Clove shortage hits tobacco industry

Tobacco industry demand for cloves could reach 125,000 tonnes

By the BBC's Greg Morsbach

Indonesia's tobacco industry is facing a serious shortage of cloves - the key spice used in Indonesian cigarettes called "kretek".

Government officials say the country is going to have to import vast amounts of cloves to avert a crisis in the tobacco industry.

The tobacco industry is the government's largest source of revenue after oil, gas and timber.

Nine out of every 10 cigarettes smoked in Indonesia are flavoured with cloves, which connoisseurs say have a sweet and spicy aroma.

Cigarettes contain 60% tobacco and 40% cloves.

In all, the industry consumed about 86,000 tonnes of the spice last year.

The cigarettes contain 60% tobacco and 40% cloves, so local cigarette factories depend heavily on clove supplies.

But Indonesia's agriculture ministry has warned some 50,000 tonnes of cloves may have to be imported next year to meet the rising demand of cigarette makers.

Local companies dominate

In contrast to the tobacco industry in other contries, Indonesia in not dominated by multinationals.

Leading Indonesian Tobacco Companies

Gudang Garam

Djarum Kudud

HM Sampoerna

Bentoel

Four major ethnic-Chinese Indonesian tobacco companies control 85% of the market share, with Phillip Morris, Rothmans and BAT Indonesia vying for the remainder.

Sliding supply

The clove shortage has also been caused by falling home-grown production.

A ministry official said the political and social unrest in the war-torn Moluccas and the province of Aceh has badly affected smallholder plantations.

Origin of Kretek

Introduced in 1875, the term was taken from the sound of burning clove: "kretek... kretek..."

Smallholder farmers grow the bulk of Indonesia's cloves, but they are still reeling from the agriculture crisis of the mid-1990s when clove prices hit an all-time low.

Since then, they have not had enough money to modernise old machinery or expand their plantations.

Indonesia is now likely to import cloves from the East African state of Zanzibar - one of the world's leading producers.