Special Issue

Indonesia is known as the major producer of cloves in the world contributing to 72% (2017) of global production. Other countries which also produce cloves albeit in smaller quantity are Madagascar (contributed 12% of global production), United Republic of Tanzania (5%) and Sri Lanka (4%). Indonesia is known internationally for producing high-quality cloves. In Indonesia, many cloves are cultivated in East Java (Pacitan), South Sulawesi Province (Luwu Regency, Bulukumba, Sinjai, Wajo, Bone, Enrekang, and Tana Toraja), Maluku Province, Southeast Sulawesi Province (Tolitoli Regency), and Central Sulawesi Province. Indonesia consumes most of their cloves' product domestically with the highest consumer being the cigarette/kreteks manufactures which are one of the most important sources of tax revenue.

Most of the clove production in Indonesia is intended as the raw material for the cigarette industry, not for spices. Clove as a raw material for cigarettes has caused the peculiarities of Indonesian cigarettes. The clove needs of cigarette industry are around 120,000 tons per year or absorb up to 90 percent of national production in 2018. Furthermore, cloves that are not used in the cigarette industry are used for other needs such as sold for spices.

Table 1. Area Harvested and Production of Cloves in Indonesia (1961 - 2019)



*Projection / Estimate Figures
Source: Food and Agricultural Organization, Central Bureau of Statistics Republic of Indonesia, & IPC Estimate

From 1961 to 2017, cloves production in Indonesia showed an increasing trend. A significant increase was seen in 1978 with the production of 21,554 MT up to 1988 with a production of 81,224 MT, recording a production increase of 377%. The increase in cloves production in this period was due to the high interest of the farmers in cloves cultivation. This can be seen from the increase in the area of cloves plants which increased by 350% from 1978 to 1988. Furthermore, a quite high increase also occurred in 1998 to 2002, during which period cloves production in Indonesia was reported to increase 118%. Then, the increase in production which was also reported to be quite high in 2010 to 2015, in this period the increase in cloves production was reported to reach 142%. The increase in production in 2010-2015 was caused by the amount of land planted with cloves which also increased by 167%.

In 2018, clove production in Indonesia is predicted to increase slightly. In the following years clove production in Indonesia is also predicted to continue to increase. In 2018, clove trade in Indonesia showed a positive impression. Clove production in Indonesia has been absorbed by the domestic cigarette industry, then cloves that are not used in the cigarette industry are exported to various countries. Clove demand from countries in Europe and the Middle East also continues to increase. One of the Middle Eastern countries that ordered a lot of cloves from Indonesia in 2018 is Egypt. Egypt reportedly bought cloves from Indonesia with a quantity of 15 MT with a value of US$ 99,000. Although countries in the Middle East such as Egypt, Saudi Arabia, and Jordan have been Indonesian spice export destinations for a long time, the future is optimistic that there will be an increase due to increased clove production.

The climate in clove production centers in 2018 is also reported to be quite good so that clove plants can flourish. The Director of Seasonal and Spice Plants of the Directorate General of Plantation of the Ministry of Agriculture of the Republic of Indonesia said that this year's clove production is estimated to reach 130,000 MT. If the weather climate of 2019 is similar to this year, the production could return to around 130,000 tons, but with better quality.

The Ministry of Agriculture of the Republic of Indonesia also continues to support increasing clove production in Indonesia through various programs. This year the Ministry of Agriculture of the Republic of Indonesia will distribute clove seeds to clove farmers in various production centers. Furthermore the productivity improvement program will also be carried out by providing training to farmers and other technical assistance. To prevent the decline of clove production in Indonesia, the Ministry of Agriculture of the Republic of Indonesia will also carry out several programs to deal with clove stem borers which are reported to be able to reduce clove production quite large.

The Ministry of Agriculture of the Republic of Indonesia plans not to open new garden for clove crops in the next few years. Currently Indonesia is focusing on increasing the productivity of existing gardens. Based on productivity data, cloves in Indonesia have fluctuated productivity from 1961 to the present. The clove productivity trend in Indonesia is seen to decline from year to year, although in certain years it has seen an increase. On that basis, the program to increase clove productivity in Indonesia will be one of the priority programs in the next few years.

Table 2. Clove Productivity in Indonesia (Kg per Ha)



*Projection / Estimate Figures
Source: Food and Agricultural Organization, Central Bureau of Statistics Republic of Indonesia, & IPC Estimate

As one of Indonesia's mainstay spices, cloves from Indonesia have been exported to various countries in the form of whole cloves and crushed cloves.

Table 3. Export of Whole Cloves from Indonesia



* in MT ** in Thousand US Dollar
Source: Agricultural Commodity Export-Import Database, Ministry of Agriculture of the Republic of Indonesia

Table 4. Export of Crushed Cloves from Indonesia



* in MT ** in Thousand US Dollar
Source: Agricultural Commodity Export-Import Database, Ministry of Agriculture of the Republic of Indonesia

In 2016, Indonesia exported 12,755 MT of cloves consisting of 11,833 MT whole cloves and 921 MT crushed / ground cloves. Exports in 2016 were reported to reach US$ 41.6 million. Furthermore, in 2017 Indonesia exported 9,089 MT of cloves consisting of 8,673 MT of whole cloves and 414 MT of crushed cloves. Exports in 2017 are reported to have reached US$ 28.9 million. When compared to the previous year (2016), the export of cloves from Indonesia declined by 29% in quantity, and 30% in value.

Table 5. Total Export of Clove from Indonesia

Furthermore, in 2018 Indonesia exported higher amounts of cloves than 2 years ago. As of November 2018, Indonesia had exported 16,124 MT consisting of 15,191 MT whole cloves and 931 MT crushed cloves. The export value in the period was reported to reach US$ 82.3 million. When compared with exports in 2017 for the same period (as of November), then in 2018 cloves exports from Indonesia recorded an increase of 90% in quantity and 209% in value.
When compared with other spices such as pepper, clove exports are not as much as pepper exports. However, the value of clove exports is quite high and its value also has an increasing trend. Indonesia as the world's largest clove producer has a big role in determining clove prices in the world. Unlike pepper, although pepper production in Indonesia is quite high, Indonesia must compete with other pepper producing-countries such as Viet Nam, Brazil, India, Sri Lanka and Malaysia in determining pepper prices.

Table 6. Comparison of Exports of Pepper and Cloves from Indonesia



Source: International Trade Centtre, Geneva

In 2016, the average export price of whole cloves from Indonesia was US$ 3,182 per MT. The highest average price in the year was known to occur in October with a value of US$ 4,721 per MT, while the lowest price occurred in May with a value of US$ 1,907 per MT. Furthermore, in 2017 the average price of whole cloves exports from Indonesia reached US$ 3,263 per MT, recording a 3% increase from the previous year. In 2017, the highest export price for whole cloves was reported in September, with a value of US$ 5,439 per MT, while the lowest average price was reported in June with a value of US$ 1,635 per MT.

Table 7. Average Export Prices of Cloves from Indonesia (US$ per MT)



Note: Computed from division of export value by the export quantity

In 2018 (as of November), the average export price of whole cloves from Indonesia increased considerably from the previous year. The average export price of whole cloves in 2018 was reported to reach US$ 5,092 per MT, recording an increase of 59% from 2017 in the same period.

The average export price of crushed cloves from Indonesia in 2016 was reported to be US$ 4,483 per MT. Furthermore, in 2017 the average price increased to US$ 6,780 per MT. In 2018 (as of November) the average export price of crushed cloves from Indonesia continued to increase to US$ 9,308 per MT. When compared with the same period in 2017, the average export price of crushed cloves from Indonesia increased by 29%.
Based on the port of origin, the export of cloves from Indonesia in 2018 was mostly shipped from the Port of Tanjung Perak (Surabaya, East Java). As of November 2018, exports of cloves from Indonesia through Tanjung Perak Port reached 12,721 MT. Beside Tanjung Perak, exports of cloves from Indonesia were also carried out from Tanjung Priok Port (1,525 MT), Tanjung Emas (1,049 MT), Belawan (553 MT), and other ports. In addition, Indonesia also exported cloves through air shipping, such as through Juanda airport, Soekarno-Hatta airport, Ngurah Rai airport, and Kuala Manu Airport.

Table 8. Export of Cloves from Indonesia Based on Port of Origin in 2018* (MT)



Source: Agricultural Commodity Export-Import Database, Ministry of Agriculture of the Republic of Indonesia

Cloves from Indonesia are exported to various countries in the world. In 2018 (as of November), 15 top countries that imported cloves from Indonesia are Viet Nam with a quantity of 4,058 MT, followed by India (3,053 MT), Saudi Arabia (1,567 MT), Singapore (1,380 MT), Pakistan (1,339 MT ), and other countries. Based on its export value, up to November 2018 Indonesia has exported clove worth US$ 11.8 million to Viet Nam, US$ 15.4 million to India, US$ 12.9 million to Saudi Arabia, US$ 9.1 million to Singapore, and US$ 6.2 million to Pakistan.

Table 9. Country Wise Cloves Export from Indonesia in 2018* (MT)




Source: Agricultural Commodity Export-Import Database, Ministry of Agriculture of the Republic of Indonesia

In Indonesia, clove is produced in various regions both on the Java and other islands. Farm gate prices of clove in these areas are also different. At the 3rd and 4th weeks of November 2018, the average farm gate prices of clove in local currency are reported to be IDR 88,035 per Kg. The highest prices are in North Lampung, Kuningan, Bima and Sinjai Regencies with a value of IDR 100,000 per Kg.

Furthermore, in December 2018, the average farm gate prices of cloves in local currency are reported to be IDR 87,472 per Kg. In this period, the highest farm gate prices were reported to be IDR 100,000 per Kg in Kuningan Regency and Bima Regency. In the first 2 weeks in January 2019, the average farm gate prices of cloves were reported to be worth IDR 85,887 per Kg. The highest price in this period was reported to be IDR 85,887 per Kg, in the Trenggalek Regency.

Table 10. Weekly Average of Farm Gate Prices of Cloves in Indonesia (IDR per Kg)



Source: Agricultural Commodity Price Information - Ministry of Agriculture of the Republic of Indonesia

In dollar terms, the average farm gate prices of cloves in Indonesia at the 3rd and 4th weeks of November 2018 are reported to be US$ 6,061 per MT. Furthermore, in December 2018 the average farm gate prices of cloves in Indonesia are reported to reach USD 6,028 per MT. In the first 2 weeks in January 2019, the average Cloves farm gate in Indonesia was reported to be US$ 6,025 per MT.

Table 11. Weekly Average of Farm Gate Prices of Cloves in Indonesia (US$ per MT)

Since the first week of October 2018 to the second week of January 2019 spot prices of clove in New York (USA) have been reported to be stable. Hand-picked clove from Sri Lanka / Indonesia has the highest price, which is US$ 14,112 per MT. The other clove from Madagascar / Comores / India / Brazil was reported to be US$ 9,923 per MT. While for clove stems, it was reported that US$ 1,742 per MT.

Table 12. Spot Prices of Clove in New York (USA)



Source: A.A. Sayia & Company

Note: