Cloves market revives on upcountry buying

The cloves market in India showed some movements in recent days after a momentary hibernation in the closing weeks of 2011.

The market in Nagercoil in Tamil Nadu is said to have received some enquiries from upcountry buyers and the price there was Rs 900 a kg, trade sources in Nagercoil said. “There appeared to be an artificial panic created in the minds of traders here following reports of bearish sentiments in upcountry markets,” they said.

However, the market witnessed a revival last week and the prices moved up by Rs 50 a kg and this trend is expected to prevail, market sources in some of the upcountry markets claimed.

Some stockists who had exported their stocks when prices were ruling high in the international markets wanted to cover to replenish their stocks were trying to pull the market down, they alleged. A total quantity of an estimated 3,000 tonnes of cloves was shipped out last year from the country which is a net importer of the commodity. “Therefore, those who wanted to cover their sales resorted to bearish activities to depress the prices,” they told Business Line . “Some people are playing to manipulate the market,” a dealer in Nagerkoil alleged.

COSTLY IMPORTS

According to the trade in Nagercoil and Bangalore, the Sri Lankan crop is projected to be somewhere between 5 and 10 per cent only. They said the rupee has depreciated by around 20 per cent making the imports costly and consequently the landed cost has gone up substantially.

“Cloves markets in India came down due to a few bearish importers who sold blindly and wanted to cover goods,” market sources in Bangalore said. But the markets bounced back during the past few days. International markets are now at $11,000 to $13,000 and the import cost is above Rs 800 a kg, they said.

The traders claimed that there was no cloves stock in Zanzibar while Comoros reportedly sold out its entire crop and Indonesia was buying the entire Madagascar crop. Colombo crop failed totally and hence there continued to be a squeeze in availability, the sources claimed.

Meanwhile, the current Indian crop, according to growers, is going to be “around 70 per cent of the usual bumper crop”. Mr M Subramanian, a grower in Nagercoil said “Every alternate year we used to get bumper cloves crop but the current one is going to be somewhere between 60 and 70 per cent due to multiple factors,” Mr Subramanian, who is also the Joint Secretary of Cloves Growers Association of India (CGAI), told Business Line .

He said it is grown in Karumparai, Maramalai, Balmore and Belmalai region and the bumper crop normally ranges between 1,000 and 1,500 tonnes. Contrary to our expectations, the crop is estimated to be some where between 600 and 800 tonnes, he said. Consequently, the total availability this year of indigenous produce is likely to be around 1,500 tonnes, he said.

In Nagarcoil market, he said, cloves prices dropped from Rs 1,050 a kg to below Rs 800 a kg in recent weeks and there were no buyers.

However, growers in Tamil Nadu and Kerala, the major cloves growing States are hoping that prices would return to around Rs 1000 a kg in the coming days.

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