The following is quoted direct from Tripper – Indonesia

Cinnamon:
Prices began moving up during Q4 of 2012 and appreciated almost 15% before stabilizing in April of this year. Since then we have witnessed a slight correction (- 2 %). With the rainy season coming to an end, it is unlikely prices should rise again and unless there is a sudden strong demand for bark, prices should keep falling another 2 – 3 %.

Nutmeg & Mace:
North Sulawesi and the neighbouring islands of Siau and Sangihe account for around half of all Indonesia’s exports. The volume of exports is estimated at around 3,500 MT in 2012 but exporters feel volume could drop by as much as 500 MT in 2013, mainly due to quality issues (EC restrictions related to Aflatoxin levels). Prices have been quite stable over the last 6 months.

Cloves:
After soaring up to US$ 28/Kg back in 2011, prices have shown more stability hovering between $12-13 US per kg. Clove traders would like to drive prices to US$ 15/Kg but local cigarette companies combining sufficient inventory with wise purchasing strategy have so far made all the right moves and prices have remained stable. A lot will now depend on the upcoming crop, which will run from May through September

 

Vanilla:
After years of depressed prices, vanilla is finally appreciating itself. In recent months, we have witnessed a sharp increase in prices due to low stock availability. Shippers in Madagascar have had real problems getting the necessary volume needed to fulfil their contracts and therefore have started a local bidding war that has resulted in a price increase of more than 100%. The good thing is that the vanilla prices were so low that today’s increased prices are still within range. Our past experience is that when vanilla was around $50 US/Kg we saw an interest from a lot of different origins to grow and the quality then improves. The 2012 Madagascar crop has now been all sold and we are going to have to wait until the 3rd quarter of this year to see any new crop. Even though every vanilla report for the past 5 years has predicted this price increase, we have seen a reluctance from buyers to commit early, which might cause them to resort to buying on the spot during summer at high prices. This sharp increase in Madagascar has obviously had impact with other origins. Indonesian, speculators that had taken a position a few years back have now started moving some lots but the quality is poor and the flavour is bad (vanilla traders in Indonesia often play with cloves and store the 2 commodities in same warehouse, therefore affecting the vanilla’s flavour). With higher price we hope that PNG will be back in the game. It’s our belief that within the next few months buyers will pressure their suppliers to ship early, creating a negative impact upon the crop. We predict an initial of 20% increase from today’s price that will stabilize itself if the crop can fulfil all its contracts. We can see two potential Jokers to stabilize the price: Inventory in Europe still estimated at over 500MT will start being offered, which will ease the pressure. With Indo/PNG’s high quality in the fifties, these two origins will be pulled back in the game. PNG has been really quiet these past 5 years, but the vines are still very healthy and could easily come back in the market with a huge crop if the price is right.

Conclusion
Vanilla prices are currently at ideal level for us to see farmers and shippers around the world motivated tending to this complicated trade. Stable vanilla prices ultimately means good news. The worst that could happen now is that prices start spiralling out of control and further damage this delicate trade.

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Andrew Barker

An international food broker, with main activity in spices and herbs.