Pepper prices last week decreased on 5th & 6th May due to concerns about the disease situation in many provinces of Vietnam (411 cases per week in 26 provinces - currently Vietnam government still manages very well).
Along with that, the export situation slowed down because the freight rate continued to increase and it was difficult to get spaces containers for the US / EU / Canada routes. Currently, raw material is still stuck at collectors/exporters and not circulating smoothly. Therefore, the payment flow from abroad is also later than usual.
On the domestic market, the pepper harvest is over the past 2 weeks, farmers prepare to take care of the trees when the rainy season approaches. In addition, coffee prices in the past week with an impressive increase in 5 consecutive weeks, stimulating farmers to sell, which also increased pressure to pay coffee raw materials to small dealers/manufacturing coffee companies. Many manufacturing and exporting companies continue to lack local liquidity due to slow cash flow as well as the pressure to quickly pay raw materials to farmers/agents.
The market demand is still quite good as oversea customers still not covered enough stock yet for Q3 / Q4 shipment. USA / EU / ASIA continuously increase buying volume for the third quarter / fourth quarter delivery but exporters hesitate to offer long position due to global pepper crop was less than in previous years.
The long Chinese holiday season ended last week and Ramadan will end in the next 3 days (May 13th). Therefore, demand is likely to increase even higher in week 19.
The USA & many EU countries are gradually moving to a normal. The rapid economic recovery in Europe, China - the world's largest raw material consumer, along with the USA, has boosted demand for many commodities. The S&P GSCI Index, which tracks price movements of 24 raw materials, has risen 26% this year.
However, the COVID-19 epidemic is still complicated in some countries, affecting the consumption, and it is likely that pepper prices in the short term will hardly spike as in the past due to concerns; Covid-19, many countries widen their social gap, the demand for consumption decreases "
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