CLOVE - A CURTAIN RAISER FOR 2023 SEASON

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

The 51st Annual Session and Meetings of the International Pepper Community

 

Online Registration is Now Open -
The 51st Annual Session and Meetings of the International Pepper Community and International Spice Exhibition
(51st IPC ASM ISE)

 Assalammualaikumwarahmatullahiwabarakatuh and Greetings from the IPC Secretariat!

Dear International Pepper Community Family,

The International Pepper Community (IPC) holds regular Session and Meetings yearly which is hosted by the IPC member country on a rotation basis. Each member country is represented by a delegate with plenipotentiary authority to the Session. This year, the 51st Annual Session and Meetings of IPC and International Spice Exhibition (51st IPC ASM ISE) will be hosted by the Government of Malaysia and jointly organized by the Ministry of Plantation and Commodities (MPC), Malaysian Pepper Board (MPB) and IPC at Pullman Hotel Kuching, Sarawak, Malaysia from 6 - 9 November 2023. 

Following the peak of pepper price in 2015/2016, the global pepper production has continuously reported with a steady increasing trend which has caused the scale to greatly tip to one side. On average, in the past 5 years, the global pepper production has exceeded 500 KMT while the excess stock brought over balance for a 5-year calculation (2017 - 2021) averaging around 175 KMT. As result of the global oversupply of pepper, pepper price has fluctuated with a tendency of decreasing and has prolonged the unfavourable low prices of pepper. The imbalance of global pepper supply and demand has put pressure to the economy of the stakeholder of the pepper industry, especially pepper smallholders as they are burdened with a significant high cost of production and relatively low selling prices. In this regard, the need for increasing the global demand of pepper has been of great importance and ought to be seriously taken up by all the stakeholders of the pepper industry by encouraging more pr omotional campaign to increase the consumption of pepper both domestically and internationally as well as penetrating more unconventional consuming market to expand the pepper market. Thus, creating more opportunities for the advancement and sustainability of the global pepper industry.

As such, IPC take upon the theme of "Balancing the Global Pepper Supply and Demand - Alleviating Pressure on Prices" for the 51st Annual Sessions and Meetings of the International Pepper Community. The 51st ASM ISE is expected to be one of the largest ever conferences of the International Pepper Community.

Don't miss out this opportunity and I hope to see you in Kuching, Sarawak soon!

#togetherwearestronger  

REGISTER NOW

 Thank you and kind regards.

Salam hormat,
Firna Azura Ekaputri Hj. Marzuki
Executive Director of IPC

Vietnam exports nearly 131,777 tonnes of pepper Jan - May 2023

Vietnam exported nearly 131,777 tonnes of pepper worth 408.9 million USD in the first five months of this year, up 30% in volume but down 12.7 in value over the same period last year, according to the Vietnam Pepper Association (VPA).

Of the figures, black pepper was 119,832 tonnes and white pepper, the rest.

Pepper exports to Asian market remained a bright sport, reaching 78,907 tonnes, skyrocketing 77.2% and accounting for nearly 60% of the country's total export turnover of this kind of spice. China was the key market as the neighbour imported 46,169 tonnes of pepper, taking up 35% and soared 1,668.9% year-on-year, while the exports to the Philippines was 3,305 tonnes, a hike of 26.1%.

Notably, exports to African market experienced a surge of 38.9%, of which those to Egypt and Senegal shot up 140% and 104.4% year on year, respectively.

The American market recorded a fall of 13.1% in the reviewed period, accounting for 18% of the market share, of which exports to the US decreased 15.5%, picking up for 21,093 tonnes.

Occupying 16.8% of Vietnam’s total pepper export turnover, the EU market fell 9.4% year-on-year in the first five months of this year.

 https://vietnamnet.vn/en/vietnam-business-news-june-13-2023-2152938.html

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PEPPER MARKET REPORT FROM PEARL GROUP

Indonesia is in the period of pepper decline,it is estimated the crop size for 2023 will be around 55000 tons , 10000tons less than the 2022 crop(65000 tons). because people in Indonesia are not interested in pepper in the context of competition with coffee trees due to better coffee prices. At the same time there was a more widespread shift to palm trees. Subjectively, the output figure given by the Indonesian Ministry of Agriculture is always much higher than the actual figure to receive the government's annual support budget. It is expected that Indonesia will harvest in July-August.

Brazilian pepper has always been more competitive in price than Vietnamese pepper, but because Brazil is facing difficulties and is controlled by the problem of Salmonella infection in the EU market, Vietnamese products are relatively competitive in the EU. Recently, to diversify markets, Brazil has also gradually appeared in the Middle East and Africa with lower asking prices than Vietnam due to advantages in transportation costs and geographical location.

Why Production of cloves has plunged in Zanzibar

 

Pemba, Monday, June 12, 2023

Opposition ACT-Wazalendo is blaming the fall of clove production in Zanzibar on the current payment system.

Under the system, a farmer is paid 80 percent of the world market price.  ACT-Wazalendo says this was a disincentive.

Speaking at their first rally in Jadida Ward, Wete District in Pemba, the party’s vice chairman, Mr Othman Masoud Othman, said it was unfortunate that Zanzibar, which was once the leading grower of cloves is witnessing a drastic fall in production.

Mr Othman who is also the Isle’s First Vice President said Zanzibar can produce up to 20,000 metric tons of cloves, but the government has put its hands on the issue, taking away the incentives from the farmers.

“The production of cloves has dropped because the government wanted to run the business. We in ACT say the production and operation of the business should remain in the hands of farmers,” said Othman.

He said what is required was to create an enabling environment for the clove business.

“Right now, we are being told that farmers get 80 percent of the market price, but in reality, after factoring in all the costs, the farmer only receives 38 percent.

He said it was due to that situation that most farmers have stopped taking care of the clover plantations because they no longer see the benefits.

“We at ACT say that production will increase and the people will see the true value of taking care of it,” said Mr Othman.

Bank of Tanzania (BoT) figures show that the value of goods exports in Zanzibar decreased by 25.9 percent to $64.8 million due to the decline in proceeds from the export of cloves and manufactured goods.

The BoT projects that actual export volumes may have fallen by 16.3 percent during the year to April, 2023 to only 7,000 tonnes from 8,400 tonnes of 8,400 tonnes during the preceding year.

This, along with a 19 percent fall in unit price, saw the amount earned through clove exports dropping by a cool 32.2 percent to only $42.5 million during the year ending April, 2023.

Regarding the spiralling poverty among the youth, the vice chairman said it was mainly due to the fact that most of the youth were not given employable skills to enable them take up jobs in industries such as hospitality.

 

  https://www.thecitizen.co.tz/tanzania/zanzibar/act-why-production-of-cloves-has-plunged-in-zanzibar-4267154

 

Vietnam does not face challenge from Cambodia pepper exports to China...

 

Vietnam's pepper exports are not challenged by Cambodia being issued a licence to export its pepper to China directly, according to experts.

05/06/2023

The Viet Nam Trade Office in Cambodia quoted Khmer Times sources saying that Cambodian pepper would be available in China directly after the General Administration of Customs of China (GACC) approved Cambodia’s export proposal.

Accordingly, the GACC approved seven packaging factories and 28 growing facilities for pepper exports in Cambodia.

Le Viet Anh, head of the Viet Nam Pepper Association's office, Cambodia exporting pepper directly to China was not a challenge for Viet Nam's pepper exports immediately because the pepper volume exported from Cambodia to China was not much.

“About 90-95 per cent of Cambodia's pepper output have been exported to Viet Nam, then processors in Viet Nam have re-exported the volume to other countries, including China," said Anh. "Meanwhile, Cambodia has few trading companies, mainly FDI enterprises."

Hoang Phuoc Binh, vice chairman of Chu Se Pepper Association (Gia Lai), said this was normal. Cambodia's pepper had been mainly exported to Viet Nam and re-exported to China. The remaining 10-20 per cent had been shipped directly to China and Europe.

With this permission, the pepper volume exported directly from Cambodia to China could increase, Binh said.

Therefore, according to experts, it could increase competitive pressure on Vietnamese pepper exported to China in the future.

The Viet Nam Pepper Association said Cambodia had been the second largest pepper exporter to Viet Nam after Brazil. In the first four months of this year, Cambodia exported 1,715 tonnes of pepper to Viet Nam, down 64 per cent compared to the same period in 2022. However this was official export, not including several thousand tonnes of unofficial exports.

In the first quarter of 2023, China increased pepper imports from Indonesia, Malaysia and India. In contrast, China reduced pepper imports from Viet Nam. Viet Nam's pepper market share in China's total imports decreased from 39.36 per cent in the first quarter of 2022 to 29.75 per cent in the first quarter of 2023.

Regarding the reduction in Viet Nam's pepper exports to China, Binh said it was not a concern; Viet Nam had accounted for more than 50 per cent of the world's exports. The output of pepper in other markets, such as Cambodia and Malaysia, had been very small. So, China still had to import pepper mainly from Viet Nam.

China imports an average volume of about 50,000-60,000 tonnes of pepper from Viet Nam annually. The export volume of white pepper to this market will fluctuate occasionally.

In the first four months of 2023, China imported 35,000 tonnes of pepper from Viet Nam. In the next six months, Viet Nam will not have any difficulty exporting 20,000-25,000 tonnes of pepper, according to Binh.

The association estimates that Viet Nam's pepper output 2023 will increase by 5 per cent compared to 2022.

In 2022, Viet Nam exported more than 226,000 tonnes of pepper, earning nearly US$963 million, according to the Ministry of Industry and Trade. — VNS

https://vietnamnet.vn/en/vietnam-does-not-face-challenge-from-cambodia-pepper-exports-to-china-experts-2151258.html

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/