Weak demand has pulled down the price of cloves in the Indian markets as stockists resorted to hand-to-mouth buying.

“The prices fell to ₹500 a kg from ₹800 a kg following a drop in sales due to slow consumption. Big stockists are out of trade after demonetisation, which has created a cash crunch, hitting the cloves trade hard,” Dhirish Momaya, a Bangalore-based cloves dealer, told BusinessLine .

International markets, too, have fallen from $10,000 per tonne to $7,000. New crops have started trickling in.

Production in Comoros is estimated at 4,000 tonnes, Madagascar 15,000 tonnes and Zanzibar 3,000 tonnes, he said.

The new crop in Africa is big. But Sri Lankan and Indonesian crop this year is projected to be small, he said.

“Large cigar companies are not buying, so world markets are weak and sluggish,” he said.

However, “we foresee markets here moving up after December/January when buying in India starts”, he added.

Imports

India remains a net importer of cloves, with the country bringing in 17,095 tonnes valued at ₹869.70 crore in 2016-17, according to Spices Board sources.

The fall in indigenous production continued due to vagaries of weather and drop in the area under the crop.

The Indian output in 2016-2017 is estimated at 1,220 tonnes from a total area of 2,350 hectares, according to official statistics.

Of this, 1,000 tonnes come from the 1,050 hectares of plantations in the Kannyakumari district of Tamil Nadu, said Muthu Subramanian, Secretary, Maramalai Planters Association.

He said the next crop would be only 20-30 per cent of the 2017 crop due to erratic south-west monsoon this year.

Headded that the prices in the major trading hub of Nagarcoil has dropped to an average of ₹600-₹700 a kg for good- quality produce.

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