Cinnamon FOB Prices Flat as Monsoon Stays Uneven in India and Heat Lingers in Vietnam

Cinnamon FOB prices from India and Vietnam are unchanged week-on-week, with only a modest softening compared with late June. Weather remains the main macro risk: India’s monsoon is still seasonally weak in key spice states, while Vietnam faces persistent heat, but neither has yet tightened physical availability. The cinnamon market is currently in a balanced holding pattern. India’s southwest monsoon has now covered the entire country, but cumulative rainfall is still significantly below normal, with June–July among the driest in over a century and Kerala recording a steep seasonal deficit. In Vietnam, hot, dry weather continues across central provinces, yet current stocks and earlier harvests are sufficient to keep cassia exports flowing normally. Recent trade commentary still describes cassia as being in a quieter, well-supplied phase between main peeling seasons. For the next few days, prices are expected to remain range-bound, with buyers able to secure volume at steady levels and only limited upside risk in the very short term.

Prices

Latest indicative FOB levels (converted to EUR at ~1 USD = 0.92 EUR):

Price action over the last month shows a mild easing from early July in both Indian and Vietnamese origins, followed by three consecutive weekly fixes at unchanged levels into July 25, signalling that sellers and buyers are broadly in equilibrium.

Supply, Demand & Weather

India (IN)

India’s southwest monsoon has now covered the entire country, but remains weaker than normal, with a national deficit of around 21% by July 21 and June–July ranked as the fifth-driest in 126 years. Kerala, a key spice-growing state, shows a seasonal rainfall shortfall of about 31–34%, and forecasters report a lack of strong revival signals in the near term.

Despite this, India’s agriculture ministry notes that the monsoon has fully advanced and that inputs such as fertilisers and seeds are adequate, though it continues to monitor El Niño risks. For cinnamon and related tree spices, the immediate impact is limited: perennial plantations are resilient to short-term deficits, and no major production damage reports have emerged so far. However, ongoing dryness in Kerala and neighbouring states increases medium-term yield and quality risk for the 2026/27 cycle if August rains underperform.

Vietnam (VN)

Vietnam’s cassia regions are moving through the quieter inter-season period between main peeling windows, with exporters largely shipping from existing stocks. Recent spice market commentary highlights strong availability of cassia and only selective, quality-driven firmness rather than broad-based tightness.

Central Vietnam has been experiencing recurring heat and relatively dry conditions, but these have not yet translated into concrete yield downgrades for cinnamon. Exporters remain willing sellers at current FOB levels, helped by smooth logistics and normal trade flows, while demand from key destinations (China, the Middle East, and the EU) is steady but not aggressively higher.

Fundamentals & Market Drivers

• Weather risk vs. actual supply: Monsoon deficits in India and heat in Vietnam are being closely monitored, yet no material curtailment of cinnamon supply has occurred so far, explaining the flat price pattern.
• Macro & FX: With the Indian monsoon deficit raising general food inflation concerns, policymakers expect only limited impact so far, which reduces urgency for stockpiling in spices. The slightly stronger euro vs. dollar in recent weeks marginally softens landed EUR prices for importers.
• Seasonality: Vietnam is between main cassia harvesting windows, and India is in the middle of the monsoon season, so any supply shock from weather would show more clearly in offers from late August onward, rather than in the immediate spot market.

Short-Term Outlook & Trading Strategy

3–7 day market view

• India (IN, FOB New Delhi): With the monsoon axis expected to remain uneven but without new extreme events flagged for the next few days, no immediate disruption to farm or transport operations in Kerala and other spice belts is anticipated. Prices for both cassia and Ceylon cinnamon are likely to hold in a narrow, stable band in EUR terms.
• Vietnam (VN, FOB Hanoi): Continued hot, mostly dry weather keeps curing and storage conditions favourable, supporting steady export flows. FOB cassia split, broken and cigarette are expected to stay flat, with only minor intra-day offers changes driven by individual sellers rather than the overall market.

Trading recommendations (spot & nearby)

• Importers (EU/MENA): Use current flat prices to secure near-term coverage (1–2 months) for both Indian and Vietnamese origins. Avoid over-buying far forward until clearer signals emerge on August monsoon performance in India.
• Blenders & processors: Consider modest origin diversification: combine Vietnam cassia splits/broken for cost efficiency with smaller volumes of Indian organic and Ceylon for premium blends, taking advantage of today’s stable differentials.
• Producers & exporters (IN, VN): With no bullish catalyst in the next few days, holding out for significant price appreciation looks risky. Maintain competitive offers but include weather-risk clauses for shipments scheduled beyond September.

3-day directional price indication (EUR, FOB)

• IN – New Delhi (cassia & Ceylon, organic): Stable; day-to-day moves likely within ±0.5% in EUR/kg, mainly on FX and freight quotations.
• VN – Hanoi (cassia split/broken/cigarette): Stable to slightly soft; indicative range 0 to -0.5% as ample stocks and calm demand keep sellers flexible.