The Hindu Business Line : Cloves’ prices rise 25% as arrivals fall in Brazil

Latest reports, according to information made available to Business Line by the Brazilian Pepper Trade Board (BPTB), which trades in spices, “the harvest is smaller than originally previewed – between 4,000-5,000 tonnes. We believe that bids below $4,700 would not be considered at this moment”.

New crop of cloves is slowly coming to the market. Slow drying process in Brazil is also contributing to the thin arrivals, it said.

Bullish sentiment

The first week of the year showed a strong bullish sentiment among the growers despite buyers’ (exporters) absence due to holidays. As a result, export prices jumped to $4,800 and further to $4,990 a tonne, which is an increase of 25 per cent compared to one week before, it said.

According to earlier reports, the global output of cloves is estimated to be lower this year following drop in production in several producing countries.

The output in Sri Lanka where harvesting is to take place this month is estimated to be around 2,000 tonnes as against the earlier projection of 5,000 to 6,000 tonne.

Similarly, in Madagascar also it is estimated to be between 1,500 tonnes and 2,000 tonnes as against its normal production of 12,000 tonnes. In Zanzibar it is estimated to be 800 tonnes where the normal output used to be 4,000 tonnes.

The prices quoted here is $5,400 a tonne. Comoros is reported to have produced only an estimated 600 to 700 tonnes and the entire quantity has been sold out.

Indonesian output

In Indonesia, the world’s largest producer of cloves, where harvesting is in March/April, the total production is estimated to be around 20,000 tonnes, which is 20 per cent of its total output.

Indonesia had a bumper crop with a total production of around 80,000 tonnes. The price quoted at present is $4,900 a tonne. Indonesia which uses a substantial quantity of its cloves in the tobacco industry is unlikely to have much for exports, a Bangalore-based cloves dealer told Business Line.

India is a major consumer of cloves with an annual demand of 6,000 to 8,000 tonnes. The indigenous production is estimated at below 2,000 tonnes. The gap in demand and supply is met by imports. The total import of cloves during April – October 2007-08 stood at 3,610 tonnes valued at Rs 44.33 crore against 2,881 tonnes valued at Rs 53.97 crore in the corresponding period of last fiscal. The unit value during the first seven months of the current fiscal was at Rs 122.80 a kg compared to Rs187.35 in the same period in 2006-07.