Upturn in Indonesian cloves price reflects global firmness

 

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/

Cloves Prices in India Likely to Shoot up in 2023

 

According to recent reports, global demand for cloves has been strong, leading to sustained high prices despite some recent increases. While production levels have been mixed across different origins, favorable 2022-23 crops in some areas have been offset by disappointing harvests elsewhere. As a result, the underlying supply of cloves is expected to become increasingly limited by April due to estimated exports so far and dwindling carry-over stocks.

The latest price indications from European traders suggest that Indonesian cloves are currently trading around $8,750 per tonne cfr Singapore, while Madagascar cloves are in the range of $8,700/tonne cif Singapore. Just a few weeks ago, Madagascar cloves were indicated at $8,400/tonne cif Singapore.

The Comoros cloves crop was reported to be very good due to favorable weather, with an estimated production of 6,000 tonnes, compared to a “normal” crop of about 3,500-4,000 tonnes in previous years. Meanwhile, the Zanzibar crop was described as normal, with an estimated production of about 4,000 tonnes.

However, the Madagascar cloves crop fell short of expectations, with a production of only 11,000-12,000 tonnes, compared to 22,000-23,000 tonnes in the previous year. Additionally, for the third consecutive year, the Indonesian crop was very short, with an estimated production of only 55,000-60,000 tonnes, which is less than half of what this origin achieves during a good harvest.

Brazil’s contribution to the global supply of cloves is negligible, with its 2022-23 crop estimated at no more than 2,000 tonnes. Most of this was sold to the US and South America, mainly for the production of cloves powder. The quality of this year’s harvest is said to be very poor.

In conclusion, while demand for cloves remains strong, the limited supply of the spice, due to mixed production levels and poor harvests in certain origins, is expected to lead to sustained high prices in the coming months.

https://www.turkeydalal.com/

Cloves Market Latest News

 


Royal Golden's Cloves Market Latest News
By Parsram Dhirani

Madagascar - With weeks of slow progression of incoming new crop from field, goods are now reportedly seen starting to arrive in good flow from North and Tamatave areas. The arriving crop seems promising in terms of colours despite few areas reporting having small buds. According to shippers, few weeks from now, quality will be perfect alongside volume distribution from Tamatave that will finally increase. However, some buyers on site who are allegedly monitoring the field are still not able to procure enough cargo with export license that is still under renewal process. Most major sellers are still abstaining from selling until the license is released from their government. While some are able to offer, buyer must be willing to pay a premium price. Local price from North bushes still between MGA 25,000 – 25,500 while from Tamatave it is now at about MGA 30,000 with indicative FOB export price ranging from $7500 (pmt) and up.

Comoros from few days of holding their offers, finally came back in market by ending week 45. Price indication about $7200 pmt which is much supportive compared to Madagascar.

Sri Lanka still experiencing extreme weather events that could affect cropping patterns by December harvest. Price indication about $7100 -7200 pmt.

Brazil is completely absent.

At the moment, it is Madagascar versus Comoros. The latter as an active and leading contender compared to the other (at least) in terms of pricing. However, for those buyers who still value quality over price, choosing Madagascar is a ‘no brainer.’

On overall market sentiments, while others sporadically cover their urgent needs, the current economic condition overrides the optimism of some to openly participate and would rather stay on side line until the right buying time comes.