Spices Market Update Q4 2024

United States

• Production Challenges: 2024 harvest was below expectations due to adverse weather. 2025 planting was delayed, but water supply is currently adequate.
• Rising Costs: Increased labor, input, and fuel costs, along with higher interest rates, are impacting production.
• Strong Demand: Chopped, large chopped, diced, toasted, BI controlled, and micro-sensitive onion products are in high demand, leading to potential supply constraints and price increases.
• Irradiation Costs: The cost of irradiation is rising, further impacting product pricing.
• Import Tariffs: Potential tariff increases on imported onions could lead to increased demand for US-grown onions.

Other Markets: India

For the late kharif season, sowing has started in all regions and will be complete by the end of December. Major growing regions are Maharashtra and Gujarat. The expected average yield is 12-13 MT/Acre and maximum yield is projected at 15-17 MT/ Acre. Production for 2025 is expected to increase by 15-20% compared to the previous season. A contributing factor is rainfall in the onion growing belts.

Exports for all varieties of onion were good this year, and there is high demand for dehydrated onions. Total exports in 2024 for dehydrated onions are projected to be more than 90,000 MT (Dehy. Equivalent).

Prices are expected to come down by 10-15% compared to last year due to thespeculation that agricultural production of onions will be high. This may not actualize until after Mid-January 2025.

White onion harvesting will start in January 2025. Harvesting for other varieties has begun, with an average price of 240 $/MT in December 2024. The best time for procurement will be after mid-January for red/pink onion and March 2025 to April 2025 for white onion.

Other Markets: Egypt

Yellow Onion:

Egyptian yellow onion is projecting a stable season for availability and pricing. RM availability is also expected to remain stable, with planting areas mirroring 2021 levels, and good weather supporting higher yields. Summer onions are still available in the market. While export subsidies have been removed and demand has softened, quality is expected to improve compared to recent years. Inflation and fuel cost pressures are increasing prices, but strong yields and reduced fresh exports provide some balance. Factories are fully operational, and winter onions boast an excellent micro profile.

White Onion:

In the US, ofi’s white onion program has achieved FSA Gold certification.
November plantings have yielded targeted germination rates and remain
healthy and disease free, although weather changes may increase disease
pressure in early 2024. Inflationary pressure and the reduction of fuel subsidies have increased costs, but freight prices have stabilized, ensuring steady distribution.

United States

• Production Shortfall: The 2024 harvest was significantly lower than the previous year due to seed crop damage.
• Rising Costs: Similar to onions, labor, input, and fuel costs are increasing for garlic production.
• Strong Demand: Granulated, minced, chopped, and roasted garlic products are in high demand, potentially leading to supply shortages and price increases.
• Irradiation Costs: Irradiation costs are rising, adding to overall product costs.
• Import Taris: Potential tari increases on imported garlic could shift demand towards US-grown garlic, potentially tightening supply.

Forward Outlook and Recommendations (US Onion and Garlic)
ofi's vertically integrated supply chain, from seed to shelf, allows for greater
control over quality, supply, and pricing, mitigating the impact of external factors.

• Secure Forward Contracts: Given the potential for supply constraints and price increases, customers are advised to secure forward contracts to ensure supply and price stability.
• Diversify Sourcing: Consider diversifying sourcing strategies to mitigate risks associated with supply chain disruptions.
• Collaborate with Suppliers: Work closely with suppliers to optimize production and logistics to minimize costs and ensure timely deliveries.

By proactively addressing these challenges and leveraging ofi's capabilities,
customers can navigate the market dynamics and secure a reliable supply of
high-quality onion and garlic products.

China

Total cold storage of fresh garlic quantities declined to last year and was approximately .4M tons less as of May 2024. In September fresh garlic quantities in a cold warehouse was 4.22M tons versus 4.58M tons the year prior, and in December the total fresh garlic quantity was 2.53 tons versus 3.04M tons to LY.

YTD the garlic flakes crop produced about 100K tons with 100% of flakers
completing production. As a result garlic flake quantities continue to decline.
Total fresh garlic consumption in November actualized at 620K MT, significantly higher than market expectations.

Export volume YTD through October increased for fresh garlic and garlic flakes. Fresh garlic export volume increased by 13.8% to LY, and garlic flake export volume increased by 14.98% to LY. Many U.S. market exporters have been buying and shipping increased quantities of garlic flakes due to a potential increase in duties on garlic products from China.

While garlic flake pricing will fluctuate in coming months due to consumption and weather conditions, recent eects of the futures market have caused pricing to decline slightly.

Planting acreage for 2025 is projected to be 7% higher than the 2024 crop, but still significantly lower than market expectations.

Overall the 2024 crop year was favorable to pepper production. The yields were strong, virus and insect issues were minor, and the weather was favorable throughout the season.

Green Chile

Green chile season was 100% complete in early November with additional late season requests for peppers secured.

Jalapeño

Jalapeno delivered to the demand with ease and late season additions were easily filled.

Organic harvest complete. Beneficial growing conditions locally allowed us to 
shore up any shortcomings that we had from the winter organic crop. 

Tomatillo

In early 2024, Tomatillo delivered to demand with little diculty. The late season
harvest is set to begin mid-December. The current crop looks favorable with
projected strong yields and without any anticipated shortages or interruptions.

Pace

Pace Jalapeno production is ongoing. There are no anticipated interruptions or
crop shortfalls.

Pepper

The harvest in Vietnam has ended and the next harvest is expected to begin in February 2025. Indonesia has also completed the harvest and arrivals have stopped. While in Brazil peak harvest continues. It is anticipated that arrivals will steadily continue until there is a break for the holidays.

Throughout Q4 prices in Vietnam ranged between VND 140K - 150K. Coee
season in Vietnam is at peak, and the focus of sellers has shifted this direction. With the onset of the harvest in Brazil, pepper prices declined to FOB $6,100/MT.

As of November 2024, Vietnam has exported a total of 235K MT across peppers. This is down slightly by about 2.89% from last year. North America is the largest importer with 72.5K MT (+37%), followed by Europe at +31% and the Middle East at +10%. Exports to Asia dropped by -56%.

Cassia (Vietnam)

We are currently in the High VO season, with the harvest expected to finish earlier than usual due to the onset of cold weather. The next crop will arrive during the spring season, in April. Currently, the price of Vietnam cassia remains stable.

Nutmeg (Indonesia)

In Indonesia, the rainy season across growing regions has slowed down the
harvest, as farmers find it dicult to sun-dry their produce. The price
remains stable. 

Ginger (Nigeria)

The crop this year in Nigeria is significantly smaller than in typical years, with
delays in the harvest. The peak flush is now expected to begin mid-December, and slow arrivals have commenced.

Chili

New crop arrivals are earlier than last year and have started in the Guntur and Byadagi markets. Arrivals are from Kurnool and Nandyala area in Andhra
Pradesh. Crops in Warangal, Etunagaram, Bhadrachalam and Jagityal are in the fruit formation stage. Arrivals are mostly Teja, Armoor, DD, Indam 5 and 5531 varieties.

Some areas in Karnataka and Tamil Nadu received heavy rain due to a cyclone, resulting in a potential increase in white chilies in Karnataka. The rain has been better than last year.

An incidence of Black Thrips has been identified in most of the regions; however, the spread is < 5% which is 15% lower than last year. Overall the crop looks healthy. Farmers are using recommended chemicals in our Backward Integration programs.

The Guntur Market prices have recently stabilized and prices increased by INR 5/kg for good qualities due to less availability and increased domestic demand. IPM prices are 30% higher than conventional market prices.

Export and domestic demand has increased and sales are improving for high
heat varieties like Teja and Armoor versus seed varieties. There is higher demand from Bangladesh, Thailand and Indonesia compared to China.

While prices have started to rise they may vary depending on yields in the
new season.

Cumin

Sowing is in progress and is expected to extend until the end of December 2024 due to germination challenges. The crop is at 19-39 days post sowing with 70% completed in Gujarat and 55% completed in Rajasthan. Acreage is expected to increase across both locations, +5% in Rajasthan and +30% in Gujarat.

Market arrivals at Unjha have decreased compared to November. While demand from European importers has been subdued, the surge in exports is primarily fueled by Bangladesh and Sri Lanka. Delays in the sowing of the new crop are contributing to a recent uptick in prices.

Prices are expected to further stabilize with the arrival of fresh crops from the Kharif season.

Coriander

Sowing is in progress with 70% – 80% completed, rain in Rajasthan and Gujarat in October and above average temperatures in November contributed to a two week delay.

Sowing acreage is expected to decrease by 20% in Gujarat and 25% in Rajasthan and M.P. Higher temperatures have also slowed growth and germination, but no major impact is projected.

Arrivals in the mandi declined due to Diwali festivities with total arrivals in
Ramganj Mandi (Rajasthan) at about 55 MT/Day. Arrivals in Gondal Mandi
(Gujarat) were about 180 MT/Day.

Exports decreased in October compared to September with high demand
coming from Malaysia (1,061 MT) and the UAE (775 MT). Spot prices remained within range. IPM compliant material availability is tight contributing to stable prices which are expected to remain for the short term, while the long term trend is expected to be bullish.

Turmeric

The turmeric crop is 160-175 days old and in the Rhizome development stage. The yield report survey will be completed by the end of December.

Overall the crop is in good condition across regions, with minor diseases being reported. Harvest has started in North Karnataka.

Recently, turmeric prices have been stable and are expected to remain within
range in the short term.

IPM crop prices are around 20% higher than conventional prices. Exports have dropped by 16% throughout October, while the domestic demand has remained strong.