Spice Reports
Summer 2007
2007-2008, A Tough Year for Spices
The Spice crops this year are all susceptible to global weather issues and changes. The weather in the Eastern Mediterranean is the hottest on record this summer, which will effect the Anise, Oregano and Cumi markets in a major way. Chilies from India and China will also be shorter due to weather conditions. Demand for Spices world-wide is increasing, and the farming and collection of Spices has not been keeping pace with the demand. We are also looking at new crops for the energy/fuel industry that are taking up farmland that's traditionally used for Spices. this is happening to a large degree in Brazil for the Pepper and Paprika crops. The Western United States, where Onion and garlic crops are being produced, have a record number of farmers moving to the more lucrative Bio-fuel crops.
On the political and economic front, we are seeing a large push on quality and safety of the food supply. this will keep pressure on the industry to understand the lines of supply of their products, and not base buying decisions on price only. The U.S. dollar has also been weak against most currencies world-wide. As we speak, the Euro is at an all time high against the dollar, and the Indian Rupee is 8% stronger than in January. This will increase our costs across the board. The price of oil continues to strenghthen, which will keep our shipping costs above the last few years as well. On the positive side, a lot of work is going into improving the quality of Spices. We have the safest Spices ever in the market at this time.
Anise Seed
We are seeing major problems on the new crop of Anise Seed. The weather has been so hot in the Eastern Mediterranean that crops have failed to grow in both Turkey and Syria. We will see very little relief until new crop in 2008. Most of the Turkish Anise is controlled by the government for alcohol production. Syria is a major supplier to the U.S. market, and will be hard pressed to meet demad. We will see prices move up over the next few months.
Black Pepper
The cost of Black Pepper has been slowly moving up. Vietnamese Pepper dealers have been holding onto their stocks, which has created the movement upwards. Malabar, which is from India, has been bought on the market dips. with the U.S. Dollar versus the Indian Rupee showing an 8% premium from January 2007 until today, Pepper will remain expensive. The other origins of Lampong and Brazil, have not been as active as in previous years. Stocks in the U.S. aren't very high, so keep an eye on your position.
Coriander
Canada is reporting very good yields on their 2007 Coriander crop. However, unfortunately the issue is that only 40% of the 2006 crop was planted this year, so we expect prices to move up around 25% over last year's. The main reason for crop reduction is the demand for Bio Fuels from organized and sustainable crops, which as encouraged farmers to product crops for this non-traditional energy market. California is expreiencing the same problem in the Onion and Garlic market, which as reported acreage loss due to the energy growing crops.
Cumin
The price of Cumin has been steadily rising all year. Syria had been expecting a new crop of nearly 50,000 metric tons, and India expected a crop of over 30% above 2006 levels, so we saw the chance of prices to decline. Unfortunately, the weather came into play. Heavy rains in March and April devastated the new Indian crop with the expectation of now only 75% of the 2006 crop. Because of both the excessive rain and heat in Syria, their crop is now expected to be only 25,000 metric tons. Other origins, such as Turkey and Iran, are not expected to have any extra material for export. We will certainly see a decline in quality, and volatile oils will be lower.
Fenugreek
India is reporting a smaller crop, which will certainly push prices higher. India produces the majority of the commercial Fenugreek used around the world. The product also grows in Turkey and Morocco, but exports are small from these origins. The prices on Fenugreek has not moved much in the last 20 years, so many farmers in India have been moving to more lucrative crops. The quality of Fenugreek we have seen this year has been very good. We do not expect prices to drop in 2007.
Onion
As stated above, land traditionally used for Onion has moved to Corn and Soy crops for the energy industry. They are willing to pay more for their raw material, leaving less land for Onion. Demand for domestic (USA) Onion has been growing in recent years from the decline of the 1990's. However, because a lot of the California production capacity hsa been closed down over the last 15 years there are production issues for more product. Other origins, such as China and Egypt, have all experienced capacity issues with growing demand for dehydrated Onion.
Parsley
The new crops are in both California and Israel. The crops are average, and we have seen prices drop from the highs earlier this year. The problem we see is there is no carry over from 2006, and the new crop cannot meet all of the demands for Parsley through the ened of 2007. There has been some relief from Egyptian Parsley production, but not everyone can use this material yet. It is a good idea to try and get this origin approved as it may be all that is available at the end of the year.
Thyme
As the heat is the theme of this newsletter, Europe is also experiencing problems from it with their new crop of Thyme. Spain and Morocco are both reporting smaller crops with the demand increasing across the globe, so we will certainly see prices increase. The quality, however, is looking very good on the Spanish this year. The issue will be the crop size, and we are still waiting to hear how small the crop will be. We will keep you posted in the future newsletters.
Turkish/Greek Oregano
Due to the extreme heat in Greece and Turkey, the local collectors have not been going out to collect Oregano, which is found at higher elevations. The plants themselves are much smaller than the usual due to the lack of moisture. This is the 3rd year in a row that we have seen these extreme heat levels, so the Oregano collectors are looking to do other things to bring in income. The quality this year will very likely go down, with prices also expected to increase. It is recommeneded that you take purchasing coverage through June 2008.
White Pepper
Prices for imported White Pepper are moving higher. The Indonesian White Pepper Muntok dealers are not pushing to sell in this market. They are getting good demand from China and Japan, and China is consuming far more White Pepper with the new demand for western foods. Quality of White Pepper from Vietnam is also creating a problem. the color is not as good as that produced five years ago, and the taste is not as smooth as Muntok, or Sarawak (Malaysia).