leaves and the

extract is used to treat indigestion and worm infection. However, such uses

of cardamom in the indigenous system of medicine have not been evaluated





Both the cardamom seeds and their oil have carminative action. Tincture

cardamom is used in many medicinal preparations, which are used as carminative, stomachic, and to relieve colic pain (British Pharmacopoeia, 1993). Tincture cardamom and compound tincture of cardamom are included as oYcial

preparations in the British Pharmaceutical Codex 1963, British Pharmacopoeia

1993 and in the Chinese, Hungarian, and Japanese Pharmacopoeia as well.

Martindale (1996) in The Extra Pharmacopoeia also describes preparations of

cardamom fruits, cardamom oil, and cineole, the major constituent of cardamom oil, as carminative and flavoring agent. Cineole has been used as a

counterirritant in ointments and in dentrifices. It has also been used in nasal

preparations. Jain et al. (1994) have shown that cardamom essential oil containing preparations, such as Brahmi rasayana, suppresses castor oil induced

diarrhea in experimental rats. This points to its possible beneficial use in

humans as well.


The terpenoid constituents are responsible for the antifungal and antibacterial eVects. Mishra and Dubey (1990) and Mishra et al. (1991) studied

the eVect of cardamom on Aspergillus flavus, the fungus which produces the

deadly aflatoxin B1. Mycostatic activity was observed at 400 ppm level. This

was found to be as potent as synthetic antifungals commonly used (Hirasa

and Takemasa, 1998). The flavor components also showed antibacterial

eVects against several food‐borne microorganisms (Kubo et al., 1991).

Another study proved that the growth of Morgenella morganii was moderately inhibited by the application of cardamom oil or powder (Shakila et al.,

1996). This organism is a potent histamine‐producing bacterium growing

on stored fish. The minimum inhibitory concentration (MIC percent) of

cardamom extracts for bacteria and fungi in comparison with a few other

common spices are give n the following table (Tables XLIX and L).


Banerjee et al. (1994) have found that cardamom oil enhances glutathione

transferase enzyme and acid‐soluble sulfhydril activities. These enzymes

mediate the oxidation and detoxification of xenobiotics. Cardamom oil

was fed to gavage at 10 ml dayÀ1 for 14 days and hepatic microsomal

enzymes were measured. GST and acid‐soluble sulfhydril were found to be

significantly elevated (at a high statistical confidence limit of p ¼ 0.001).

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E. Demand and Supply Pattern

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