World Environment Day - Vietnam Afforestation Project

On our black pepper estate in Gai Lai Province, Vietnam, we are in the process of regenerating the forest surrounding the property. To date, nearly 500 acres (200+ hectares) of mixed varieties of trees have been planted. In total, we plan to grow 988.4 acres (400 hectares) of trees over the next two years.

The land was previously deforested by the local community for additional farm use and for firewood for their homes before Olam purchased the property. In order to reduce and prevent further deforestation in the area, we are teaching local farmers and community members the importance of protecting and regenerating forests.

The trees will take 6 or 7 years to fully mature, and will offer numerous benefits to the farm and local community including:

  • sequestration of carbon
  • natural filtration of water used on the estate
  • providing habitat to support biodiversity
  • improve eco-systems for the sustainability of local pepper farming community
  • wind protection to sustain high yields from the black pepper vines

Dear Customer,

Olam Spices appreciates the opportunity to supply you with the highest quality dried onion and garlic products globally. As your trusted supplier, we would like to provide you with an update on recent developments in China, with respect to the coronavirus (2019-nCoV) outbreak and its potential impact on the global onion and garlic markets.

The rapid spread of 2019-nCOV is especially relevant for those products and ingredients where China is a major source. For instance, garlic and onion — as China produces more than 80% of the world’s traded garlic and ~7% of the world’s dried onion.

Currently, all Chinese garlic and onion processors/exporters remain closed through Feb. 9, 2020, as mandated by the Chinese government, but have indicated that they will resume operations on Feb. 10, 2020. However, there are unconfirmed reports that some manufacturers have delayed restart of operations till Feb. 16, 2020 and that weak labor availability and shipping bottlenecks were likely in the next few weeks.

As we know, in 2003, during the SARS outbreak, there was a sharp spike in Chinese garlic pricing, especially in Asia due to supply bottlenecks and abnormal spot demand. At this stage, it is difficult to predict what will happen moving forward and buyers will need to do their own risk assessment.

The last few days have seen a significant ramp up in US garlic and onion inquiries from buyers looking for risk-mitigation solutions in the event of another unexpected supply chain disruption from China.

Olam Spices’ US garlic and onion operation represents a fully traceable, stable, dependable and high-quality source of California grown, non-GMO, gluten-free, peanut-free, dehydrated garlic and onion, which can provide a competitive edge against volatile market conditions.

We have had an improved supply of US garlic over the last few years and have some buffer stock to take on unexpected demand. The CY2020 crop was planted in November 2019 and is progressing well. Current availability of Olam’s US garlic, while adequate, will not be so large as to take on a huge increase in demand. We will, however, be happy to work selectively with loyal customers looking to cover increased demand for US garlic.

Organizations looking to de-risk their supply chain from potential supply/price volatility from offshore origins should evaluate Olam’s US garlic and onion as viable alternatives. Similarly, existing users of US garlic and onion should look to actively cover 2020 needs as early as possible to avoid a potential tightening of supply, as demand strengthens.

We encourage all interested parties to contact their respective Olam account manager for detailed discussions. Please note, however, that the market situation is tenuous, with the potential for sharp demand and price surges that would require a fast turnaround on quality and pricing approvals.

As a valued supplier, we will continue to communicate additional and relative developments as they occur.

Assuring you of our best attention at all times,

Vinayak Narain

Sr. Vice President - Onion and Garlic, Olam Spices

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