The local cloves market in Madagascar has been bullish of late due to adverse weather, Gregoire Courme of French trader Aromatum reported today.
Courme explained that he returned from a business trip to Madagascar 10 days ago. “This was a very interesting trip because the rains finished the day before my arrival,” he revealed. “All shippers confirmed: the weather conditions have been cold and wet during October, which is unusual for the season. This is certainly a consequence of El Niño.”
Courme added that the market was bullish, because a lot of shipments have been postponed due to the bad weather.
“In fact, all the Malagasy shippers sold short at the start of the crop, because it was expected to be pretty good, this year. Unfortunately with the rains of October, collectors could not deliver the requested quantities. So the local price started to increase. At the end of last week they had increased by 55% compared with ones at the start of the crop,” he stated.
The other consequence of the heavy rains is the colour of the cloves, which is darker than usual. Even if some shippers said that the quality is good, the appearance of the cloves is similar to that of 2013. Nevertheless, most of the qualities seen were clean.
However, with effect from early October, the Malagasy government cancelled the obligation to make a quality inspection before the shipment, early October. A few Chinese and Indian shippers based locally took the opportunity to ship wet and bad cargos, Courme observed.
“So I am convinced that some buyers will be disappointed when the containers will arrive. I hope that the Malagasy authorities will understand very soon their mistake,” he warned.
Courme stressed that Aromatum continues to make quality inspection at each shipment to avoid trouble on arrival.
Since this weekend, the price rise seems to have finished and Courme expressed hopes that the export prices would stabilise soon. Currently, the Malagasy CG3 standard is around USD8,900 per tonne c&f, which means that Comoros cloves become competitive again.
“I do not think that the price will drop in the coming months,”.