Tamatave, Madagascar, 18 June, 2023:-
Global Clove market is complexed with fundamental and technical and speculative factors. Present market position is FIRM , but future directions cannot be derived from the present firmness ! Because, new season in three countries are very near, and one major country is not much far. There is already market reports saying, 2023 Season Crop size is small, and there would be shortage of Clove, and DEMAND would exceed SUPPLY EQUATIONS and thereby price can further firm up. Crop size is reported to be LESS based on reports from Comoros that Comor crop is already delayed, and instead of July, it will come only by mid August, and crop size is lesser by almost 500 Mt compared to previous years. Traders from Moroni, Mutsamudu and Anjouan says, 2023 crop would be around 2000 ++ only compared to normal 2500 to 3000 Mt.
Indonesia already reported its crop size down by almost 40% and they expect only around 70,000 Mt this year from all islands. 2022 season also Indonesian crop was less, and the cigarette industry already imported huge quantity from Africa, which is still continuing. And reports from Indonesia says, the cigarette industry would continue import in 2023 season also. Indonesian cigarette industries average yearly demand of clove is estimated at 120,000 Mt and their production in 2022 was only 80,000 Mt and in 2023 estimated at 70,000 Mt. The shortage in Indonesia alone is huge. Coupled with this shortage reported from Comoros and Zanzibar.
Zanzibar crop is estimated much lower than their usual quantity because of UNKNOWN disease affected to the Clove plants. Zanzibar Govt investigation and research is in progress to identify and resolve the disease. Zanzibar Minister for Trade and Commerce said, after his visit to the disease affected area, that almost 500,000 clove trees are affected, and this can reduce the crop size considerably.
How is the future of CLOVE industry ? CLOVE demand ? In spite of the crop shortage, demand for Clove is on the increase, and every year it is growing. The increased use of clove in culinery usages to spice up savory dishes, desserts, and drinks and also its use in , manufacturing toothpaste, soaps, cosmetics, perfumes, and cigarettes - all are increasing year by year. Essential oil industry is also using clove and its various parts in large quantities because of huge deman+d of clove essential oil and oleoresin. These are the main reason keeping Clove demand very high.
Recently in the last one month period, Clove price in local market of India [wholesale market] increased almost INR 200 per Kg which is considerably abnormal increase even when India has enough carry over stock in the market. This increase was just because of local demand.
Coupled with this, we must also look at changes in the origin countries. In Madagascar, local market in local currency Ariary per kg, increased from average Ariary 33000 per kg to 40,000 ariary a kg in a span of one month !! International offers increased from USD 8300 per Mt to USD 9500 per Mt during the same one month span. Indonesia followed this trend. Now it is off season in Madagascar, and other African origins. Madagascar season would start [main season] only in November, even though South Madagascar Clove might start in September. Quantity estimates are still awaited, and we have to wait to September to know Madagascar crop size. However, based on climatic situation and growth pattern, no reason to expect any shortage from Madagascar.
Let us wait July for further updates from all origins.
GIRISH KUMAR K S
Gently offered by Ms Sandra Braz from Braco Trade Ltda
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