Report No. 1: Nutmeg processing and marketing in Grenada


List of abbreviations
Executive summary
1. Background information and trends relating to the growing, management, production, and trade of nutmeg/nutmeg products in Grenada
2. Relative importance of nutmeg in providing income, employment and export earnings
3. Constraints/problems faced by Grenada in nutmeg production and trade, and proposed solutions
4. Definition of terms
5. Description of components of nutmeg
6. Conclusion from chemical composition analysis of nutmeg
7. The present market status of the vegetable fats and oleochemical industries
8. Market analysis for trimyristin and myristic acid
9. Recommendations
Endnotes
Appendix 1: Structure and physical properties of nutmeg oil components
Appendix 2: Manufacturers and suppliers of myristic acid and myristyl alcohol
Appendix 3: Price quote for a gas chromatograph machine
Appendix 4: Companies presently selling trimyristin as a laboratory reagent
Appendix 5: Companies selling oils and fats extraction equipment
Appendix 6: An estimate for a pilot study to be conducted at Texas A and M university and price quotation for equipments necessary for the production of trimyristin on a commercial scale. from crown iron works



prepared by
Dilon Daniel

List of abbreviations


AAI%

Average Annual Percent Increase

FELDA

Malaysian Federal Land Development Authority

g

gram

GCNA

Grenada Cooperative Nutmeg Association

GC

Gas Chromatography

Inform

International News on Fats and Oils and Related Materials

kg

Kilogramme

MT

Metric Ton

$

Dollars

US

United States

USDA

US Department of Agriculture


Executive summary


Questions Addressed

The feasibility of extracting individual components from nutmeg and marketing these components is reported in this document. Within this context, an analysis was conducted of the trend in nutmeg production and trade in Grenada along with the importance of this crop as a source of income to the populace. A thorough scientific investigation of the individual compounds found in nutmeg and the viability of extracting these compounds was also covered. Finally, an economic evaluation is discussed in terms of cost of production, marketing and revenue outlook of extracting these components, and recommendations are made based on the findings.

Summary of Findings

Nutmeg production continues to play a pivotal role as a source of income, employment and revenue for Grenada. However, the recent decline in the nutmeg trading price on the international market has seriously affected the economy of the country.

Upon examination of diversifying the uses of nutmeg, one of its components, trimyristin, was seen as a potential marketable product. Trimyristin is a fat, and it comprises approximately 40% by weight of the nutmeg seed. A by-product of trimyristin is myristic acid, and this carboxylic acid is used commercially in the soap and cosmetic industry.

Another possible marketable product is nutmeg oil. Nutmeg oil, which is the essential or volatile oil of nutmeg, is approximately 12% by weight of the nutmeg seed. A steam distillation plant is under construction in Grenada to obtain the nutmeg oil. However, once the nutmeg oil is removed by the steam distillation, if nothing is done with the remaining components of the nutmeg, then 88% of the nutmeg seed is discarded. Most importantly, the trimyristin which is a potentially marketable product, will be lost. Trimyristin can be sold as any other fat or oil to be used as a source for making fatty acids, fatty alcohols, or glycerol which are used for the soap, cosmetic and oleochemical industries. Moreover, the equipment used to extract trimyristin from nutmeg can also be used to extract other products such as coconut oil from copra. Thus, the marketing potential of trimyristin demands that a pilot study be conducted on its extraction from nutmeg to evaluate the possible commercial production of this fat.

1. Background information and trends relating to the growing, management, production, and trade of nutmeg/nutmeg products in Grenada


Most of Grenada's nutmeg is grown inland in areas of higher altitude, greater than 100 meters above sea level. About three to five years after planting the nutmeg, the nutmeg tree (Myristica fragrans) begins to bear fruits which turn yellow in colour upon ripening. The yellow fruits split open to expose a shining dark brown nut that is surrounded by a bright red lace-like covering called mace. Inside of the dark brown nut is the light brown nutmeg seed.

Grenada produces over 23% of the world's nutmeg, which is second to Indonesia which produces 73% of the world's nutmeg. Nutmeg in Grenada is grown by both large and small farmers. Over the years, 1951-1993, 29% of the growers in Grenada had annual average deliveries of less than 100 pounds (or 45.41 kg). The seventy-six largest producers which comprise 0.5% of the nutmeg fanning population contributed, on an annual average, deliveries in excess of 10,000 pounds (or 4,541 kg). As a group, they have been responsible for approximately 20% of Grenada's annual production in terms of volume. The structure of the industry as it relates to farm size, over time, has not changed in any significant manner.

Both nutmeg and mace are traded regionally and extra-regionally. Mace is removed from the nutmeg, washed and sun-dried for a few days until it becomes brittle. The mace is then sold to the receiving station for grading and packing. Nutmeg are dried, graded and bagged at the processing stations. Once the products have been packaged, they are ready for export.

Table 11: Grenada's Nutmeg and Mace Production 1986-1993 (tons)

Year

Nutmeg

Mace

1986

2,229

212

1987

2,687

304

1988

2,712

331

1989

2,691

283

1990

2,717

271

1991

2,622

236

1992

2,595

163

1993

2,347

102

Historically, the major markets for Grenada's nutmeg have been Holland, West Germany, United Kingdom, Belgium, Canada, Poland, Spain and Argentina. Although Holland provides Grenada with its largest single market of nutmeg exports, a significant amount of nutmeg reaching Holland is re-exported.

2. Relative importance of nutmeg in providing income, employment and export earnings


The nutmeg industry is important as a provider of employment and income in Grenada. According to the Grenada Cooperative Nutmeg Association, about 7,000 to 10,000 small farmers are directly involved in the production of the crop. Conservative estimates claim that not less than 35,000 persons in the farm household, or about one-third of Grenada's total population, depend directly on the nutmeg dollar. A further 500 persons find employment at the processing stations.

As seen in the tables below, over the last six financial years the export earnings derived from nutmeg have been on the decline. Export earnings have fallen from US $15,761,107 in 1988 to US $2,660,595 in 1993. During that same period farm income has declined both in absolute terms and as a share of export earnings. The Grenada Cooperative Nutmeg Association claims that whereas farm income was 83% of the 1988 export earnings, by the 1993 financial year the share had declined to 58%.

Some of the more important reasons for the decline in the performance of the industry are: decline in the world demand for raw nutmeg; the dismantling of the Grenada - Indonesia marketing arrangement; and, to a lesser extent, production expansion. Given the trends in the trade of nutmeg, the revival of the nutmeg industry would depend on the extent to which Grenada diversifies both the industry and the market.

Table 2: Export Quantities of Nutmeg and Mace and Total Earnings for the Period 1986-1993

Year

Nutmeg (tons)

Mace (tons)

Total Export(US$)

1986

3,362

217

7,690,957

1987

2,334

224

14,306,088

1988

2,230

256

15,761,107

1989

1,769

162

12,496,538

1990

1,900

173

10,912,888

1991

1,522

257

4,909,421

1992

1,577

201

3,620,911

1993

1,863

184

2,660,595

Table 3: Prices Received by Grenada for its Nutmeg and Mace for the Period 1988-1993 (US$)


1988

1989

1990

1991

1992

1993

Nutmeg/kg

3.35

3.22

2.49

1.26

0.88

0.57

No. 1 Mace/kg

7.43

7.38

6.22

2.62

2.60

2.53

No. 2 Mace/kg

4.83

4.08

3.24

1.43

1.26

0.81