Festival season in Gulf perks up cardamom demand

Kochi March 02, 2020

Declining prices and the ensuing Ramadan demand seem to have prompted overseas buyers of cardamom. This is evident from the procurement of 25 per cent of the commodity by exporters, out of the 32 tonnes offered in the morning auctions at Bodinayakanur on Monday.

The recent price drop is an opportunity to explore the Gulf markets. With rates coming down, the price difference with the Guatemalan variety in the Gulf markets is now $5 per kg as against $10 earlier, traders said, adding that the downward price trend is expected to provide market stability and fetch more export revenue.
Cardamom exports from India up to December was only 500 tonnes because of high prices of the commodity as against 1,300 tonnes in the previous year, they said.

The surge in export demand can be linked to dropping prices and the upcoming festival season in GCC countries. Since the festival period this year falls in May, exporters would start procuring the commodity in March and April. Indian capsules are in great demand in Gulf countries because of its superior quality.

Few export, sub-suppliers and direct exporters have participated in today’s auctions, which indicates there is some renewed demand in the Gulf countries. Some shipments were sent last week, which will reach the Gulf coasts in mid-March. There is still not much stock available to fulfil the seasonal demand. As a few countries are facing Coronavirus threat, it may affect shipments, an exporter said.

Iran, one of the active markets for Indian cardamom, may not be active until the situation improves. Kuwait seems to be very active, especially after the Gulf Food Expo, preferring the Indian commodity to the Gautemalan, the exporter said, adding that there is a likely shortage of crop from Guatemala because of drought.
Arrivals in the auctions have shown sizeable improvement at 79.5 tonnes and the average price realisation was ₹2,985.

V Sajeev Kumar
The Hindu Business Line

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PEPPER MARKET UPDATE 2ND MARCH 2020 – WEEK 10

Vietnam pepper price has increased by 10% in the past two weeks. The price of material from the VND 36,500 has increased to VND 40,000 today. Despite being in the harvest season, raw material prices continue to rise steadily due to the following main reasons;

- At these level, many farmers are at a loss, almost all consider storing pepper. Farmers and domestic agent prefer to sell other agricultural products like Coffee to cover temporary costs and store as much pepper as possible. As their perspective, pepper is the most attractive to invest compared to other agricultural products.

- Pepper price is at low level, it has stimulated many exporters/agents to buy stocks. Especially, there are large enterprises with FDI capital actively participating and pushing the market up sharply in the past week. Pepper harvesting fully swing in all area in Vietnam however it is not easy to buy large quantities from last week.

- Although cross-border transactions with China are still very difficult and costly, there have been some Chinese businessmen buying and stockpiling in Vietnam. They feeling pepper price was good and waiting for better clearance opportunities. It’s stimulated the market to increased until now.

- Several exporters are big short and have to buying raw material in secret for the ordered in the first quarter 2020.

China The situation of Corona Virus has been better controlled and real demand is gradually returning to the border. However, customs clearance is still slow due to many procedures and costs.

India In local market, Malabar black pepper was traded with a 2% deficit as compared to the previous week, averaging at USD 4,372 per Mt.

Indonesia black and white pepper were reported with a 2% deficit respectively when compared to the previous week.

Malaysian black and white pepper were also traded domestically with a 2% and 1% deficit respectively as opposed to the previous week.

Sri Lanka black pepper was reported steady at an average of USD 2,929 per Mt.

Brazil  Continue to offer competitive prices but not much quantity. The Brazilian currency, which has depreciated against the US dollar by more than 10% since january, has also kept Brazil pepper prices at low level. However, we would not be surprised if the Brazilian market continues to increase follow Vietnam.

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#CARDAMOM - India - Cardamom exporters looking to tap Gulf markets

February 26, 2020

The subdued demand for Indian cardamom in the just concluded Gulf Food Expo has not deterred exporters from trying to tap the burgeoning Gulf markets. They are pinning hopes on the ensuing Ramadan festival season in April, which they expect to perk up demand.

However, the higher price of Indian cardamom over the Guatemalan varieties is causing concern among exporters. Though the price of export grade Indian cardamom has started receding from $58-$60 to $50-52 per kg, the Guatemalan crop is available in the range of $38-42, said Dhanavanthan Murugesan, Mercariex Worldwide, a cardamom exporting firm based in Bodinayakanur.

He pointed out that the export price in the last 10 days has remained stable and importers are waiting for a further decline in domestic price. The Indian commodity can take advantage of the anticipated shortfall of Guatemalan cardamom in the September 2020 harvest.

Indian cardamom is the most preferred variety in the Gulf markets and the active overseas markets are Dubai, Kuwait, Iran, Iraq, Jordan, Bahrain, Turkey, Canada and some European countries. However, the higher prices due to lower domestic production have given a competitive advantage to the Guatemalan crop. Many Gulf importers prefer Indian cardamom because of its quality, Murugesan said.

Saudi Arabia is a major buyer of Indian cardamom, but restrictions over pesticide residues have impacted export to that country in the last two years.

S.B.Prabhakar, a leading planter in Kerala’s Idukki district, said the Guatemalan crop shortfall is around 40 per cent this season due to drought. Moreover, the prices have doubled there and it will remain firm to bullish in the short term.

According to traders, only 10 per cent of the total production is exported now as against 15-20 per cent a few years ago. In value terms, cardamom exports have halved to ?500 crore this year from ?1,000 crore last year.

However, traders expressed the hope that the control on pesticides residues in several plantations would help achieve a good crop in the coming season. Farmers are now adopting better agricultural practices.


Ajith BK, Secretary, Association of Planters of Kerala, said large growers have already taken precautions on the usage of pesticides. Prices in the domestic market have been showing a declining trend for the last two months.

V Sajeev Kumar  Kochi | Published on February 26, 2020

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#Cardamom -Cardamom prices stable at Bodinayakanur auctions

Published on February 25, 2020

Cardamom prices remained stable on Tuesday at Bodinayakanur because of more active participation.

According to traders, upcountry buyers are keenly assessing market sentiments even though they have not yet started procurement in a big way. Liquidation of some of the high-priced inventory also helped bring stability to the market.

Contrary to weather forecasts, plantations have not received any showers in the last few months. Small and marginal farmers are facing acute water shortage in the region, traders said.

Any rise in prices is likely to depend on the summer rains. Delay in summer showers and the intensity of the summer will drive up prices, traders said.

The total quantity offered in the auction was 43.5 tonnes, which recorded a combined average price of R$2,745. In the morning session, Cardamom Growers Federation offered seven tonnes, in which 6.3 tonnes realised an average price of R$2,720.68. The highest price quoted for selected lots was R$3,276.

The offer made by KCPMC in the afternoon trading session was 36.5 tonnes, in which 35.9 tonnes realised an average price of R$2,769.32. The highest price quoted for selected lots was R$3.266.


According to trade analysts Acumen Capital Markets, the March futures fell by 3 per cent or R$89 to R$2,879.30 when last traded on Monday.

V Sajeev Kumar  Kochi | Published on February 25, 2020

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IPC SPECIAL ISSUE ON CLOVES - FEBRUARY, 2020 -FINAL

PART 2 - FINAL

#CLOVES #INDONESIA EXPORT FIGURES, PRICES


As the top producers of cloves in the world, Indonesia actively exports cloves to various countries. In 2017, Indonesia was reported to have exported a total of 9,089 Mt of cloves from which 95% or 8,675 Mt of it comprised of whole cloves and 5% or 414 Mt of it ground cloves. Indonesia on average exported a total of 757 Mt per month which peaked in February with 1,484 Mt. The total revenue of Indonesia’s export of cloves in 2017 was reported to be as high as USD 28.9 Million. Thus, recording an average price of the total cloves exported by Indonesia at USD 3,104 per Mt for whole cloves and USD 4,823 per Mt for ground cloves.
Year 2018 saw an increase in term of quantity of cloves exported by Indonesia. Indonesia was reported to have exported a total of 20,246 Mt of which 95% or 19,183 Mt of it comprised of whole cloves and 5% or 1,063 Mt of it ground cloves, recording a total increase of 123% when compared with 2017. The average export of cloves by Indonesia in 2018 was reported to be at 1,687 Mt per month which peaked in November with 5,132 Mt. In accordance with increasing in terms of quantity, Indonesia’s revenue from cloves export was reported to have increased by 252% to a total of USD 101.7 Million as compared to the previous year. Thus, recording an average price of the total cloves exported by Indonesia at USD 4,995 per Mt for whole cloves and USD 5,581 per Mt for ground cloves or an increase of 61% and 16% respectively as compared with 2017.

In 2019, Indonesia was reported to have exported a total of 25,990 Mt of which 96% or 24,971 Mt of it comprised of whole cloves and 4% or 1,019 Mt of it ground cloves. Thus, recording a total increase of 28% when compared to 2018. By the end of 2019, the total revenue of cloves export by Indonesia was reported to have reached USD 111.5 Million, recording an increase of 10% as compared to 2018. The average price of the total cloves exported by Indonesia in 2019 was reported at USD 4,289 per Mt for whole cloves and 4,346 per Mt for ground clovesor a decrease by 14% and 22% respectively as compared with 2018.

Furthermore, in the past three years export of cloves and pepper by Indonesia had been reported with an increase. Although Indonesia is the world largest cloves producer in the world, export quantity and value of cloves from Indonesia was reported to be inferior to pepper export. The total quantity of cloves export in the past three years was reported at 55,326 Mt whilst the total quantity of pepper export was reported with 142,082 Mt. Thus, recording the annual ratio quantity of Indonesia export between cloves and pepper during 2017-2019 at 1:5, 1:2 and 1:2 respectively. The total value of cloves export in the past three years was reported as high as USD 242.2 Million whilst the total value of pepper export was reported as high as USD 535.7 Million. Thus, recording the annual ratio value of Indonesia export between cloves and pepper during 2017-2019 at 1:8, 1:1 and 1:1 per year respectively

During 2017-2019, the average export price of cloves for both whole and ground by Indonesia had fluctuated (Table 8). In 2017, the average export prices of cloves by Indonesia was recorded at USD 3,263 per Mt for whole cloves and USD 6,780 per Mt for ground cloves. The highest average export price of cloves from Indonesia in 2017 was recorded in September with USD 5,439 per Mt for whole cloves and in November with USD 15,452 per Mt for ground cloves whilst the lowest average export price was recorded in June with USD 1,635 per Mt for whole cloves and in March with only USD 922 per Mt for ground cloves.

Year 2018, saw an increase in the average export price for both whole and ground cloves by Indonesia, the average export prices of whole cloves by Indonesia was reported at USD 5,062 per Mt for whole cloves and USD 9,008 per Mt for ground cloves. Thus, recording an increase of 55% and 33% respectively when compared to 2017. The highest average export price of cloves from Indonesia in 2018 was recorded in February with USD 6,256 per Mt for whole cloves and USD 28,845 per Mt for ground cloves which also occurred in the same month. Whilst, the lowest average export price was recorded in May with USD 3,506 per Mt for whole cloves and in April with USD 2,080 per Mt for ground cloves.

Contrary with 2018, the average export prices of cloves by Indonesia in 2019 saw a decreasing trend. The average export prices of whole cloves by Indonesia was reported at USD 4,333 per Mt for whole cloves and USD 4,526 per Mt for ground cloves.Thus, recording a decrease by 14% and 50% respectively when compared to 2018. The highest average export price of cloves by Indonesia in 2019 was recorded in June with USD 5,248 per Mt for whole cloves and in December with USD 10,714 per Mt for ground cloves. Whilst, the lowest average export price of cloves was recorded in December with USD 3,538 per Mt for whole cloves and in November with only USD 975 per Mt for ground cloves

Cloves export by Indonesia was reported to be shipped through ports and airports all over the Indonesia such as Java, Sumatera, Sulawesi and Bali (Table 9). Based on the port of origin, the top five origins for cloves export by Indonesia in 2019 were reported to be Port of Tanjung Perak, Surabaya with 23,108 Mt (contributed to 89% of the total export from Indonesia), Port of Tanjung Priok, Jakarta with 1,204 Mt (5%), Port of Tanjung Emas, Semarang with 985 Mt (4%), Port of Belawan, Medan with 304 Mt (1%) and Port of Panjang, Lampung with 232 Mt (1%). Furthermore, cloves export from Indonesia was also reported to be flown through airport such as Juanda (Surabaya), Ngurah Rai (Bali), Soekarno-Hatta (Jakarta) and Kuala Namu (Medan) though its quantity was insignificant when compared to quantity of cloves export through the ports.

Cloves from Indonesia are globally traded in Asia, America, Africa and European Countries (Table 10). In 2019, Indonesia’s top 5 Country of destinations for its cloves were reported to be India with 9,638 Mt (an increase of 115% as compared with 2018), Viet Nam with 2,158 Mt (a decrease of 59%), Saudi Arabia with 2,100 Mt (an increase of 17%), United Arab Emirates with 1,820 Mt (an increase of 125%) and Pakistan with 1,559 Mt (an increase of 2%). In terms of value, Indonesia’s top 5 contributors for its cloves export revenue were reported to be India with USD 34.8 Million, Saudi Arabia with 12.3 Million,United Arab Emirates with 8.6 Million, Singapore with USD 8.2 Million and Pakistan with 7.0 Million

Farm gate price of cloves in Indonesia in the first quarter of 2019 fluctuated with a rather negatively outlook (Table 12). During that period, in several regency of cloves producer, clove farm gate price was reported to have recorded the highest price with IDR 100,000 per Kg (USD 7.0 per Kg) in January and February at Bima Regency and in January at Cianjur Regency, whilst the lowest price occurred in February at Ende Regency with only IDR 79,000 per Kg (USD 5.6 per Kg). Furthermore, the average farm gate price of cloves in most regions in Indonesia during January-April 2019 was recorded at IDR 85,139 per Kg (USD 6.02 per Kg).

This report was elaborated under the supervision of International Pepper Community and information provided by the sources below:
- International Trade Centre (ITC) - Geneva
- Food and Agricultural Organization (FAO)
- Agricultural Commodity Export-Import Database, Ministry of Agriculture of the Republic of Indonesia
- Agricultural Commodity Price Information, Ministry of Agriculture of the Republic of Indonesia
- Directorate General of Estate Crops, Ministry of Agriculture of the Republic of Indonesia

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IPC SPECIAL ISSUE ON CLOVES - FEBRUARY, 2020 PART 1

#CLOVES #INDONESIA

A little bit of History


The distribution of clove plants out of the Moluccas began in 1769. The spread of clove plants to regions of Indonesia such as Java, Sumatra and Kalimantan began in 1870. Today, clove plants have spread throughout the world.

Producing Areas

In 2019, the top 10 largest area of cloves cultivation were estimated to be North Sulawesi Province with 74,940 Ha, Central Sulawesi Province with 71,704 Ha, South Sulawesi Province with 63,136 Ha, East Java Province with 46,043 Ha, Maluku Province with 44,161 Ha, Central Java Province with 42,037 Ha, West Java Province with 35,697 Ha, South East Sulawesi with 31,388 Ha, Aceh Province with 25,530 Ha and North Maluku Province with 21,157 Ha.

Harvest in Indonesia

Harvest season in various producing area in Indonesia varied depending on the local climatic conditions. In Sumatra Island: flower buds grow between October - November and the harvest season is around April - June. Whilst, in Java Island: flower buds grow from November to January, so the harvest falls in May - July. In Maluku Island: flower buds grow between May - July and harvest season is between October - January. Whilst, in other areas the harvest occurred between July - October. Though, generally clove flowering and harvesting in Indonesia occur once a year, the harvest lasts a minimum of three months. Normally, cloves planting at 15 - 20 years of age would be able to produce around 3 kg per tree.

Uses of Cloves in Indonesia

In 2018, Indonesia as the largest producer of cloves in the world contributed to 74% or 123,399 Mt of global production and followed by Madagascar with 14% or 23,325 Mt. Since the 21st century, Indonesia became the largest cloves producer and consumer countries. Cloves in Indonesia are mostly used to supply the cigarette factories. Therefore, from the industrial side, Indonesia domestic production has met the needs of the processing sector. Furthermore, in 2019 the need for processing sector was estimated at 110,000 Mt which was around 83% of the total production and was fully absorbed by cigarette companies such as PT. Djarum Kudus, PT. Gudang Garam, PT. Sampoerna, etc.

Area of Production

The area under cloves cultivation in Indonesia fluctuated with a rather increasing trend. During 1961-2018 Indonesia area of plantation was reported with significant increase of 541,212 Ha. The average increase of cloves area of plantation in the course of half century was recorded 9% per year with the highest increase recorded in 1968 with an increase of 96% as compared with the previous year. In 2018, the area under cloves cultivation in Indonesia recorded the largest ever in the history with a total of 561,212 Ha, recording an increase of 2% when compared to 2017. Furthermore, for the year 2019 the area under cloves cultivation was estimated to increase by 2% to 571,305 Ha. The increase in the area of cloves plantation could be contributed to the massive cloves demand from domestic and international cloves market (Table 2).

Production of Cloves

Indonesian production of cloves during 1961-2018 was also fluctuated with a rather positive trend, recording an increase of 116,399 Mt to a total of 123,399 Mt in 2018. The average increase of cloves production in the past 58 year was reported by 11% per year with the highest increase recorded in 1966 with an increase of 103% as compared to the previous year. Furthermore, the highest production of Indonesia cloves was reported in 2015 with 139,641 Mt whilst the lowest occurred in 1962 with only 6,600 Mt. In addition, production of Indonesia cloves in 2019 was estimated to decrease by 3% when compared to 2018 to a total of 120,000 Mt.

Productivity

Cloves productivity in Indonesia during 1961-2018 was reported to be fluctuated with a rather stable trend. In the past 3 years cloves productivity in Indonesia saw decreasing trend to a total of 220 Kg per Ha in 2018. Since 1961 to 2018, cloves productivity in Indonesia was reported with a decrease by 37%. The average increase of cloves productivity in Indonesia was reported at 2% per year and the highest was reported in 1973 with 483 Kg per Ha whilst the lowest occurred in 1985 with only 144 Kg per Ha (Table 3). Furthermore, in 2019, Indonesia cloves productivity was estimated at 210 Kg per Ha or a decrease of 4% as compared to 2018. Despite Indonesian Government efforts in recent years developing a superior seed of clove which could be used by planters to replanting old or damaged plants andalso to boost the productivity of cloves plantations as well as the Directorate General of Plantations of Indonesia application of good agricultural practices (GAP) to clove plantation in vario us clove producing area, Indonesia's clove productivity was yet to show an increase trend following a decreasing streak which started in 2016.

SEE NEXT TOMORROW - EXPORTS & PRICES

This report was elaborated under the supervision of International Pepper Community and information provided by the sources below:
- International Trade Centre (ITC) - Geneva
- Food and Agricultural Organization (FAO)
- Agricultural Commodity Export-Import Database, Ministry of Agriculture of the Republic of Indonesia
- Agricultural Commodity Price Information, Ministry of Agriculture of the Republic of Indonesia
- Directorate General of Estate Crops, Ministry of Agriculture of the Republic of Indonesia

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VIETNAM - #PEPPER MARKET UPDATE 25TH FEB 2020 – WEEK 9;

#PEPPER:

Vietnam;
Pepper market firmer and increasing tone around 100$ from last week. Exporters have been covering short position for Feb/First Half March shipment beside some middleman/collectors buying huge quantity to keep stock. We heard some demand coming from China (Pay Full Tax) for prompt shipment that encourage farmers hold on and not offer in bulk. Good demand coming from Middle East/Nepal/India for March/April shipment especially black pepper 5mm bold cause shortage BOLD raw material in this time. USA customer more interesting to cover full year shipment but processor/exporters hesitate to offer long shipment. 

China;
The borderline start opening but not easy to clear cargo from trucking like before. The business in border trade maybe continue very tight until second quarter.

Brazil
Market uptrend continue and stock limited. Exporters cautious to offer second quarters shipment.