SUPPLY flows of cloves leaf oil from Madagascar remain extremely limited, reflecting the underlying situation on cloves themselves.
Emmanuel Nee of French trader Sivanil said new distillation was still going slow and was a bit late, “but at least new distillation happens”.
He added that the pipelines were far from being full but his contacts in Madagascar were reporting they were receiving cargo at the slow rate of 10 to 15 bush drums a week. “Therefore it’s rather impossible today to get offer from origin for one full containerload of 80 drums. Most of the shippers – even the larger ones – prefer to work step by step on 40 drums loads,” he said.
This trend was expected to last until June. Mr Nee speculated that there was likely to be a decrease in production in June while rice cropping was done and the good flow of cloves leaf oil should come by July, which would be around three months later than usual. This supply would then decrease just before the clove crop due in September or October, he suggested. This would mean the possible loss of three months production to feed the international market for clove leaf oil.
It was also felt that with the Madagascar cloves crop forecast to be another good one it would not be surprising to see the production of the oil not being as good as expected, as has been the case in other recent years of a favourable output of the cloves. “As usual, have to keep an eye on the Indonesian stuff too,” Mr Nee added.
Noting that the clove leaf oil market was always very closely correlated to the clove market, Mr Nee remarked: “As long as the clove market remains rather high, we’ll be far from seeing the clove leaf oil prices as low as they were over the last years and I fear the better the clove market will be for farmers, the less production of clove leaf oil we’ll get for export.”