Indonesia
Indonesia experienced favorable weather for the crop’s flowering stage and is expected to produce well compared to 2021. However, the unfavorable weather resulted in having poor harvest last year.
The overall demand for the crop is still good in the international market and is quoted to be at $1,400 MT. Therefore, despite the low production, experts believe last year’s volume is enough to fulfill the present demand for the spice until the new crop arrives in the market.
By the second quarter this year, with the arrival of the new crop, there might be pressure on the price. However, since the majority of the international demand will be met by then, there are chances that the price may go down for the crop.
Experts believe the price drop will attract cigarette companies to enter the market and fill up their stocks.
This might allow the clove market in Indonesia to remain stable despite low international demand.
Madagascar
The production is lower than last year due to the country being hit by cyclones the previous year.
The shortage of production has moved the price up. As a result, the trading is slow in the country and the trading hub, i.e., Dubai.
With the harvest being complete, the price for the commodity is being quoted at $900 MT for immediate shipment.
Sri Lanka
The overall harvest in the country is of small quantity, but the material is of premium quality; hence the price is quoted at $11,000 MT.
Prediction
The price difference between Indonesia and Madagascar cloves is likely to be narrow due to the former getting the pressure from the supply chain and the increase in production. The latter has lower output due to the cyclone. But the overall market for cloves is setting up to be good for the year.
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