Market Briefing: Spices and Exotics -03 June 2021
Cloves crops falling short of hopes.
Honey draws strong demand.
Production
Zanzibar and Comoros will have disappointing cloves crops of 4,500 tonnes and 3,500 tonnes respectively, due to unfavourable weather, with harvests starting between June-July.
Cyclone Taukta has severely damaged Indian clove plantations, pushing up farmgate prices to a record INR103,000/tonne (USD1,414/tonne) last week.
Brazil’s next cloves harvest will take place in December but Brazilian crops are not bountiful and will be unable to cover the supply gap expected this year.
Harvesting of the Indian turmeric crop is in full swing. The 2020-21 crop estimate is 10% lower than the previous crop (939,000 tonnes), due to lower cultivation as a consequence of falling prices between Q2-Q3 2020.
Spain’s 2021 fresh garlic output may reach 275,000 tonnes, 1% more year-on-year, on 28,000 hectares, 6.8% more, according to the Spanish Garlic Farming Association (Anpca).
The federation of Indian spices stakeholders (FISS) has launched its Gujarat (the main Indian origin) 2020-21 cumin crop estimate, 15% lower (200,000 tonnes) than in the previous season due to poor yield and cut in planted acreage.
Demand
The Indonesian cloves market is undersupplied, and many Chinese importers are taking advantage to re-export to the former at higher prices.
Indian clove importers are advised to be covered until Q3, just when Madagascar starts to ship its new output.
Internal demand for cumin seed in India is expected to slow down due to new Covid restrictions.
Export data shows continued strong demand for honey, such as from key origin China (see Trade below). Interest has been heightened by increased home working due to lockdowns (consumers therefore having a proper breakfast before starting work).
Trade
Partial lockdowns are slowing domestic trade in Indian turmeric.
The Codex committee on spices and culinary herbs (CCSCH) has debated standards on spices and herbs such as ginger, chilli, paprika, basil, nutmeg, cloves, saffron, oregano and basil in its fifth session, held from 20-29 April 2021.
Draft proposals specify product presentation, insect damage, adulteration and microbiological levels, aflatoxins and chemical and physical characteristics such as moisture, volatile oil contents and ash proportion.
China exported about 34,000 tonnes of natural honey in Q1 2021, 25% up year-on-year from the preceding year. Its shipments to the UK were over 6,000 tonnes in Q1, a 36% decrease from the same time last year.
Japan is the largest destination for Chinese honey, with 10,000 tonnes in Q1, 32% up y/o/y.
Peruvian ginger exports rose by 32% year-on-year in volume to 9,940 tonnes and by 56% in value to USD26.3 mln in Q1 2021, after reaching record international sales of 51,120 tonnes, worth USD107.1 mln, in 2020, up from 23,830 tonnes valued at USD41.9 mln.
Indian cumin seed exports reached 33,140 tonnes, worth USD65.2 million in January-February 2021, 31% more year-on-year in volume and 19% more in value.
Prices
Madagascar’s new cloves season started last November at USD4,500 per tonne cfr Singapore and has increased by 55% to USD7,500/tonne in May.
Indonesian cloves prices were at USD6,020/tonne this May, unchanged from April and 34% more than last November.
The Indian spot fob turmeric price closed on April 28 at INR7,646 per quintal (USD103/quintal) at the Nizamabad market (Telangana state, South Central), down from INR7,726/quintal on 26 March.
Average prices of Chinese natural honey exported in Q1 2021 were USD1,870 per tonne fob, 4% down year-on-year.
Among top 10 destinations, Chinese honey to Japan in Q1 2021 was sold at the highest price of USD2,200/tonne.
The Indian cumin seed fob spot price closed at INR14,000 per quintal (USD195.3/quintal) on 10 May at the Jodhpur market (Rajasthan, North West), unchanged from 12 April, but far from INR14,825/quintal reached on 7 April.
Forward view
– Traditionally, cloves prices should fall in October, when the Madagascan harvest is around the corner, but most market participants estimate the global supply will be between 50-60% less than average, leading to a long-term bullish scenario.
– Indian demand is expected to be strong as the country’s own cloves crop is down and material is needed for the festival season.
– Honey demand has been boosted in part due to lockdowns and people working from home so it remains to be seen whether this trajectory will slow to any extent as some of these consumers get out of their home more and/or return to their offices.
(IHSmarkit)
