With a crop yield of 15,000 MT, Madagascar remains the leader in the clove production and exporter in the market. The market initially had a slump after the arrival of the new crop from $8,30 per kg FOB to $7,70 per kg FOB. The price went down from December to January during the holidays. But from early February, the price picked up as the market activity increased, pushing the price to $8,70 per kg.
There is a contract for over 12,000 MT of the Madagascar clove in the market. However, the traders will wait for a further increase before selling the crop. They will be watching the market closely before making an offer.
India imports clove heavily from Madagascar. It has bought about 12,000 MT. According to experts, the quantity purchased is good until the new season. There is a good demand for spice in the domestic market. With the traders’ limited release of the existing stock, the price will go bullish for cloves this month. India is importing some clove from Zanzibar today, but it is unlikely to impact the market this month.
In a surprise move, Indonesia, another leader in the clove market, bought 30 to 40 percent of Madagascar’s crop. The product reaches Singapore before reaching its destination, Indonesia.
The current season is over for the crop. However, the prices will increase next season due to the consecutive cyclones affecting the country’s growing areas.
Some old crops are still available at $8,70 per Kg FOB.
Indonesian clove price is staying steady. Currently is being sold between $8,70 and $9,10 per kg FOB. The Indonesian cloves available in the market are of standard quality, helping the price stay firm.
Compared to 2021, the production of cloves will be less in 2022. For example, in 2021, the yield was 80,0000 MT, less than 130,000 MT in 2020.
The prediction in the decrease in production will put the market in a bullish mode. The lower yield also means the cigarette factories will be buying the commodity aggressively, which will increase the price.
Brazil, Comoros, and Sri Lanka do not have any crops available for export. Therefore, these are the other three leading clove export countries.
Prediction
The projected growth of the clove market is at 3.1 percent Compound Annual Growth Rate (CAGR) between 2021 and 2026. The medicinal value of the spice will keep the consumption up; hence the price will stay bullish too.
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