Vietnam Pepper Market continue to hold its staying power with raw material being seen stable at level 81000 VND/kg 5-day straight, went into a break during weekend then bouncing back strong opening today.
As usual, reported shortage in raw material offers seems to generate significant influence in the current market standing exhibiting a bullish trend as we head to the remainder of the year with September month averaging to 80,025 VND/kg that is higher of about 2.4% compared to last month trading average. Despite reported reluctancy of some shippers last week to cover their requirements, few big exporters were seen actively bidding and buying out.
Indonesia with harvest season in full swing, sellers offer nowadays are seen at level $4225 FOB with an interest to sell their stock position. Though noted with a minimal decline of about 1.17% in pricing today, it is still quite high compared to other origins not to mention the freight cost that are still very high.
MAPA Brasilia Regulation Update. To this date the new ordinance that was supposedly to be imposed have not yet been published so far. As expected, Pepper Producer Association in Brazil and some major entities joined forced requesting to put off further proceedings of either indefinitely delaying it for at least a year allotting enough adjustment time for Brazil Exporters in strategizing their action plan. Furthermore, raising their main concern that sudden implementation could greatly impact all active unshipped booked contracts in Europe with Brazil Export that is currently hugely affected with current shipping crisis. Shipping hurdles increase as September month availability remains overbooked stirring major concern worldwide.
Top Carriers Plan to Freeze Spot Rates. Following CMA CGM announcement to put a freeze in increasing spot rates, last week Hapag Lloyd and Maersk joined the pledged. However, clear information of how it will be forced remains to be seen in following months as up to this point pressure on capacity remains very tight that is expected to worsen further in upcoming Golden Week Blank Sailing.
What to Expect with Chinese Golden Week? The Golden Week in China begins by around first week of October. This event is well-known both in in logistics and supply chain every year as it unavoidably affects all shipments concern. If September bookings is pictured out as a bottleneck nowadays in Asia-Pacific, this year’s Golden Week will be catastrophic adding up to the number of consequences in ocean freight and inland transportation across multiple trades and regions. According to some experts most affected regions pre and post Chinese Golden Week this year will be: 1) North America, 2) Asia Pacific & 3) Northern Europe.
General Note: Nowadays, the high pepper prices and extremely high freight cost are making buyers wait and suppliers delay shipments, hence, causing supply gap to widen further which may result a sudden heavy demand at some point in time between current and new crop.
Rising cost of raw materials is becoming it more harder to secure offer and fixed commodity price from sellers. Grasping the implication that we are now heading to the last quarter of the year; market positioning appears to be headstrong and will be difficult to bring down now despite the ongoing freight crisis.
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