The Indian clove market is importing cloves to meet the local demand. Post pandemic, the demand for the spice has increased as people use it for its healing properties. However, the production has been low, about 1,200 tons compared to the domestic demand being between 20,000 and 22,000 tons.
As a result, 95 percent of the domestic demand is met via imported clove.
Market Sentiment
This year Tamil Nadu recorded the maximum production of the crop; Kanyakumari alone reached 700 tons. But the other producing states like Kerala, Karnataka, and Andaman and Nicobar Islands didn’t produce as expected.
One of the main reasons there has been a lack of clove production in India is that the farmers shifted to cultivating other crops since clove fetched lower prices. Though the sowing season hasn’t begun yet, which is between December and the end of March, the farmers are still apprehensive about planting cloves if the price dips further.
However, as exporters suggest, the Indian clove market is likely to go on a bullish mode because of its increased demand in the international market. Currently, Indonesia consumes a significant portion of its domestic clove, but with lower production in the country, India can become the exporter of spice in the international market.
According to market experts, there is significant demand for clove oil in the international and domestic markets. The oil is made from the clove flower and leaves, which costs about $13.46 per 10 milligrams. The oil is used in perfumes, cosmetics, pastes, curry masalas, and even cigarettes manufactured in Indonesia.
The demand for Indian cloves in the international market is quite high since they are of excellent quality. Kanyakumari Clove has the GI (Geographical Indication) tag, and now efforts are in place to get the GI tags for Thalanadu cloves and Kottayam cloves.
But Indian farmers are still wary about increasing the sowing acreage of cloves because many traders import the spice from Sri Lanka, which offers the product at a lower price compared to India. So, naturally, this affects the Indian clove farmers and clove market.
Since cloves have high production costs, there is a demand for subsidies, grants, and concessions for growing the crop. Farmers are also seeking help from the Spice Board of India for cultivating the crop.
The market sentiment for the crop is expected to stay firm in the coming days amidst improved demand.
Price
The current rate of clove in the market is between $10.09 per kg and $11.44 per kg, increasing to $13.46 per kg.
Prediction
If the production of Indian cloves increases and the Spice Board supports the farmers, it can benefit the Indian market. With Indian cloves being of higher quality than Sri Lankan products, many importers of the international market and Indonesia will look towards India to fulfill their demand. It now remains to be seen what the clove farmers of India decide between December and March.
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