SESSION 1 Crop and Market. World Spice Congress 2012 PUNE NUTMEG. Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

Transcription

1 SESSION 1 Crop and Market NUTMEG World Spice Congress 2012 PUNE Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

2 Objectives of this presentation Answer to your questions What is the Nutmeg global market? Why has the price gone up so much and how is the future price? How can the Aflatoxin risk be controlled? Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

3 Sources of information and Disclaimer Sources of information FAO FAOSTAT GTIS "World Trade Atlas IMF "Primary Commodity Prices" Indonesia National Basis Data of Nutmeg Production ITC (International Trade Centre) GRENADA NUTMEG SECTOR STRATEGY Spices Board India Suppliers (PT.VOX TRADING INDONESIA, MPB) UN "comtrade" UN, World Population Prospects Disclaimer The information contained in this presentation has been prepared in good faith by VOX TRADING CO.,LTD. However, no representation or warranty, expressed or implied, is made as to the accuracy, correctness, completeness or adequacy of any statement, estimates, opinions or other information contained in this presentation. Different information sources may provide different figures from what are presented in this report. This presentation contains some conjectures which were made in good faith by VOX TRADING CO.,LTD. to fill unavailable information. Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

4 Table of Content 1.Overview of Global Nutmeg Market 1-1.Suppy and demand 1-2.About producing countries 2.Price 2-1.Historical price 2-2.Reasons of crazy price 2-3.Future forecast 3.Aflatoxin 3-1.How Aflatoxin contaminates into Nutmeg. 3-2.Approaches to control Aflatoxin risk. Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

5 1.Overview of Global Nutmeg Market 1-1.Suppy and demand Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

6 1-1.Supply and demand Global Nutmeg trading volume including Re-export from Trading countries is about 18,000 tonne. Direct export from producing countries has been increased and trading countries lost their share. GLOBAL NUTMEG TRADE (INCLUDING RE-EXPORT) , Tonne 19,688 Estimate ,316 18,561 6,105 6,575 16,093 4,717 17,637 17,935 4,585 4,824 4,246 16,674 4,113 17,319 3,772 18,740 3,995 16,954 17,829 18,108 3,239 3,497 3,768 18,863 3,361 TRADING COUNTRIES CAGR : -5.4 ( ) ,741 12,456 11,376 13,052 13,111 15,442 12,561 13,547 14,745 13,186 14,332 14,869 15,502 PRODUCING COUNTRIES CAGR : 2.3 ( ) Remark : -> Disclaimer Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

7 1-1.Supply and demand Indonesia, India and Sri Lanka increased. Grenada dropped after the Hurricane damage in 2004 and EXPORT FROM MAJOR PRODUCING COUNTRIES , Tonne Country & share CAGR Estimate ( ) ,741 12,455 1,714 11,375 13,052 13,111 2,298 2,031 15,443 1,944 1,287 1,242 12,561 1,435 13, ,570 14, ,723 1,544 13, ,460 14, ,315 14, ,774 1,952 15, ,375 1,950 Grenada India Sri Lanka , , ,200 1,529 1,509 1,193 1,653 1,576 1,710 1,503 1,589 1,403 Indonesia ,756 9,173 6,706 7,716 8,234 10,970 7,840 9,824 10,905 9,793 9,264 10,743 11, Remark : -> Disclaimer Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

8 1-1.Supply and demand Singapore lost its position as a trading center. Vietnam increased its volume because some companies started processing. BUT Vietnam has more important function as described later. RE-EXPORT FROM MAJOR TRADING COUNTRIES , Tonne , , ,446 3,533 4, ,174 4,820 4, ,254 2,556 4,243 4, ,869 1,291 3, ,294 3, ,201 3, Estimate 3,486 3,341 3, Country & share Vietnam United Arab Emirates CAGR ( ) ,826 2,266 2,231 1,919 1,756 1,838 2,085 1,915 2,188 2,029 1,781 1,836 1,800 Singapore Netherlands Remark : -> Disclaimer Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

9 1-1.Supply and demand Total market size of trading sector was about 115 million dollars in Europe is the largest market for Nutmeg. Vietnam has NO.1 share in volume as a single country. But less in value. MAJOR IMPORTING COUNTRIES Quantity 50% Value 50% ,938 Vietnam 9 10,318 Vietnam 13 2,431 Netherlands 15 17,795 Netherlands 10 1,774 Germany 16 18,432 Germany 10 1,755 United States 13 14,685 United States Italy 7 7,750 Italy Belgium 7 7,494 Belgium United Arab Emirates 5 5,541 United Arab Emirates France 7 7,866 France Malaysia 5 5,183 Malaysia Japan 5 5,680 Japan 23 4,233 Others 12 14,211 Others , ,955 Remark : -> Disclaimer Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

10 1-1.Supply and demand Hong Kong seems to be absorbed by Vietnam. Singapore lost its share. More direct import into European countries, where imported through Netherlands before. MAJOR IMPORTING COUNTRIES FROM PRODUCING COUNTRIES , Tonne Estimate , , , , , , , , , , ,18 6 Others , United Arab Emirates Singapore Malaysia Japan Italy Germany United States Netherlands Hong Kong 2000 Vietnam 0 Remark : -> Disclaimer Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

11 1-1.Supply and demand Vietnam imports about 4,150 tonne and export about 450 tonne. Does Vietnam consume such a huge amount of Nutmeg? WHERE SUCH A HUGE VOLUME OF NUTMEG GOES TO FROM VIETNAM? 2010, Tonne To Europe 315 Import about 4,150 Export about 450 Balance about 3,700 To Africa 90 From India 247 From Singapore 183 From Indonesia 3,691 Remark : -> Disclaimer Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

12 1-1.Supply and demand Some spice companies in China said, We are using Vietnamese Nutmeg. Major part of Vietnam's import-export balance may go into China through the boarder. Hong Kong lost its position as a entrance to China and was taken over by Vietnam. WHERE SUCH A HUGE VOLUME OF NUTMEG GOES TO FROM VIETNAM? 2010, Tonne To Europe 315 Boarder Trade to China about 3,700? Import about 4,150 Export about 450 Balance about 3,700 To Africa 90 From India 247 From Singapore 183 From Indonesia 3,691 Remark : -> Disclaimer Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

13 1.Overview of Global Nutmeg Market 1-2.About producing countries Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

14 1-2.About Producing Countries <Indonesia> Major producing areas of Nutmeg in Indonesia are North Sulawesi, Maluku and North Maluku, Sumatra including Aceh and Papua. Sumatra & Aceh Sulawesi Maluku Papua Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

15 1-2.About Producing Countries <Indonesia> Nutmeg as a spice is mostly produced in North Sulawesi, Maluku and North Maluku and Papua. Sangihe Talaud like Siau island in North Sulawesi is specially famous for high quality nutmeg. Siau Manado Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

16 1-2.About Producing Countries <Indonesia> Nutmeg produced in Sumatra including Aceh and other places like Java is used for extraction. Young fresh nutmeg is used for extraction. Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

17 1-2.About Producing Countries <Indonesia> Siau Island, producing about 2,400 tonne of Nutmeg with shell annually, has one of the most active Volcano in Indonesia. This volcano is the mother of high quality nutmeg. Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

18 1-2.About Producing Countries <Indonesia> Fresh nutmeg and mace is dried under the sun. If there is a sun, you may see sundry everyday in Siau. Matured fruits have been getting less and less because of Early Pick. Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

19 1-2.About Producing Countries <Indonesia> Farmer sells dried nutmeg with shell to Local Trader. Exporter removes shell. And separate into three grades, ABCD, SS and BWP. Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

20 1-2.About Producing Countries <Indonesia> Nutmeg production area in Indonesia has been increasing. Especially in North Maluku. Production area has been increasing at the average rate of 4% since [INDONESIAN NUTMEG] PRODUCTION AREA , ha CAGR( ) 4% 86, , , , , , , , , , , , , , , , , , , ,80 6 Others West Java North Sulawesi Aceh Maluku North Maluku 0 Remark : -> Disclaimer Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

21 1-2.About Producing Countries <Indonesia> Vietnam gained large share in a short period. US increased import from Indonesia as Grenada could not supply after the Hurricane damage. MAJOR DESTINATIONS OF INDONESIAN NUTMEG , Tonne Estimate , , , ,72 8 Others ,174 9,823 9,792 9,265 India ,870 7,661 7,755 6,706 7,717 8,232 7,840 Malaysia Japan United States 6,250 Italy 6000 Germany Netherlands 4000 Singapore 2000 Vietnam Hong Kong 0 Remark : -> Disclaimer Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

22 1-2.About Producing Countries <Grenada> Nutmeg is a traditional agricultural crop in Grenada. It was introduced to the British Colonies in Grenada Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

23 1-2.About Producing Countries <Grenada> Prior to Hurricane Ivan, the Nutmeg sector provides income to about 30% of Grenada s population of 100,000 inhabitants. And earned 22.5% of total merchandise export in FAO Nutmeg and derivatives Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

24 1-2.About Producing Countries <Grenada> Fresh Nutmeg is dried in shade. Not under the sun like in Indonesia. FAO Nutmeg and derivatives Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

25 1-2.About Producing Countries <Grenada> The Grenadian Nutmeg Industry was devastated by Hurricanes Ivan in Sep.2004 and Emily in Jul Ivan Emily Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

26 1-2.About Producing Countries <Grenada> About 90% Nutmeg trees were damaged by the Hurricanes. 40% of the damaged trees were toppled, 25% were injured, 30% were inaccessible and 5% died according to ITC report. Ivan Emily Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

27 1-2.About Producing Countries <Grenada> The production in 2006 was only 227 tonne, which was 92.43% less than that in And the recovery speed has been slow. [GRENADIAN NUTMEG] PRODUCTION , Tonne ,951 3,000 2,924 Ivan 2, ,202 2,430 2, Estimate Emily Remark : -> Disclaimer Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

28 1-2.About Producing Countries <Grenada> The number of seedlings in 2007 was about 15,000 and about 40,000 in Nutmeg tree bears fruit about 5-7 after planting. One tree produces up to 100kg of nutmeg per year. [GRENADIAN NUTMEN] NUMBER OF SEEDLINGS ,00 0 Ivan ,00 0 Emily Remark : -> Disclaimer Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

29 1-2.About Producing Countries <Grenada> After 2004, the Grenada stocks were gradually released. In 2008 all stocks were finally depleted. Netherlands remains the NO.1 destination. MAJOR DESTINATIONS OF GRENADIAN NUTMEG , Tonne ,016 2, ,294 2, ,715 2,031 1, ,435 Others Dominican Republic Estimate United Kingdom Brazil France Argentina Belgium Germany United States Canada Netherlands Remark : -> Disclaimer Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

30 1-2.About Producing Countries <India> Major producing areas of Nutmeg in India is Kerala. Kerala Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

31 1-2.About Producing Countries <India> Production area hit the peak of 16,400 hectares in The speed of expansion till 2008 was 11.2%. [INDIAN NUTMEG] PRODUCTION AREA , hectare Ivan CAGR( ) 11.2% 14,921 16,400 16,100 16, , , ,668 9,979 9,996 Emily Remark : Revised figures were calculated by multiplying the production area sizes of and the average yield of Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

32 1-2.About Producing Countries <India> The figures of about 11,000 tonnes may not be fully accurate since farmers are small and holdings fragmented and it is difficult to get accurate production figures in such circumstances. [INDIAN NUTMEG] PRODUCTION , Tonne Ivan ,564 11,217 11,362 11,271 11, ,208 2,593 2,723 2,914 Emily Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

33 1-2.About Producing Countries <India> UAE has been the major destination of Indian Nutmeg. Vietnam has also been another major destination. MAJOR DESTINATIONS OF INDIAN NUTMEG , Tonne , CAGR( ) 5.4% ,529 1,193 1,288 1,576 1,571 1,724 1,459 1,774 Estimate 1, Others United States Brazil Netherlands Singapore United Arab Emirates 0 69 Vietnam Remark : -> Disclaimer Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

34 2.Price 2-1.Historical Price Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

35 2-1.Historical Price Price has been moving up since 2007 as global stock getting smaller and smaller. In 2011, the bullish trend was accelerated because of shortage. PRICE OF NUTMEG FROM MAJOR PRODUCING COUNTRIES , USD/Tonne 16 Grenada India Indonesia Remark : -> Disclaimer Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

36 2-1.Historical Price Export price showed the same movement as Local price until May But Price of ABCD (and SS) suddenly jumped up in Jun.2011 because of serious material shortage. There were many delivery delays in this period. LOCAL PRICE OF NUTMEG IN INDONESIA Jan Jan.2012, Index (100 = the prices in Jan.2010) ABCD in US Dollar With shell in US Dollar With shell in Indonesian Rupiah Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

37 2-1.Historical Price In the last three years, the price went up to %. NUTMEG PRICE INDEX Dec EU Dec Latest month of Dec United States 155 Dec Latest month of Dec Japan 158 Dec Latest month of Dec Malaysia 246 Dec Latest month of 2011 Remark : -> Disclaimer Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

38 2.Price 2-2.Reasons of crazy price Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

39 2-2.Reasons of crazy price Demand has been continuously increasing both for spice and extracts. Supply dropped after Hurricane damage in Grenada, which made global stock depleted Hurricane Ivan hit Grenada Hurricane Emily hit Grenada. Early pick started in Indonesia. La Niña (-06) Climate change started in Indonesia. Eruption in Siau. El Niño (-07) La Niña (-08). SUPPLY & DEMAND (IMAGE) Supply Demand Carry over PRICE INDEX OF NUTMEG ABCD SINKING Grenada stock was depleted. Extractor in Indonesia started buying dried Nutmeg. Financial crisis El Niño (-10) Indonesia stock was depleted. Extractor started operation in North Sulawesi. Eruption in Siau. La Niña (-11) Serious material shortage in Indonesia. La Niña (-12). Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

40 2-2.Reasons of crazy price Nutmeg export volume showed same trend as World Population. RELATION OF PRODUCTION, POPULATION AND GDP , index (2000=100) 200 GDP Nutmeg export Volume World population Remark : -> Disclaimer Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

41 2-2.Reasons of crazy price Only during the Financial Crisis, Nutmeg export price showed same movement as Indonesian currency. PRICE MOVEMENT ANALYSIS (CURRENCY) Jan Jan.2012, Index (100 = the price in Jan.2002) NUTMEG ABCD SINKING Currency (Indonesia Rupiah/US Dollar) 50 0 Database" Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

42 2-2.Reasons of crazy price Commodities showed same trend as Nutmeg. Excess liquidity pushed up commodity price. PRICE MOVEMENT ANALYSIS (COMMODITY) Jan Dec.2011, Index (100 = the price in Jan.2006) NUTMEG ABCD SINKING Black pepper London Gold Coffee (Arabica) Crude oil (WTI) Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

43 2-2.Reasons of crazy price Coca-cola, who is the giant user of Nutmeg essential oil, has aggressively increasing its sales globally. PRICE MOVEMENT ANALYSIS (COCA-COLA) , USD/Tonne, million USD Coca-cola company Net operating revenues CAGR ( ) 7% Nutmeg at the ports of United States Remark : -> Disclaimer Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

44 2.Price 2-3.Future forecast Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

45 2-3.Future forecast [Supply] World production will slowly increase. Negative factors will exist. [Demand] World demand will gradually increase. European economy may have impact on price. Supply Demand Grenada will make a gradual recovery. New trees in Indonesia will start production. Early pick in Indonesia will continue. Climate Change in Indonesia will continue. World population will grow. World economy will grow. Extractor s demand will increase. Price down Price up Price up Recession in Europe may reduce demand. Price elasticity may push down demand. Price down Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

46 2-3.Future forecast As World population and economy grow, demand for Nutmeg will be increased. New trees will start its production in the coming 5 years, which will push up production. But shortage is likely to continue till 2013/2014. ESTIMATED SUPPLY & DEMAND (VOX'S SIMULATION) Supply Demand Carry over Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

47 3.Aflatoxin 3-1.How Aflatoxin contaminates into Nutmeg. Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

48 3-1.How Aflatoxin contaminates into Nutmeg. Most of the Aflatoxin contamination of Nutmeg were caused during the post harvest stage. Key points of Aflatoxin contamination are water activity of material and storage condition. Condition for Aflatoxin production Existence of Aspergillus flavus with ability to produce Aflatoxin Temperature >10C, 30C is the best Humidity >83%, >88% is the best Water activity >0.83 Dead food for fungus NUTMEG <Harvest - Dry> Grown in the Tropics Space inside Careless dry <After Dry> Incomplete dry Insect Dew condensation during transportation Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

49 3-1.How Aflatoxin contaminates into Nutmeg. Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

50 3.Aflatoxin 3-2.Approaches to control Aflatoxin risk. Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

51 3-2.Approaches to control Aflatoxin risk We may find several possible approaches for Aflatoxin risk control, direct and indirect. Direct Approach Block Aflatoxin contamination. Remove Nutmeg contaminated with Aflatoxin. Indirect Approach How to reduce Aflatoxin risk? Find a buyer who do not care Aflatoxin. Relaxation of regulations for Nutmeg Use insurance or create a fund. Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

52 3-2.Approaches to control Aflatoxin risk Heat dry Sinking Hand selection Hand selection Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

53 4.Summay The continuing shortage situation is likely to support the current high price. Weak economy in major consuming countries may not allow manufactures to shift higher purchase cost to selling price. More strict control on mycotoxin may impose extra cost and work to all of us. External Economic challenge More strict control on mycotoxin Difficult condition will continue. Price Availability Quality Internal Global demand increase Slow production growth Early pick in Indonesia Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

54 4.Summay To overcome the difficult situation, it is advisable to start integrated-supply-chain approach. Understanding End Users essential needs and optimizing vertical supply chain are key points. Consuming countries Quality Quantity Price Safety Producing countries Feb.10, 2012 presented by VOX TRADING CO.,LTD. for World Spice Congress

55 Thank you. VOX TRADING CO.,LTD (Mr.) Shinya Haba PT. VOX TRADING INDONESIA (Mr.) Masakazu Shiga