MADAGASCAR and CLOVE UPDATE 7th NOVEMBER, 2024
MADAGASCAR and CLOVE UPDATE 7th NOVEMBER, 2024
MANANARA, Madagascar, 7th November, 2024:- Clove is on fire ! No doubt. Madagascar local price is really highly bullish as of now. This year was a history in Madagascar – that harvest across all regions of Madagascar started at the same time; opened at same price which was much higher than last year; and now, harvest 75%--80% finished through out Madagascar ! This is history ! Never happens like this in Madagascar.
Normally, in Madagascar, the usual pattern used to be – South Madagascar [regions like Vangaindrano, Farafangana, Manakkara, Mahanoro etc] clove harvest starting in August; Mid North Madagascar [locations like Fenerive, Vavataeina, Mahmpoo, Sonaeranou etc.] clove harvest starting by mid September; and North Madagascar [Regions like Manananara, Marenchotre, Ambanja etc] harvest starting in November and extending upto February-March. However, this season, full of Madagascar harvest started by 2nd half of August and September, and now by November almost 75%--80% harvest finished and stock at home of either farmers or stockists !! And holding capacity of Madagascar farmers and stockists has increased, and no one want to sell stock at lower price level ! They demand higher price or they do not want to sell; and they propose to hold back the stock expecting higher price. !
The expectation of farmers and stockists is worth for them; as the local market opened in September at Ariary 20,000 per kg, and now in November, the local price has reached 27000 to 29000; and at some corners even at 30,000 for raw material ! A price jump of almost 40—50% in two months time !!
EXPORT OFFERS:
Seriously no exporter started public offer. Some exporters are giving offers to their regular customers privately. All exporters are also waiting to see the price movement. Some speculators and forward sellers had offered in September and October USD 7300 to 7500 for December shipment ; But all that would end up in default only – no doubt. In September and in October, I wrote in my blog, all such forward offers are only to default, and with mal intention. In September itself, I had indicated, market looks very firm.
As of today, 7th November, my view is that a genuine offer cannot be below USD 8400 ! Last 3 weeks, weekly increase in clove price is almost USD 200 per Mt ! And with that kind of price escalation, I do not feel any exporter would be able to give lower price offer for business.
My advice to all buyers and importers also, please do not look for lower price only. You all have seen from Indonesia, how much default happened in last 3 months ! All lower price contracts [price at USD 6000 to 6500 from Indonesia] 90% defaulted; and even contracts at USD 6800-7300 were also shipped with forest clove and old mix ! When looking for only lower price, this is the problem. And Madagascar is “”famous”” for such lower priced offer and default and sellers vanishing after taking advance ! Hence respected importers and buyers, please be careful. Do not look for only lower price.
STOCK POSITION:
I used to say continuously, exact crop estimation is IMPOSSIBLE, and no one is doing or no one can do. S In Africa, Govt has no successful mechanism to conduct survey of crop; and international agencies from UN also depend on certain private estimates only. And after harvest, no one is bringing out their crop immediately; all goes to stock and wait for higher price. While moving through different villages, what we are seeing on the ground reality is that, enough stock available. But not selling. Waiting to fetch higher price ! No shortage of stock; shortage is only because of stock not coming to market for sale – waiting for higher price !
MADAGASCAR OLD STOCK: Madagascar never goes without carry over stock. I used to write this in my blogs often. Madagascar still have more than 4000 Mt of last year carry over stock. These carry over stock is well dried to 10% moisture; and some are good bright brown colour; and some are black or black mixed.
INTERNATIONAL STOCK POSITION: When we talk about Clove international market, mainly we need to speak about India and Indonesia only; as these are the two destinations consuming Clove to the maximum. And for Indonesia, import is secondary. Indonesia consumers mainly domestic production. So in short, we need to talk about Indian situation only – as India is the single largest importer of Clove from any origin - from Indonesia, Africa, Sri Lanka.
Indian stock is fully dried out. And therefore, India needs to replenish stock immediately. Demand is increasing. This would also add up for bullish trend in Clove. Yes, really for the time being, Clove price is on fire !
Wishing you all safe trading !
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