The indonesian production
An estimated 4 000 – 4 500 T produced and exported by Indonesia on this campaign in 2012 instead of 3000 T standard. The impact was direct on market prices which decreased from USD 17-18 early in the season to 12.5 USD / KG currently for full Container. Indonesia is now in the end of the season of leaf essential oil in May and June is going to stop to offer.
As expected, the distillations were slow to resume this year as producers have win money on cloves spice during the previous season. Currently, we can estimate that there are around 40-50% distillation units that are unoccupied. This lack of enthusiasm for this product is explained as:
– The clove crop to come being announced as very good (lots of buds) and relatively early, the producers do not want to jeopardize this by cutting back future financial and distilling too much leaf
– There are still very large stocks in the bush, particularly through large collectors who have speculated on the rise. The postponement of the stock is estimated at 100 T is around 16 USD / kg, which is currently off the market … these operators expect an increase of the prices when Indonesia will no longer be in a position to offer
– The prices offered by producers remain high and are not currently interest in the market (around 15 USD / Fob full tc). Very few exporters are positioning themselves now on the product.
Currently, the prices drop a little each week but this movement will stop fairly quickly because production will stop in June with the rice harvest, and between August and November with the cloves crop. Then resume the distillation end of the year with a market price which could be between 15 and 16 USD / kg.