Strengthening the Competitiveness of Indonesian Cloves

For more than five centuries, cloves have been a commodity that shaped world history. Originating from the Maluku Islands, this spice was once the primary reason European nations explored the oceans, fought over trade routes, and established colonialism in the archipelago. Today, Indonesia still holds the status of being the world’s largest producer and one of the largest exporters of cloves. However, behind this achievement lies a paradox: production dominance has not yet fully transformed into leadership in global competitiveness and economic value. This paradox is increasingly felt as clove farmers in various production centres face growing uncertainty. Climate change, price fluctuations, dependence on a single industry, and demands for international quality standards are challenges that can no longer be resolved with conventional approaches. If this condition is not promptly addressed through more progressive policies, Indonesia risks losing part of the competitive advantage it has held so far.

Indonesia indeed possesses substantial capital. International trade data shows that in 2024, Indonesia exported more than 51,000 tonnes of cloves worth approximately US$319 million, making it the world’s largest exporter with a share of more than half of global trade. On the production side, Indonesia produces around 148,000 tonnes of cloves annually, with main centres in Central Sulawesi, South Sulawesi, Southeast Sulawesi, North Sulawesi, and Maluku. These figures indicate that Indonesia remains a major player in the global spice supply chain. However, production superiority is not necessarily synonymous with competitive advantage. Various studies on Revealed Comparative Advantage (RCA) indeed show that Indonesian cloves have a strong comparative advantage. Indonesia’s RCA value is far above 1, meaning this commodity has export competitiveness. Nevertheless, some studies also show that in certain periods, Indonesia’s RCA value was still below competing countries such as Madagascar and Tanzania. This fact indicates that Indonesia has not yet fully capitalised on its production advantage to dominate high-value markets.

The main problem lies not in production volume, but in quality consistency, supply chain efficiency, and the ability to produce value-added products. The international market no longer only considers supply quantity, but also quality uniformity, food safety, production sustainability, and the ability to meet increasingly stringent technical specifications. One of the biggest challenges comes from climate change. The clove tree is a perennial plant highly sensitive to changes in rainfall patterns and temperature. The flowering process requires a balance between the rainy and dry seasons. When seasonal patterns change due to climate variability, the plant’s physiological processes are disrupted. Prolonged drought can cause flower drop, while excessive rainfall during the flower initiation phase can encourage vegetative growth, making flower formation suboptimal.

This phenomenon is no longer just a scientific prediction. The 2015 El Niño experience showed that clove production in various regions declined sharply due to drought. On the other hand, the increasing incidence of off-season rainfall has also begun to affect production stability in several plantation centres. In the long term, climate change is expected to become a major limiting factor for Indonesian clove productivity if not balanced with adequate adaptation strategies. As an export commodity, Indonesia’s challenge also lies in post-harvest quality. International standards are increasingly stringent in setting requirements for moisture content, product cleanliness, microbial contamination, pesticide residues, and traceability systems. Excessively high moisture content during storage or shipping can increase the risk of fungal growth, reduce essential oil quality, and ultimately diminish the product’s competitiveness in export markets.

These conditions show that enhancing competitiveness cannot be achieved merely through expanding planting areas. Instead, improving post-harvest handling is a highly decisive factor. The use of moisture content measuring devices, standard-compliant drying, proper storage, and the implementation of quality assurance systems are far more important investments than simply increasing production volume. Another equally serious issue is the domestic market structure. So far, around 95 per cent of national clove production is still absorbed by the kretek cigarette industry. Dependence on a single sector makes the clove market highly vulnerable to changes in fiscal policy and health regulations. When tobacco product industry output declines due to excise tax increases or changes in public consumption patterns, demand for cloves also weakens. The impact is directly felt by farmers through price declines.

In fact, the potential uses of cloves are much broader. Clove essential oil contains eugenol in high concentrations, which has long been utilised as an antiseptic, analgesic, raw material for cosmetics, perfumes, aromatherapy, and the food industry. Various studies also show eugenol’s promising biological activities as an antimicrobial, antioxidant, and anti-inflammatory agent for health product development. With the increasing trend of using natural ingredients in the global market, opportunities for developing downstream industries based on cloves are actually wide open. Unfortunately, downstream processing has not developed as quickly as expected. Indonesia still exports more dried clove buds than high-value processed products. As a result, most of the added value is captured elsewhere.