RGT Pepper Market Report Week 39/ 2021

 Vietnam – market remains steady entire week with raw material in firm standing full straight week at level 81,000  VND/kg for raw material trading with local dealers allegedly pushing up the prices even higher.
Thus, opening market today, raw material went up at level VND-81,500 VND/ kg. 

Eyeing in Vietnam New Crop 2022.
An outright bullish fourth quarter is expected to persist and the focus now of  many is securing position for next year crop. However, offers for new crop from sellers remains elusive. Reportedly, majority of last year and this year’s crop are still in the hands of farmers and traders being offered at a premium price. Foreseeable lesser crop and harvest delay brought by extreme weather condition are also anticipated, more later than this year’s crop of which could add up to market pressure. 

With the current scenario both are siding concluding that market will go higher by next year in retrospect of  Indonesia’s crop outlook for 2021-2022. 

This is now more logical as looking back at this year’s market new crop opening prices how majority assumed high pressure on side of farmers/shippers. But then quite the opposite, market went to a new record high direction that overwhelmed almost everyone.

Indonesia – relatively stable this week due to less volume available to trade in. Indicative pricing reportedly at range of $4200 FOB seeing no pressure from seller’s side.

Brazil – In active mode entire week itself in contrast with other origins, stock position is at a positive note due to  present new crop position with trading price supported at level $3800 FOB having seen a noticeable good  demands from South Asia, Vietnam, and specially Europe of which seen buying in splurge trying to get their orders as prompt as possible before MAPA ordinance starts.

Strong demand last week and Vietnam’s current position are both likely to influence Brazil pricing this week.

MAPA Brasilia Ordinance 396, published on September 21, 2021, the ordinance aside from pepper will also cover other products from Brazil origin such as nuts, grapes, mangoes, etc. beginning November 01, 2021. As initially reported, new ordinance main objective is to control and monitor residues and contaminants of export products from Brazil to Europe countries that will provide a corresponding sanction to exporters reaching a certain maximum number of alert notifications. Though the provision is said to be made legal and binding, execution on how to  implement remains to be seen in coming weeks.

Heading to the last quarter of the year and market is looking as though it will be more stronger in the near  term with an expected flagged gain in pricing levels than what we are seeing now. That leaves our last thread of hope for ocean freight cost to subsides in atleast a supportive level to sustain inflating raw material prices going forward.

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