VIETNAM - PEPPER MARKET UPDATE 08 JUNE - WEEK 24

The market has fluctuated throughout the week. However, at the end of the week 23, the market is still in an upward trend of nearly 2% from 54,000 VND on 1^st June and remained stable at 55,000 VND today. The domestic collectors continued to offer in small quantities and was hesitant in a tension between many exporters and domestic collectors/middleman.

After the price has changed dramatically in the last 2 weeks, the current price trend has become stronger and set a new price on the market. Oversea customers bought orders and looking for new inquiries in the third and fourth quarters 2020. However, the exporters was very cautious and only offer spot/prompt shipment instead of forwards shipment as before. Vietnam currency is still stronger trend than USD making Vietnam pepper price also higher.

Other information for your reference;

- In 2006; pepper price remained stable from January to May at 860 USD/MT. However, within 3 months, pepper price increased by 115% to 1,850 USD/MT (convert at current exchange rate).

- In 2011; the price of pepper at the beginning of the season was 4,340 USD but by the end of December it reached 7,122 USD. Increased 64%.

- In 2013 & 2014; the pepper prices at the beginning of the season reached 6,281 USD but increased 48% to 9,315$ in December.

2020;  Pepper prices still were at a loss for many farmers in this crop, a lot of farm households cut their pepper trees and converted other agriculture product. Currently, prices with increasing tendency have also stimulated farmers to take more care in their pepper plantation. However, the drought situation and many farmers who have changed to another product/cut their plantation not only in Vietnam but also other countries such as Indonesia/Brazil/Cambodia…We have a forecast that total crop production in 2021 will be significantly affected.

We will have a tour to survey the situation of pepper crop 2020 again from June 9 to June 17, 2020 and we will try to collect information to update you with the details in July.

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INDIAN PEPPER PRICES MAY MOVE UP ON GLOBAL TREND

 June 05, 2020

 China’s increased buying has pushed up the global pepper prices, especially in Vietnam and Indonesia, while the rates in India have seen only a marginal improvement. Domestic growers, who have not benefited from the global price trend are hoping to see higher realisations on the anticipated pick-up in demand with the easing of the lockdown.

Prices have registered double-digit increases in Vietnam and Indonesia over the past one month, while in India it went up by 1.8 per cent. According to the International Pepper Community, Vietnam prices rose 18.54 per cent at $2621 per tonne on June 4 from $2211 in May 4. Likewise, Indonesian prices also posted 14.12 per cent increase from $2088 to $2383. However, Indian prices witnessed only a marginal rise at 1.8 per cent from $4,354 to $4,434. “So far, the Indian growers have not really benefited from the recent global price rise. However, we are hoping that prices would move up in the next few weeks with a likely pick-up in demand from North India after the easing of lockdown,” said MC Kariappa, Chairman of Kodagu Planters Association. Farm gate prices have moved up from around ₹290-300 levels two months ago to around ₹315-317 per kg.

High production cost

Kishore Shamji, Coordinator of Indian Pepper, Spice Traders, Growers Consortium-Kerala Chapter, said the Indian prices, which is hovering above $4,000, is already on the higher side due to high domestic demand equivalent to production. The higher prices have benefited farmers, but the high production cost is posing a problem. The cost of production can be reduced by improving productivity.

India is expecting 60,000 tonnes of production as against 55,000 tonnes last year. It is the intrinsic value of Indian pepper that brought selected buyers from the US, Canada, and Europe, who have special preference for Malabar Black Pepper or Tellicherry Garbled Extra Bold or Malabar Tellicherry Special Extra Bold, he added.

“It cannot be said that the prices of low quality pepper are rising in the international market. The prices that have dropped to $1,800 are now recovering as China becomes active and starts buying as much as the US does,” Shamji said.
However, the high piperine content of Sri Lankan pepper, which is above 10 per cent, has made the commodity from the island nation a preferred choice for the spices extraction industry after paying a premium price.

Price rise in Vietnam

Prakash Namboothiri, former president of All India Spices Exporters Forum, noted that the Vietnam pepper prices have witnessed a spike due to high buying from China and other markets because of a jump in business activities in the post-Covid situation. The Indian prices are already at 50-60 per cent higher levels than Vietnam. However, there has been a decent pick-up in Indian prices in the last couple of days.
According to him, the global pepper market last week saw some fluctuations as some speculators booked profits when the price has reached the expectation. However, the price has still increased 13.4 per cent within a week from May 25 to 31. Indian prices when compared to other origins are already 50-60 per cent higher to similar grades. India needs to work on reducing the cost of production to ensure the farmers to make more profits which should be the end benefit, he said.

Rosy outlook

An expert in the pepper sector said the absence of a domestic market has forced farmers in Vietnam and Indonesia to depend on international markets for sale at cheaper prices. The market for Indian pepper is mainly dependent on domestic demand, which is always constant. Since Indian prices are on the higher side, international buyers look for low-priced pepper. The pick-up in domestic demand is also likely to result in the inflow of pepper from countries such as Nepal and Sri Lanka.

However, the future of spices looks rosy as commodities such as pepper, ginger, and turmeric find application in immune therapy.




V Sajeev Kumar/Vishwanath Kulkarni Kochi/Bengaluru
https://www.thehindubusinessline.com/

RUSSIA - PEPPER MARKET & IMPORTS

IMPORT OF PEPPER BY RUSSIA
Russia, officially the Russian Federation, is a transcontinental country in Eastern Europe and North Asia. Russia is by a considerable margin the largest country in the world by area, covering more than one-eighth of the earth's inhabited land area. Furthermore, Russia actively imports pepper from various pepper producing countries for domestic consumption or for re-export.
In 2018, Russia was reported to have imported a total 8,047 Mt of pepper which 91% or 7,353 Mt of it comprised of whole pepper while 9% or 695 Mt of it was ground pepper. The average import of pepper by Russia in 2018 was reported to be 671 Mt per month with the highest quantity recorded in May with 1,048 Mt. The total expenditure of pepper import by Russia was reported to be as high as USD 26.2 Million, recording an average price of the total pepper imported by Russia at USD 3,050 per Mt for whole pepper and USD 5,547 Per Mt for ground pepper.
Year 2019 saw an increasing trend in term of quantity of pepper import by Russia. Russia was reported to have recorded a total of 10,306 Mt which 90% or 9,236 Mt of it comprised of whole pepper and 10% or 1,070 Mt of it was ground pepper. Thus, recording an increase of 28% when compared to the same period in 2018. The average pepper imported by Russia was reported at 859 Mt per month which peaked in December with 1,065 Mt. Although increasing in terms of quantity, Russia was reported to have spent 3% less on its pepper import, totaling at USD 25.4 Million, Thus, recording an average price of the total pepper imported by Russia at USD 2,356 per Mt for whole pepper and USD 3,471 per Mt for ground pepper or a decrease by 23% and 37% respectively as compared to 2018.
As of February 2020, Pepper import by Russia was reported with an increase of 38% as compared to the same period in 2019, totaling at 1,208 Mt which comprised of 86% or 1,038 Mt of whole pepper and 14% or 170 Mt of ground pepper. The total expenditure of pepper import by Russia as of February 2020 was reported with an increase by 12% when compared to the same period in the previous year, totaling at USD 2.9 Million. Thus, recording an average price of the total pepper imported by Russia at USD 2,353 per Mt for whole pepper and USD 2,943 per Mt for ground pepper.
The top five countries of origins of Russia's pepper as of February 2020 were reported to be Viet Nam with 672 Mt (an increase of 52% as compared to the same period in 2019), Indonesia with 225 Mt (an increase of 189 Mt), India with 135 Mt (an increase of 89 Mt), Sri Lanka with 88 Mt (a decrease of 24%) and Brazil with 57 Mt (a decrease of 66%). The decreased of Russia import from Brazil and Sri Lanka could be contributed to Russia preference of importing from other origins countries which offered more competitive price such as Viet Nam (an increase by 231 Mt as compared to the same period in 2019) and Indonesia (an increase by 189 Mt).

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