In 2017, global cinnamon production totaled nearly 224,150 metric tons, up 7 percent from five years earlier as demand continues to grow. The U.S. and India, the world’s top two destinations, are expressing robust demand for the spice.

Indonesia has managed to hold on to its status as the world’s top cinnamon supplier, but declining yield and harvested area are taking a bit of a toll on the country’s ability to produce. Back in 2009, the last year Indonesia produced over 100,000 MT of cinnamon, growers had over 102,600 hectares devoted to cinnamon; 2017’s acreage, while 3 percent larger than in 2009, reflects a 5 percent decline from the previous three years. Indonesia’s yield has been falling every year since 2009, and 2017’s yield was just 8,256 hectograms per hectare, the lowest since 2002. In recent years, Indonesia has exported nearly 60 percent of its crop.

China is close to tying with Indonesia as the largest cinnamon producer, thanks to very high yields offsetting many fewer planted hectares. China has increased cinnamon production annually for the last 20 years and in 2017 produced almost 79,500 MT. Between 2013 and 2016, China exported over half its annual cinnamon production.

The Vietnamese government promoted cinnamon cultivation to encourage stewardship of the country’s forest land, and as a result, planted area increased 30 percent from 2013 to 2017 and put Vietnam just slightly behind Indonesia in terms of land use. Yet of the top producing countries, Vietnam sees the lowest cinnamon yield, at just 3,640 hectograms per hectare. Although production rises each year, Vietnam’s crop is still less than 40,000 MT per year. The country exports nearly 90 percent of production, however, making it the world’s third largest supplier.

Historically, Indonesia supplied about 80 to 90 percent of U.S. demand, but since 2014 Indonesia’s share of the U.S. market has dipped closer to 70 percent, while Vietnam’s share has increased to 15 percent. The U.S. is the world’s top cinnamon destination, though, so Indonesia’s 70 percent in 2017 translated to 24,000 MT, or more than a fourth of the country’s production last year. A shift in U.S. demand to other origins may be cause for concern among Indonesian growers. U.S. cinnamon imports hit a record 34,185 MT in 2017, and while 2018’s volume will most likely be closer to 2016’s level, Vietnam’s Jan-Oct 2018 shipments to the U.S. were actually higher year over year and Indonesia’s were lower not only than Jan-Oct 2017 but also lower than the same period in 2016.

U.S. monthly cinnamon imports

Source: USITC
Posted by: Information Services
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