Cloves and Black pepper on the move

October 24, 2014 • black pepper • cloves • market news

Black Pepper

Vietnamese Pepper, normally bought for it’s cheaper cost compared to Indian Black Pepper, has been falling gradually in price. Prices have dropped nearly 20% in the last few months.

Brazilian Black Pepper, a fairly new cultivator in the market, has shown new promise. Supply has been up and prices are very competitive this season. We will try it out and report back! However, at the moment, quality is not so great – many goods are unclean, similar to black pepper crop in Madagascar that we frequently hear complaints about.

Indian crop has been good this season too, in larger quantities, which is where most of the market strain is coming from. India is traditionally the most flavourful but also the most expensive variety of Black Pepper. With greater supply this season, prices are lower than usual, and some buyers are waiting to see if it’s worthwhile to buy Indian crop as opposed to weaker Vietnamese / Brazilian or other varieties.

Cloves

Cloves are in an interesting place currently. Prices have fallen, and at the same time, consuming markets have not imported in large quantities – so they will be ordering sometime soon. There is a small deadlock between factories, farmers and customers as a result. The one who requests first, has everything to lose by showing their cards.

In the last six months, supply of Cloves has decreased dramatically, but purchases have not increased too much as a result. There is severe speculation in the market, as all origins including Madagascar, Comoros, Zanzibar (our Origin of choice), Sri Lanka and Indonesia have all had low supply. Speculators are waiting until large customers and buyers around the world begin to place order for new season, at which point they will also gradually release their positions.

India has also been consuming very little cloves recently. Unlike most years, very low quantities were imported into India (300 tons / month instead of previous 800 tons+). Sellers in local markets are able to clear all their goods, but are not purchasing to restock in the same quantities as before. As a result, stocks have dropped to very low levels.

We expect prices to rise rapidly soon once buyers crack and place orders for the new season.