REPORT ABOUT PRESENT BLACK PEPPER MARKET & TRENDS

IN THE LAST DAYS RE GOT TO KNOW SOME REPORTS ABOUT BLACK PEPPER MARKET.

INTERESTING READING FOR THE ONES OPERATING IN THIS TRADE.

Vietnam – Although fresh demand from the world market is missing, prices are holding steady to firm.
A record quantity has been exported: March (37,000 tons), April (36,000 tons) and May
(37,000 tons) bringing a total volume to approximately 143,000 tons till May 2019;
36% more exports than 2018 in similar period.

We have not observed such stunning export figures in our 26 years of trading history. Knowing 8 more months to new crop,
farmers and dealers are now in a comfortable position to hold remaining quantities without panic. This is very much evident from arrival of goods and gradual rise in raw pepper prices.  

Their comfort level will increase more once 60-70% of crop is out of Vietnam.
In May, raw prices remained between 44000 to 46000 dong/kg.
China keep supporting the pepper market and their pepper imports have risen to 70% from 2018 followed by USA and India to 27% and 10% respectively.

Buyers keep pushing for lower prices. We have not seen very aggressive offers for future shipments as all of them feel more risk than reward.
Destination markets need to consume extra volume imported during last 3 months.
Not to forget that combined Middle East and Asia has become one of the largest pepper
consumer market in recent years and their constant support to origin keep prices steady.

Limited numbers of orders in hand with exporters do indicate that coverage for second half is yet to come.
Low pepper prices and higher maintenance cost are pushing few farmers to cut trees and plant some other commodities.
Farmers in Chu Puh and Chu Sê districts—two key pepper growing areas who had invested for a dozen of pillars that covered one hectare are now selling the same number of pillars in lower cost as many of them have gone bankrupt.
Add to pot, young trees are also dying due to poor care of farmers, poor maintenance of current
vines and virtually no new plantation, crop size will reduce gradually while world consumption in general increases by 3-4% annually.
Expect volatile days in 2020 and beyond.
Imports to India via Nepal may halt due to 100% additional duty (from 10-20%) has been imposed recently in their annual budget presented in end May.

Indonesia – No bad news so far. Expecting similar or slightly better crop than 2018. However, no selling pressure or any aggressive pricing from numbered top-class shippers.

Brazil – It is interesting to note that for the first time, Brazil is not discounting to Vietnam prices. In fact, quotes from Brazil are now in line with Vietnam. This firmness is attributed to strong currency and depleted inventories.
Brazil too have exported large volume in the last 5 months (approx. 40,000 tons).
Their new crop from Para region to start in August – September.
We have not seen any selling pressure yet. First class shippers prefer to stay away from sharp bids.
If Vietnam continues to be firm, world demand may shift to Brazil which may help Brazil to stabilize further.
In general, there is resistance at low prices.
Demand from Europe has slowed down due to the new import regulation on salmonella and at the same time volume from Vietnam has increased considerably for European ports.

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Indian Black Pepper futures likely to crash as farmers decide to Start selling Spot Cargo

OPINION by Sham Nair


Kochi/Mumbai/New Delhi 09 March 2012

Indian Black Pepper futures which increased 40% in less than three weeks with heavy speculative activities by non pepper traders who hand in glove with the exchange and the commodity regulator manipulated the pricing of Black pepper seems to have exit the market transferring the load to retail investors mainly is likely to crash in the coming days .Of course there is a shortage of production of Black pepper in the country but the sharp rise in just 18 days is a case of sheer manipulation according to industry stalwarts. Vietnam the worlds largest producer and exporter is offering Rs 100/- kg below the Indian Pepper prices and still not finding buyers or rather attracting buyers in the European Union and North America who claims to have sufficient stock to cater their needs till June and not in a rush to buy even after seeing the wide difference in pricing . The importers feel that the prices in Vietnam still have to drop another 10% to make it attractive for them and the freak Indian situation is completely discounted by them.Indian futures its matter of time is going to fall like nine pins said a major importer who alone buys 20% of North American requirements .

With multi origin multinationals deciding to deliver the Valid stocks they received in the February deliveries back in March and the validity expired stocks received in February by some of them is reprocessed and deposited in the exchange platform another 3000 mt pepper will be offered for March deliveries this time as most of the traders would like to have a clean book as its the financial year ending for all in the country there are every chances the futures delivery in India nose diving in the coming days and might move back to Rs 360 per kg from the present 439 /kg for April deliveries according to pioneers and veterans in the trade.

With the very wide gap between Indian and Vietnam pepper the value added processors who left the import front a year ago are back with full vigour and before the end of the month about 1000 mt of black pepper is likely to reach in Mumbai/Chennai ports besides Cochin .

In the meanwhile with lack of export orders in hand many Vietnam companies are offering shipments for April and May at a discount is raising the eye brows of many as its heard the flows of new crop is in full swing prices are likely to drop in Vietnam in the coming days by 10,000 VND per kilogram ( usd 500 pmt )



Sham Nair