Madagascar Overtakes Indonesia in a Race for the Leading Clove Exporter in 2021

Whole Clove

Madagascar

Indonesia

Supply Chain Management

Published May 24, 2022

Madagascar returned to the world’s leading clove exporter status in 2021. Its exports surged to 21,200 mt last year, up 43.5% YoY, thanks to higher domestic output. Indonesia’s exports, on the contrary, dropped to 20,140 mt in 2021, down 60% YoY, as adverse weather conditions severely affected the crop. Because of the supply shortage, Indonesia has been buying cloves from Africa to meet strong local demand.

Madagascar’s clove production rebounded in 2021, with favorable weather conditions during the clove tree blossoming, allowing yields to increase. Although there are no official crop figures for 2021-22, the harvest could vary from 17,000 to 19,000 mt, up 5,000 mt from a year earlier. Adequate carry-over stocks and high output have boosted the export potential of the local spice sector.

A substantial fall in Indonesian clove production in 2021 made importers turn to other suppliers, including Madagascar. Indonesia’s crop was severely affected by La Nina, which brought torrential rains and excessive moisture levels and damaged the local harvest. Tridge representative in Indonesia, Yun Primawan, stated that adverse weather conditions had also affected the crop quality, resulting in lower amounts available for exports. Additional COVID restrictions in the country also resulted in a lack of labor for harvesting.

According to official data, Indonesia’s clove production totaled 135,700, down 7% YoY. However, some market operators estimated production below 130,000 mt. With domestic consumption at 110,000 mt, 80% of which is for the tobacco industry, 20,000 mt remain for exports.

Source: ITC Trade Map

Indonesia shipped most of the volumes in January-April 2021 when the country still had old-crop stocks. The poor harvest in July-September last year capped clove exports in H2 2021. With diminishing production, Indonesian tobacco manufacturers rushed to stock up with the spice to secure sufficient reserves. It caused the local demand to increase, triggering price surges in domestic and export markets.

Madagascar exported 43% of all the volumes in October-December 2021, when the country’s clove season was in full swing and the fresh crop entered the market. The trend continued in January and February 2022, when the African country shipments exceeded 12,300 mt of cloves.

India has been actively stocking up cloves from Madagascar in 2021-22, substituting Indonesia’s commodity. Ample supplies allowed Madagascarian traders to offer cloves USD100-200/mt cheaper than Indonesian exporters this season. Apart from that, when exporting to India, Madagascarian commodity is not subject to import duties, while Indonesian clove is subject to a 5% import tariff.