Pepper Talk// Pepper Market Report by Royal Golden// Week 10 – 2024

 

Week 9 ended firm on Saturday at level 96,000 VND per kg after some reported covering from shippers that had happened at level 95,000 VND. 
Overall, since the beginning of the year, black pepper prices have increased by about 14%. Having about an upsurge of 28% for February this year compared to last year same month period, while about 15% beginning March in comparison to last February beginning. 

Speculations continues as most of the farmers are allegedly a firm believer that pepper price cycle is set to a new record high. Further, with coffee and durian that are keeping them well funded, there seems to no selling pressure happening despite a reported 50% harvested crop already with farmers that are opting to store their pepper, waiting at the right time and price to sell it.  

Today, market remains firm, opening up with some buying demand happening. 
Muntok White Pepper remains stable to firm still being influenced by Vietnam bullish trend in addition to raw material that are very scarce.   

Brazil still few offers available. Local material last seen at level 19 BRL/kg.

In terms of ocean freight scenario, with Red Sea situation that continues to impact the capacity and equipment, carriers are announcing GRI/PSS/contingency charges with pressure for the additional cost involve for the rerouting via Cape of Good Hope. Expectations are that the Peak Season quantum will be mitigated or even softens by March month but that would remain to be seen. 

Pepper Vietnam: First sight of 2024 trend - UP !

 

Pepper price and export volume increase in the last month sug­gests a potential shortage of sup­ply.

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The first glance at the 23/24 crop in Vietnam suggest a 10-15°/o smaller yield

Pepper prices continued to rocket over the past few weeks on speculation that new harvest yield will stumble.

Experts say that the source of goods for export is running out, along with forecasts of crop failure, pushing up pepper prices recently. Along with that, the weakening USD helps pepper prices increase.

Inventory and crop

As per our investigation in the pepper supply in Vietnam, one of the world's largest producers, it is dwindling due to low crop yields and reduced farming interest.
The current stock is estimated at only 6,000 to 10,000 tonnes, and the next harvest is expected to be around 140,000 - 150,000 metric tonnes, a significant drop from previous years.
Many farmers have shifted to other crops that offer more frequent and higher income, such as durians.
Other remaining plantation areas consist of many old trees which do not provide good yield. Another factor constituting to the lack of interest in pepper farming is the cost of fertilizers and labour.

Not only Vietnam but also the output of many pepper growing countries such as India and Brazil is forecast to be unfavorable due to the impact of the bad weather El Nino.
Meanwhile, in the first quarter of 2024, purchases from Western countries may accumulate at the same time due to depleted inventories. This will help push domestic pepper prices to continue to increase.


Export

According to preliminary statistics of VPA, in No­ vember 2023, Vietnam exported 20,273 tons, an in­ crease of 5.6% compared to October. In which, black pepper reached 17,641 tons, white pepper reached 2,545 tons. Total export turnover reached 78.1 mil- lion USD, black pepper reached 64.9 million USD, white pepper reached 12.8 million USD

Progressively from January 1, 2023 to November 30, 2023, Vietnam has exported 243,851 tons of pepper of all kinds, of which black pepper reached 218,299 tons, white pepper reached 25,552 tons. Total export turnover reached 828.9 million USD, black pepper reached 705.4 million USD, white pepper reached 123.5 million USD. Compared to the same period last year, export volume increased by 14.6%, but export turnover decreased by 11.7%. The average export price of black pepper in 11 months reached 3,571 USD/ton, white pepper reached 5,081 USD/ton.

The main export markets of Vietnam Pepper include China: 59,073 tons, accounting for 24.2%; United States: 48,059 tons, accounting for 19.7%; India: 11,801 tons, accounting for 4.8%; UAE: 10,861 tons, accounting for 4.5% and Germany: 8,448 tons, accounting for 3.5%. Main white pepper export markets are United States: 3,433 tons, Germany: 3,117 tons, China: 2,796 tons, Netherlands: 2,379 tons and Thailand: 2,153 tons.