INDIA - Spice industry faces huge crisis after suspension of exports in wake of COVID-19

While Gulf countries had already suspended cardamom import, the export of cardamom, pepper and other spices has now been temporarily suspended due to coronavirus fears.

Even as the COVID-19 pandemic spreads across the globe and India has announced a nation-wide lockdown, the spice industry is facing a huge setback. Farmers and traders are facing an enormous crisis after the export of cardamom, pepper and other spices was temporarily suspended due to coronavirus fears.

Last week the Spices Board suspended the cardamom e-auctions scheduled at e-auction centres at Bodinayakanur in Tamil Nadu and Puttady in Kerala with immediate effect until March 31. This has only added to the farmers’ woes. Within a week, the price of cardamom dropped by more than Rs 1,000 per kg. Till the last week of January, the price of cardamom was nearly Rs 4,000 to 4,500 per kg in the retail market. But now it fallen to Rs 2,000 to Rs 2,300. Pepper prices also fell to Rs 290 from Rs 330 per kg. Vendors are also not willing to buy spices such as cardamom, pepper and coffee from farmers.

Johny Joseph Vattathara, who runs Spice More Trading Company in Kumily in Kerala’s Idukki which trades in black pepper, cinnamon, cardamom and coffee, said that the COVID-19 pandemic has severely affected the spices trading and market. “Cardamom is mainly exported to Gulf countries. When COVID-19 started spreading across the world, the Gulf countries temporarily suspended cardamom import from other countries. We lost many export orders from the Gulf, presently we have no idea when the issue will be resolved,” he said.

Cardamom is firstly bought by vendors from Tamil Nadu and they export the product to other countries including the Gulf. But after the coronavirus scare, foreign countries stopped buying cardamom and the price continues to dip,” Johny added.

“Now the auctions have been suspended in Kerala and Tamil Nadu, so the movement of spices from Idukki district has stopped entirely. In the last cardamom auction, the average price quoted was only Rs 2,336 per kg,” Johny said.

Idukki district in Kerala is India’s largest producer of cardamom. Most of the natives in Idukki are farmers and live solely on income from agricultural produce. So when the traders stopped purchasing spices from them, the farmers are now in dire straits.

Small-scale traders are also upset over the present situation in the spices industry. “We vendors normally purchase spices from the farmers. But now we don’t know how to sell the products purchased through auction. With the lockdown in place, the market will also be suspended till April 14. We have already purchased and stored huge amounts of cardamom and pepper from the farmers. Now we don’t know when we’ll be able to sell it to wholesalers,” said MJ Joseph Mattapparampil, a spices vendor in Idukki.

AA George, a cardamom vendor, said, “In the present situation we can’t buy cardamom or other spices from the farmers. We don’t know when we can sell to wholesale vendors or through auction. The vendors have also stocked large quantities of cardamom and they are facing a big problem in selling their product.”

“Because of the COVID-19 pandemic, there is trade uncertainty in all countries and this will affect the import of cardamom and other spices. In the present situation, the vendors are not willing to purchase,” George added.

PM Thomas, a farmer, said, “Agriculture is my only source of income. But three days ago I tried to sell 10 kg of pepper but no vendor was ready to buy the product. I don’t know how to manage the situation.”

This report by
https://www.thenewsminute.com

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VIETNAM - PEPPER MARKET UPDATE 25TH MARCH 2020 – WEEK 13

Vietnam As the outbreak of Corona Virus continued to widely spreading, global pepper & spices business has continued to slow down. Market this week showed with no origins reported an increase.

Vietnam's pepper market had mixed movements throughout the week with a negligible price decrease as almost exporters continued to have to participate to cover raw material for all shipment in March and April. We would not be surprised if Vietnam's exports would reach over 35,000 tons pepper this month.

As many countries have closed and difficulties in customs clearance due to Coronavirus, pepper is also an agricultural food product so basic consumption is still a priority. In addition, the current price is very low, below the production cost of most farmers so the pepper price has almost not decreased. However, as many countries, the Vietnam currency has been weaker 1.5% than the US dollar last week make the price is more competitive compared to other countries.

China The government is in better control of the disease so demand from China has been increasing steadily and warm up over the past 2 weeks. It is forecast that China will have to buy a large amount of pepper when the disease situation is under controlled in the coming time because China only imported more than 2,000 tons of pepper in the first 3 months from Vietnam (While the first 3 month of 2019 imported 13,263 tons - a shortage of over 11,000 tons compare the same period).

USA Customers looking to cover whole year shipment but exporters/processor hesitating due to price does not meet and risky when market correction and rebound again.

India/Nepal has lockdown from yesterday and open next 3 weeks so no demand now.

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BLACK PEPPER REPORT - HIGHLIGHT ON BRAZIL FEB 2020

Production and Productivity

Brazil, known as one of the major pepper producing countries which is famous for its Black Pepper, is known to have a more competitive price as opposed to other origins. In recent year, Brazil has also surpassed Indonesia as the second largest pepper producer in the world with estimated quantity of 80,000 Mt in 2019. Brazil's increase of production could be contributed to the output of the first harvest of new plantation planted in 2017.

During 2008-2020 the area under pepper cultivation in Brazil had fluctuated. Between 2008-2013, area under pepper cultivation in Brazil saw a decrease by 37% to a total of 18,472 Ha from 29,549 Ha in 2008. The area under pepper cultivation in Brazil saw an increasing trend during 2013-2018 with an increase of 65% to a total of 30,503 Ha. In the course of 11 years between 2008-2018 total area under pepper cultivation in Brazil recorded an increase by 3% (Table 7). Furthermore, in 2019 the area under pepper cultivation in Brazil was estimated to increase by 2% as compared to 2018 to a total of 31,040 Ha. Whilst, for the year 2020 the area of pepper cultivation was projected to decrease by 1% as compared to 2019. The decrease of area under pepper cultivation in Brazil could be contributed to farmers in the last two years have stopped expanding new plantation in Para Region and Espirito Santos Region which are the main producer of pepper in Brazil.

Brazil production of pepper during 2008-2020 was reported fluctuating with a rather positive trend. In the course 11 years since 2008 pepper production in Brazil was reported to have recorded an increase of 76% as it recorded a total of 72,000 Mt in 2018 which comprised of 68,500 Mt of black pepper and 3,500 Mt of white pepper. The highest production of Brazil pepper In the course of 11 years between 2008-2018 was reported in 2018 with 72,000 Mt whilst the lowest production occurred in 2012 with 32,000 Mt. However, in the year 2019 production of Brazil pepper was estimated to increase by 11% when compared with 2018 to a total of 80,000 Mt which comprised of 76,000 Mt of black pepper and 4,000 Mt of white pepper. Furthermore, in relation to the decrease of the area under pepper cultivation as well as the lack of care for pepper plantation by farmers, in 2020 Brazilian pepper production was projected to decrease by 3% when compared to 2019 to a total of 78,000 Mt.

Pepper productivity in Brazil In the course of 13 years between 2008-2020 was reported to be fluctuated with a rather positive trend. During 2008-2020, the lowest pepper productivity in Brazil was reported in 2008 with 1,388 Kg per Ha while the highest productivity was reported in 2019 which was estimated at 2,577 Kg per Mt. The lowest decrease of pepper productivity in Brazil was reported to occur in 2016 as it recorded a 19% loss when compared with the previous year. Whilst the highest increase of pepper productivity was reported in 2017 which recorded a 45% increase as opposed to the previous year. For the year 2019, Brazil pepper productivity was estimated with an increase of 9% to 2,577 Kg per Ha whilst in 2020 Brazil pepper productivity was projected with a slight decrease by 1% to 2,541 Kg per Ha .


Pepper Export from Brazil

Brazil, known as the second largest pepper producer in the world, had managed to take the second largest pepper exporter position from Indonesia in 2017. Since 2008 until 2019 there had been a significant increase of 131% or 48,091 Mt in the quantity of pepper export from Brazil which was mainly dominated with black pepper as it contributed to 94% of the total export figures (Table 8). The highest pepper export occurred in 2019 with 84,676 Mt whilst the lowest export occurred in 2012 with 29,129 Mt. In 2019, pepper export from Brazil was reported at 84,676 Mt, an increase by 17% as opposed to the previous year. Furthermore, as of February 2020, pepper export from Brazil was reported at 15,922 Mt which comprised of 15,285 Mt of black pepper and 637 Mt of white pepper, thus, recording a decrease of 8% as compared to the same period in 2019.

The number of pepper exports from Brazil had reportedly fluctuated in the last 14 months. The total export by Brazil in the past 14 months was reported at 100,597 Mt with total value as high as USD 210.4 Million. The average pepper export from Brazil was reported to be 7,186 Mt per month. The highest pepper export of Brazil occurred in October 2019 which reached 11,119 Mt whilst the lowest was reported in July 2019 with 3,046 Mt . The high level of exports during that period (October) correlated closely to Brazil harvest season.

Pepper from Brazil is exported to various countries in Asia, Europe, America and Africa (Table 10). During January 2019-February 2020, the top 10 country of destinations for Brazilian pepper were reported to be Viet Nam with 17,517 Mt (Contributed to 17% of the total pepper export during January 2019-February 2020), Germany with 13,127 Mt (13%), United States of America with 10,294 Mt (10%), Morocco with 7,817 Mt (8%), Egypt with 6,581 Mt (7%), India with 5,791 (6%), Mexico with 4,554 Mt (5%), Pakistan with 4,301 Mt (4%), United Arab Emirates with 3,779 Mt (4%) and France with 3,272 (3%).


Pepper Export Price

Brazil pepper export price had fluctuated significantly in the past three years which could be attributed to the world supply of pepper significantly exceeding the global demand. In 2018, the average pepper export price for Brazil was reported at USD 2,835 per Mt with the highest prices recorded in January with USD 3,509 per Mt whilst the lowest price was reported in November with USD 2,195 per Mt. In 2019, Brazilian average pepper export price was reported at USD 2,148 per Mt, recording a decreased of 24% as compared to 2018. In 2019, the highest average price was reported to have reached USD 2,316 per Mt (July 2019) whilst the lowest average price was reported in November with USD 2,002 per Mt. As of February 2020, the average pepper export price for Brazil was reported at USD 1,940 per Mt, recording a 12% decreased as compared to the same period in 2019


THIS REPORT PUBLISHED BY IPC
Basic information provided by Coreimex and CSG Trade

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