Indonesia Market Update
October 16, 2020
Weather Update
La-Nina continues to soar through the tropical Pacific region. There is an 85% chance this tropical storm will continue through the winter months, during which forecasters believe La-Nina will be at its strongest. The extreme high winds and extensive, heavy rainfall will affect cultivated areas.
Indonesia Rainfall Forecast- September 2020
Source: BKMG
Clove Leaf Oil
The Clove Leaf fields suffered from excessive rainfall due to La-Nina. Various regions where the leaves are collected for distillation did not show a promising output. Typically, clove leaves are harvested during the dry season (July – November), however Indonesia has not experienced a dry period. The extreme rainfall has affected the availability of product.
COVID-19 kept pricing firm, with limited increases. As we move forward into the winter months there will be a substantial price increase due to La-Nina. The inquiries for Clove Leaf are starting to rise; demand will continue to be tight with a price increase through June 2021.
Patchouli Oil
The consistent demand for Patchouli Oil is still trending with minimal price reductions. Competitive pricing between exporters remain at its peak. With demand exceeding supply due to heavy rainfall, flooding and the inability to dry the leaves, we anticipate pricing to remain stable with minor adjustments for the remainder of 2020.
Citronella Oil
The current harvest and pricing are stable for Citronella Oil. Indonesia is experiencing excessive rainfall from La-Nina, as well as entering the typical rainy season, causing a significant impact for available stock and price. We anticipate a lower yield with price increases.
Nutmeg Oil
The output continues to increase, with another good yield this month. The current oil demand and price are stable.
