First in this report must come Asia, the source (and consumer) of many spices, much hardship, and relentless unrest. Black Pepper crops in India, Indonesia, and Malaysia were average-to-above-average in size, but farmers in Indonesia harvested their berries too early so much of the crop is not American Spice Trade Association (ASTA) quality (the standard for sale in the U.S.) Why would they do this and render their pepper less valuable? Well, apparently the economic situation in Indonesia is so bad currently that these farmers were afraid that if the berries were left on the vine to ripen properly, they would be stolen, since everyone in that part of Indonesia knows when the pepper crop is ready. I suppose it's hard for Americans to imagine people stealing something that's literally free on every restaurant table in America, but life is different (and probably much harder) there.
As for India the crop was good but speculation has kept the price up in the rather wild Cochin futures market. There the contract size is so small (only 2.5 metric tons) that almost anyone can be a speculator -- and they are. It is said that the only thing a speculator in India likes better than making money is watching his competitor lose money so, as each month's delivery date comes around, the speculators that are short (i.e. have bet that the price would be cheaper at month's end) are squeezed into paying higher prices by those that are long (i.e. have pepper to sell). Each month becomes another little economic war. As this goes on in India the Indonesians and Malaysians are starting to sell under the Indian price so this little war turns international in scope.
White Pepper continues very strong, but for how long is problematic. The crop is reported fairly large but Indonesia has little competition in this commodity and farmers are loath to sell their pepper for a very unstable Rupiah. They seem to be selling only enough to cover current expenses and then holding on to see what happens next to their currency, their government, their economic situation, their whole country. Many exporters are ethnic Chinese whose situation is personally precarious from time to time and this lends more confusion and another unknown to this market. Prices have very recently begun to moderate but it is not known whether this is a response to a larger-than-previously-thought crop to market, a need for hard currency (pepper, like oil, is denominated in U.S. dollars), or just the natural exporters' impulse to do some business. The next couple of months should be very interesting.
Later-harvesting Mediterranean crops such as Cumin, Laurel, Oregano, etc., are still a question mark at this time with the push-and-pull struggle between buyers and sellers just starting up in full swing so tune in to the next Market Report for an exciting update. One interesting item from Turkey: Anise Seed is mostly sold domestically to the government liquor monopoly that produces raki, a popular anisette-like liqueur much loved by Turks and much reviled by most others. Well, there's an election coming this year and the farm vote is very important to the current government in maintaining their majority, so they are paying outrageous prices to the anise farmers to assure their electoral loyalty, we assume. At any rate, prices are much higher than a simple analysis of supply and demand would lead one to believe.
Another area of interest is the once-again chaotic Balkans. As this is written there are riots in the streets of Tirana, Albania and an active "little" war in Kosovo between the Serbs and the ethnic Albanian residents of this always contentious area. Even a few years ago when all the trouble seemed to be in Bosnia we were warned by our correspondents on the scene that the "real" war was coming -- and it would be in Kosovo. Another pathetic and potentially tragic reason to stay tuned to the ABC/HRF/AHPA/KHL Market Report on Herbs & Spices.
Botanicals: These markets remain very active, as we predicted in our last report. Faithful readers (both of you) will recall that the problem discussed was one of stagnant or even reduced supply just at a time when demand is exploding, especially in the U.S. Since we wrote our last Market Report there have been attempts here and elsewhere to meet demand, but efforts have been spotty and often less-than-successful from a quality standpoint. In fact, these efforts have sort of backfired, interestingly enough. Apparently, throughout the winter and early spring, everybody everywhere was scrambling to book up supplies of St. John's wort and certainly beaucoup St. John's wort was gathered. Unfortunately, this led all gatherers to ignore almost everything else in an attempt to cash in on what seemed like a gold rush. Consequently, many other usually common items are in very short supply this year and prompt coverage of buyers' requirements is certainly urged (and may be urgent). Anoth er consequence of this mania is a probably temporary glut of the aforementioned St. John's wort while manufacturers wait for the consumer sell-through (or whatever it's called). Now might be a very good time to book some up for the future, assuming, of course, that in this fickle market this product has a future. Once again we must repeat our caution (ad nauseum) that in many instances we have seen inappropriate, carelessly harvested plant parts marketed or whole fields with delicate ecologies decimated. The very interesting article on botanical quality, or at least botanical identity in the Los Angeles Times, in early September may be just the tip of a Titanic-sized iceberg heading our way. The usual "hot" herbs are, of course, in very short supply and this will not change soon -- vigilance is one price of admission to this hot market. Interesting products, interesting problems, interested consumers and media equal interesting markets.
Potpourri items: Same as last report -- qualities good, prices cheap, exporters desperate to sell. We are now at the start of the season and it looks pretty lackluster again. Thorough investigation by your faithful correspondent (one trip to a large International Gift Show) reveals that consumers would apparently rather fragrance their homes by burning candles, for God's sake, while these lovely little beauties of the botanical world languish in warehouses all over India. Will this worm turn? Probably -- and probably soon. If anyone cares they should buy now.
Article copyright American Botanical Council.
By Peter Landes