INTERNATIONAL cloves prices have held mostly firm in recent weeks as farmers at origin remain reluctant to lower their pricing ambitions and exporters appear confident of maintaining demand at high levels.
Indonesian cloves prices had moved particularly high, being above $10,000 a tonne cif.
“Our agent in Surabaya says that now that the crop is almost done, stocks are in the hand of farmers and they are not ready to give cloves at low prices especially knowing that kretek manufacturers are on the market looking forward to receiving what they have ordered already,” he said.
Mr Nee added that contrary to buyers’ hopes for lower prices, Indonesian farmers were speculating and pushing traders to pay a higher price on a daily basis. “They all know that the crop is sold to industries already and also that the next crop could be much lower than this one due to very dry weather in Indonesia when cloves (stems) should be starting to come on trees,” he remarked.
Hence, Mr Nee said he was not overly confident of the possibility for a price decrease.
Gregoire Courme, head of the spice trade department at Herbs International Service, commented: “The prices are still high, because the Indonesian market is firmer after the Ramadan. The current prices are between $10,500 to $11,000 a tonne fob.”
Mr Courme added that some local traders had sold short at levels of around $8,500 a tonne to cigarette firms before Ramadan, anticipating a fall during the festival. “Unfortunately the farmers did not deliver the goods and the cigarette manufacturers put the pressure on the sellers to get their contracts. So the local market is high now and the traders are running the market to find cloves. Moreover, the latest figures show that the crop is from 60,000 to 70,000 tonnes and not above 80,000 tonnes as initially predicted,” he said.
Mr Nee explained that in Comoros a lot of buyers had been visiting from Pakistan, the Middle East and China. These individuals would purchase “one or two boxes” of cloves and then leave the country, leaving scope for others to visit and take similar coverage.
Currently there were at least 16 buyers in Mutsamudu compared with only four recently. “Over this, the crop is much shorter than expected, maybe only 2,000 tonnes,” Mr Nee said.
As a result, Comoros cloves prices looked unlikely to decrease and the domestic market was holding firm.
Mr Nee said Comoros was offering at $9,400 a tonne cif Singapore, $9,950 a tonne cif US and €7,750 ($9,748) a tonne cif main European ports.
Mr Courme said that he could not find any sellers of Comoros cloves offering competitive prices.
He added that in Madagascar old crop prices had decreased a little bit since the end of July and were now around $9,700 a tonne c&f Europe.
Mr Nee viewed Madagascar old crop offers as still being “rather high” and he was advising extra care in making sure purchases were of a suitable quality.
The country has been pegged to have a favourable 2012 crop of between 8,000 and 9,000 tonnes. Harvesting was expected to start in mid-October for shipment in November.
Mr Nee said that as yet there was no idea of what the opening prices would be, but based on current offers it was doubtful there would be a large cut in Madagascar cloves prices ahead, he claimed.
Contacts in Brazil had indicated they were expecting new crop prices in the South American country to open around $9 and $10 a kg fob.
https://www.spicefactors.com/upturn-in-indonesian-cloves-price-reflects-global-firmness/
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