Indonesia's woes spice up Grenada's nutmeg trade
Indonesia's woes spice up Grenada's nutmeg trade
SAINT GOERGE'S, Grenada (DPA): Grenada, known as "the Spice Island of the West", has enjoyed two years of robust sales on the world's nutmeg market thanks to Indonesia's political and social woes.
In fiscal 1999/2000, Grenada sold 6.5 million pounds of nutmeg on the international market, earning the tiny island-country 49.7 million Eastern Caribbean (EC) dollars (US$18.4 million), a 67.2 per cent increase over the previous year's earnings, according to the Grenada Cooperative Nutmeg Association (GCNA).
"Indonesia's inability to supply large quantities of nutmegs on the international market, mainly due to their political and social unrest over the last two years, has definitely created a demand for (Grenada's) nutmegs on the market, and as a result prices have also increased considerably," said the association's latest report to its board.
Last year, Grenadian nutmeg fetched 3 dollars per pound, compared with only 52 cents in 1994. Mace - the lacy red outer covering of the nutmeg shell which is a key flavorer and preservative in European meat products - soared in price to 3.90 dollars per pound last year, compared with less than a dollar in 1994.
Nutmeg prices this year, however, are on the decline.
"It's definitely down from the previous year," said Terence Moore, general manager of the Grenada Cooperative Nutmeg Association. "A combination of factors have happened at the same time - the outbreak of foot-and-mouth disease in Europe, and Indonesia is stabilizing a bit."
Nutmeg, or "myristica fragrans", was first brought to Grenada in the 1840s by British planters who visited Indonesia to advise the Dutch on establishing a local sugar industry.
Grenada's first break in the international nutmeg trade came in 1850, when a crop disaster in Indonesia prompted traders to look elsewhere for the spice.
By 1881, Grenada was already exporting 100,000 pounds of nutmeg. The Caribbean island has for decades been the world's second-largest nutmeg exporter, after Indonesia, and last year claimed close to one-third of the world nutmeg trade.
But tough competition with Indonesia, when it isn't experiencing weather or political disasters, has generally kept nutmeg prices down on the world market.
Grenada's nutmeg association still recalls the 1986-88 period as the best years for the world nutmeg trade, when Grenada and Indonesia formed a nutmeg cartel in an attempt to control world prices on the spice.
The cartel collapsed in 1989, primarily because the two countries accumulated excess stocks in their efforts to keep prices artificially high, and smuggling out of Indonesia via Singapore eventually undermined the cartel.
Grenada's failure to react quickly to the falling prices in 1989 led to a near complete loss of their market for several years and a certain amount of bitterness between the two nutmeg giants.
One of the problems with the nutmeg cartel attempt, was the very different structures on the spice industries of Indonesia and Grenada.
In Grenada, the nutmeg industry has been managed by a cooperative between growers and traders that has been in existence since 1947. The Indonesian industry is more market- oriented, run by traders who buy nutmegs from growers on the huge archipelago and compete with one another on the international market.
One thing that has remained constant in the international nutmeg industry has been its domination by Dutch trading firms. The Netherlands buys nearly 40 per cent of Grenada's nutmeg and mace, although it acts only as a conduit to the European market.
Dutch spice traders, such as Catz International, played a key role in attempting to set up the nutmeg cartel between Grenada and Indonesia, with the aim of furthering their own hold on the trade, according to Renwick.