Agri Business

Global shortage pushes Indian cloves' export

Our Bureau Kochi | Updated on November 13, 2017 Published on July 24, 2011

Indian exports of cloves, probably for the first time by the net importer, crossed 700 tonnes in the past three months to Indonesia via Malaysia/Singapore traders at $12,000 a tonne for Brazilian material to $17,000 a tonne for dry red Indonesian cargo, according to trade sources.

“Yesterday, dry Madagascar cargo was exported from there for $17,000”, they told Business Line. Indian importers who are holding stocks resorted to shipping it out at nearly double the imported price because of great demand from overseas, they said.

Severe shortage of the material is felt in the world market following crop failure in India — the crop is claimed to be only two per cent of the total crop this year, they said.

In India, buying for the ensuing festival season has started and “today the price quoted for cloves in Zanzibar is Rs 1,010 a kg, and in Colombo it is at Rs 890 a kg, and soon it will be Rs 1,200 and Rs 1,000 respectively”, they claimed..

The price has, of late, multiplied nearly four fold on short supply as the last crop in India was less than 50 per cent of the normal output estimated at 2,500 tonnes. Indian demand is estimated at somewhere between 13,000 and 15,000 tonnes, market sources said.

India, despite being a net importer, is feeling the pinch of this shortage as sizeable quantities of cloves are being exported from here, following the sharp rise in prices in the world market in recent weeks, they said.

The production has dropped sharply in Indonesia following crop damage by disease and it is expected to take 3- 4 years to return to normal. As a result, “cloves prices will remain high till 2014, new crops take nearly four years to grow and fruit, while on the other side, the Indian and the world market demand is growing,” they said. “The latest development is that China is now buying huge cloves cargoes, pushing the prices further”, trade sources in Bangalore told Business Line.

The annual world cloves crop is usually 1,41,000 tonnes with Indonesia topping with a production of 1,10,000 tonnes, and at the same time, consumption of around 1,20,000 tonnes, they claimed. “This year, the Indonesian crop is said to be below 10 per cent, that is, 10,000 tonnes while the output of all others put together comes to 28,000 tonnes. Thus, the total world cloves crop is estimated at 38,000 tonnes. Given this huge deficit, cloves' prices are at $21,000 a tonne now and it may climb to $30,000 a tonne soon”, they predicted.

The new crops in Comoros, Zanzibar, Brazil, Madagascar “are also small and are getting booked in forward sales. Indian importers are just wondering while Indonesian cigar companies are buying all crops. Consequently, local Indian markets will soon dry up and will see a price of Rs 1,200 a kg. It is a good time for traders to buy cloves and keep it”, the market sources said.

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Published on July 24, 2011
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